Concept on Product and Service Design

Product Development Process

Difference between Product and Service Design

Emerging Issues in Product and Service Design

Value Analysis

Concurrent Engineering

Quality Function Deployment (QFD)

Waiting Line Theory (Single Channel Only)

The product designing and manufacturing environment is changing rapidly
just because of dynamic nature of demand from the targeted customers
today.

Last year’s successful product may or may not be successful in years to come
too. Therefore, as an operations manager, we should always be ready to
change our product time to time as per requirement.

A new product design does not always mean a new conceptual product
(or innovative product) based on new research, modification of existing
product and featuring additional (or modified product) also taken as new
product design.

Effective design is very much essential to stay in competitive market.

Poor designs may not meet customer needs or may be so difficult to
make that quality suffers. Costly designs can result in over-priced
products that lose market share. If the design process is too lengthy, a
competitor may capture the market by being the first to introduce new
products, services, or features.
Fig. Idea about Product Design

Modified Product
• (Addition or changes in some features)
What?
Innovative Product
• (Totally new product)
Product Design
 Form Design Pure Research (Idea or draft or
 Process Design concept of product)
 Features/Function • Experts from inside and outside
Design • Marketing personnel
• Consultants
• Research groups or institutions
How? • Students from various universities etc.

Applied Research (Implementation)

•Manpower
•Machinery and equipments
•Schedule
•Management
•Information etc.
Product design is concerned with the designing of three issues as form, process
and function of a production.
1. Form Design
It is concerned with the appearance, and aesthetic considerations and also the
size, volume and weight of the product which are secondary to the performance
of the product.

2. Process Design
There are different types of process designs are so popular for manufacturing
organization like project process technology, job-shop process technology,
batch process technology, assembly line process technology, continuous flow
process technology etc. Among the processes an operations manager should be
able to select right process on the basis of nature of products or organization.
It is concerned with the overall sequences of operations required to achieve the
design specifications of the product. It specifies the type of work stations that
are to be used, the machines and equipments necessary to carry out the
processes to produce the product.

3. Function/ Features Design

It is concerned with the first and foremost requirement of a good product i.e., the
product should effectively perform the function for which it is developed. For
example, for a television set, the picture quality and the sound quality is more
important than the appearance of the cabinet in which the picture tube is fixed.
 Need Feasibility Study/
Identification Product Advance Design
Planning

Product Evaluation Production Process Detailed Engineering

and Improvement Design and Design
Development

Product Use
and Support
1. Need Identification
The design process begins with understanding the customer and actively
identifying customer needs. Ideas for new products or improvements to
existing products can be generated from many sources, including a
company's own R & D department, customer complaints or suggestions,
marketing research, suppliers, and salespersons in the field, factory workers,
and new technological developments. Competitors are also a source of ideas
for new products or services. Pure research and applied research is also used
for identification of customer needs.
2. Feasibility Study /Product Planning
The feasibility study includes several types of analyses, beginning with a
market analysis. The market analysis assesses whether there's enough
demand for the proposed product to invest in developing it further. If the
demand potential exists, then there's an economic analysis that looks at
estimate of production and development costs and compares them to
estimated sales volume. Finally, there are technical and strategic analyses
that answer such questions as:
 Does the new product require new technology?
 Is the risk or capital investment excessive?
 Does the company have sufficient labour and management skills to
support the required
3. Advance Design
Rapid prototyping creates preliminary design models that are quickly tested and either
discarded or further refined. Designers take general performance specifications and
translate them into a physical product or service with technical design specifications.
The process involves building a prototype, testing the prototype, revising the design,
retesting, until a viable design is determined. It involves form, functional and
production design.
 a. Form Design: Form design refers to the physical appearance of a product - its
shape, colour, size, and style. Aesthetics such as image, market appeal, and
personal identification are also part of form design.
 b. Functional Design: Functional design is concerned with how the product
performs. It seeks to meet the performance specifications of fitness for use by the
customer.
 c. Production Design: Production design is concerned with how the product will be
made. During the design stage itself the manufacturing aspects should be
considered.
4. Detailed Engineering Design
In this stage, a series of engineering activities to develop a detailed definition of the
product, including its subsystems and components, materials, sizes, shapes, and so
on. Design engineers now design the components that will constitute the product so
that it has the required features and gives the desired benefits. Technical expertise of
the company comes to the fore during this stage of the product development
process.
In this stage, operations managers should provide design engineers with information
about the producibility of the components being designed. Operations managers
should be included in decisions about equipment design, since they know more about
equipment than do design engineers. If the product requires a new material that has
special properties, materials managers and suppliers should be consulted.
🞂
5. Production Process Design and Development
Working with the detailed product design, engineers and
manufacturing specialists prepare plans for materials acquisitions,
production, warehousing, transportation, and distribution. Activities
here, however, go beyond just hardware considerations: This stage
involves planning, too, for production and control systems, computer
information systems, and human resource systems (Everette E., et. al.
1992).
6. Product Evaluation and Improvement
Customers’ feedback is tracked, and failure data are analyzed. Formal
research is conducted to understand customers’ experience of the
product. The company keeps itself updated on product’s underlying
technologies and process technologies. Product is redesigned if
customer’s feedback is persistently negative or if new technological
breakthroughs enable design and production of a better product.
7. Product Use and Support
Customers are trained to use the product. It is important that
customers use all the feature of the product and get all the benefits
that the product is capable of providing. Customers will not rate the
product highly if they do no use all the benefits that the product is
capable of providing. For example, less tech-savvy customers use
their smarts phones just to make calls and send messages.
Service is an intangible and perishable benefit. Services are
created and used simultaneously. While a service cannot be
stored for later use, its effect may last over time.
Services are acts, deeds, performances or relationships that
produce time, place, form, or psychological utilities for
customers.
Service design begins with the choice of a service strategy, which
determines the nature and focus of the service, and the target
market.
This requires an assessment by top management of the potential
market and profitability (or need, in the case of a nonprofit
organization) of a particular service, and an assessment of the
organization’s ability to provide the service.
Two key issues in service design are the degree of variation in
service requirements and the degree of customer contact and
customer involvement in the delivery system. These have an
impact on the degree to which service can be standardized or
must be customized.
An effective and efficient manager must try to identify optimum size of
the service in a competitive situation for his/her organization; otherwise
organization may lose valuable customers. The concept of optimum
size of the service can be illustrated with the help of figure given below:

If High Possibility
Quality High Cost High in Losing
Service is of Service Charge Customers
[Price
Designed Effect]

Optimum Size BALANCED SIZE OF SERVICE

of the
Service
If Low Possibility in
Quality Low Cost Low Losing
Service is of Service Charge Customers
[Quality
Designed, Effect]
1. Target The Customers
[Gender, age, income, area etc.]

2. Develop The Service Concept

[Pure research and applied research with involvement of
customers]

3. Develop Service Strategy

[Cost/price, quality, quick response, timing,
differentiation etc.]

4. Develop Service Delivery System

[Capital-intensive vs Labour-intensive including home
delivery,
office delivery etc.]
 Service Design Product Design

Service design often focuses more on Product design often focuses more on
intangible factors (e.g., peace of mind, tangible factors (e.g., size, weight etc.)
feel etc.)
In many instances services are created Products are, normally, designed on
and delivered at the same time (e.g., a the basis of general survey that done in
haircut, a car wash). past.
Services cannot be inventoried. This Products can be inventoried. Uniformity
poses restriction on flexibility and is very essential to maintain on
makes capacity issues very important. product size, shape and quality in
designing process.
Services are highly visible to consumers Normally, product design is completed
and must be designed with that in with a single process as per the
mind; this adds an extra dimension to requirements or the nature of the
process design, product.
Location is often important to service Location is not so important, as
design, with customer convenience as important in service design, in the
a major factor. Hence, design of designing phases of product. Selection
services and choice of location are of location for the product is for m
 The emerging issues or challenges facing by operations manager in products and
service design are as follows:
1. Managing Multiple Customers
It is very essential for the organizations to build up the customer relations.
Organizations serve products and services to various kinds of customers
according to their, needs and expectations. It is difficult task for the operations
manager to develop good customer relationships and manage their various needs
and expectations.
2. Understanding the Product and Service Concept
The products and services which are offered to the customers by the
organizations may have different views and concepts. Understanding and
delivering the real service concept is critical for classifying the organization's
service product to all the customers and for ensuing that can be delivered
to customer’s specification.
3. Managing the Outcome and Experience
There is no clear boundary between experience and the outcome for many
products and services. For instance, customers in a restaurant are buying both the
meal and way they are served. The intangible nature of the experience provides
particular problems for both specifications and control. Some organizations try to
manage the intangible parts of the service by attempting to make them more
tangible.
4. Managing in Real-time
Many products and services cannot be delayed or put-off,
they happen in real time. For example, aircrafts coming to
land cannot be put on hold while controllers take a break. In
manufacturing operations, it is possible to scrap defective
products and remark them, but in service operations it is not
possible to undo defective service rendered to a customer. For
example, a wrong surgery done on a patient may take the life
of the patient. Managing resources, managing staffs and
employees and creating an appropriate culture are key tasks
in managing real time services.
5. Knowing, Implementing and Influencing Strategy
Operations of the business are responsible for implementing
the strategy of the service organizations. Product and service
operations managers must understand their role, not only in
implementing strategy but also in contributing to it or
influencing the strategy. The service operations managers are
responsible in providing the platform for their organizations
for competitive advantage through competence in service
operations.
6. Continually Improving Operations
The product and service operations manager should always be
attentive of how continually to improve and develop their real
improvements. They should manage the increased complexity
resulting from the change and also improve efficiency as well as
quality of product and service operations that are to be delivered to
their customers.
7. Encouraging Innovations
Innovation is viewed as what is new rather than improving the
existing product and service operations. Innovation usually requires
an element of financial risk because innovations require time and
money and personal risk for service managers who accept change by
putting their reputation on line. Product and service operation
managers should be always alert to seek out new ideas and also have
the will and support to assess them carefully and follow through if
appropriate.
8. Managing Short-term and Long-term Issues Simultaneously
Organizations are always under pressure to perform in the short-
term which leaves little time for medium-term operational
improvement or long term strategic planning. Many product and
service operations managers focus their time and effort on managing
day-to-day operations to ensure the delivery of an appropriate
quality of service at an appropriate cost (Joshi, Fago, Aryal, 2012).
Value analysis is carried out to eliminate unnecessary features and functions
of a product or a component.
In other words, value analysis is an organized method of cost reduction of a
product by attacking in its basic design.
The value analysis questions the product design itself, with a view to
evolving a cheaper design system that can perform the intended function.
In the search for cheaper design, quality is not sacrificed, rather, it often
leads to improvement in quality. Value analysis as a formulized technique, is
of recent origin.
It was first put forward by L.D. Miles in the early 1950s based on his work
with General Electric. During the short span of 20 years, its effectiveness has
been proved beyond doubt and a new discipline, namely Value Engineering
has come in to being.
A successful value analysis study results in reduced cost for the same quality
or improved quality with the same cost. Either way, it increases the quality
contribution (the difference between value and cost of quality) and thus
furthers the overall aim of quality management.
Concurrent engineering means bringing design and
manufacturing people together early in the design phase to
simultaneously develop the product and processes for
manufacturing the product.
Concurrent engineering helps to improve the quality of early
design decisions and thereby reduces the length and cost of
design process.
Recently this concept has been enlarged to include
manufacturing personnel, design personnel, marketing and
purchasing personnel in loosely integrated cross-function teams.
In addition, the views of suppliers and customers are also sought
frequently. This will result in product designs that will reflect
customer wants as well as manufacturing capabilities in the
design stage itself.
In other words, to achieve a smoother transition from product
design to production, and to decrease product development
time, many companies are using simultaneous development, or
concurrent engineering.
Quality Function Deployment (QFD) is a structured approach for integrating the
“voice of the customer” into both the product or service development process.
The purpose is to ensure that customer requirements are factored into every
aspect of the process. Listening to and understanding the customer is the central
feature of QFD.
Requirements often take the form of a general statement such as, “It should be
easy to adjust the cutting height of the lawn mower.” Once the requirements are
known, they must be translated into technical terms related to the product or
service.
For example, a statement about changing the height of the lawn mower may relate
to the mechanism used to accomplish that, its position, instructions for use,
tightness of the spring that controls the mechanism, or materials needed.
For manufacturing proposes, these must be related to the materials, dimensions,
and equipment used for processing. The structure of QFD is based on a set of
matrices. The main matrix related customer requirements (what) and their
corresponding technical requirements (how).

Quality Function Deployment approach uses inter-functional teams from

marketing, design and manufacturing to incorporate the features sought by the
customers in the product at the stage of product design.
It is a common experience with all of us that
for getting any sorts of goods and services
from any shop or service centers like petrol
pumps, cinema, halls, airports, clinic, banks,
government offices, we are obliged to wait
in a line for long time.
These sorts of waiting not only cause
irritations and dissatisfaction but also make it
very expensive and time consuming.
On the same side, it includes opportunity
cost and time cost
So, in order to reduce such problems of the long
waiting lines, the principle of waiting line
theory has played vital role to find the
appropriate solution for that.
This theory provides certain techniques to
minimize the overall cost of waiting and
servicing customer in the situation which have
economic effect.
The four stages of waiting line theory:
Customer Possible Getting Customer
Arrival Waiting Line Departure
Served
A waiting line is a line or list of customers, who remain
waiting for getting certain goods or services from service
centers.

Waiting lines are analyzed with a set of mathematical

formulas which comprise a field of study called queuing
theory.

Queuing theory uses queuing models to represent various

types of queuing systems that arise in practice.
The main objective of the waiting line theory is to
minimize
two important costs i.e. time cost and opportunity cost.

Providing too low service would cause excessive waiting

which has a cost in terms of loss of goodwill, customer
frustration and direct cost of idle employees.

On the other hand, too high a service level would result in

very high setup cost and idle time for the service
stations.
Types of Waiting Line
System
The waiting line system can be classified into following
categories.
1. Single Channel System
Under single channel system, there is one queue for one
service center. This arrangement is done where the size of
queue is expected to be small and the service center is
not able to afford for more than one counter.
1. Figure 3.16: Single Channel Waiting
Line System
Custom
ers

Departure

Population Waiting Line Service

Center

If the market is monopoly, keeping all things constant, we must use single channel
system.
2. Multi-channel System
Under multi-channel system, a service center opens a number
of service counter and different queue are made according to
service counter.
When the size of the entire population is expected to be too
large and the organization is able to provide for a large
number of counters, this arrangement is suitable. If the
market is elastic, we must use multi-channel system.

1. Figure 3.17: Multiple Channel

Waiting Line System

Customer
Departure
Waiting Work
Line Centers
There are following reasons for providing
service through multi-channel system:
 Sizeand the types of the customers
(Balking customers, jockeying customers
and reneging customers)
 Level of competition
 Market nature (ie. elastic market)
 Opportunity cost calculation.
Equations used in Queuing
Theory
The problems of queuing system are solved using various models. Some of the formulae for
solving the problems of queuing system are mentioned below:
1. The probability that service facility is idle (i.e. the probability of no customers in the system).

P0 = 1 -


2. The probability that there are ‘n’ units (or exactly n customers) in the
system.
Pn = P0    n 
= 1-

n
3.  factor or
Utilization traffic

intensity defines as probability that service facility is being
used.

ρ = = Average rate of Arrival/average rate of
4. service
Expected or mean number of customer (units) in the system or length of the
system

LS = 
-
5. Mean (expected or average) number of customers (units) in the queue waiting to
service (average length of a queue)


Lq =  = L
(2 - 
-s
6. ) or average) time a unit spends waiting in
Mean (expected
queue.
W =   1
q   -
7. Mean (expected) waiting time in system (time in queue plus service
time):  1
W
=
s -
8. The probability
 that at least one customer in the
system
(p≥1) = 1 - Po
9. The probability that at least two customers in the
system
(p≥2) = 1 – [Po + P1]
Example 1
A new shopping mall is considering setting up an information desk
managed by one employee. Based upon information obtained
from
similar information desks, it is believed that people will arrive at
the
desk at a rate of 20 per hour. It takes an average of 2 minutes to answer
a question. It is assumed that the arrivals follow a Poisson distribution
and answer times are exponentially distributed.
a. Find the probability that the employee is idle.
b. Find the proportion of the time that the employee is busy.
c. Find the average number of people receiving and waiting to receive
some information.
d.Find the average number of people waiting in line to get some
information.
e.Find the average time a person seeking information spends in the
system.
f.Find the expected time a person spends just waiting in line to have a
question answered (time in the queue).
Where, arrival rate (ℷ) = 20 customers per hour
service rate (µ) = 30 customers per hour

 2
a. P0 = 1 –  = 10 – 30 = 0.33
= 33% 

 20
c. LpS== = 0.66
b. = =2
people 
– 30 – 20

20
d. Lq = 2 = 1.33
2 –
( 30(30 –
= people
) 1 20)
1
e. Ws = = = 0.10 hours
– 30 – 20
 20
f. Wq = = = 0.0667
hours
( – ) 30(30 – 20)
Example 2
At a certain Saloon, customers arrive in a Poisson
distribution fashion with an average time of 20
minutes between arrivals. The interval between
services at the saloon follows exponential pattern
and the mean time for the purpose comes to 15
minutes. In the light of the above information,
determine:
i. the average length of the queue
ii.the average length of the system in the
saloon
iii. the time spent by a customer in the
queue
iv. the total spent by a customer in the
saloon
Solution
Arrival Rate () = 20
minutes = 3/hour Service
Rate () 9
2 = 15 minutes =
i. Lq =  2
( – =
= 4/hour 4(4 – 3) 4 custome
)32
 = 2.253 r
ii. Ls = – 4 – =

= 3 customers 3
 3
iii. Lq =( – =4(4 = 0.75 hours = 45
minutes) – 3)
1 1
iv. Ls = – 4 – =
 3
= 1 hour
Problems for the discussions
Problem 1
The manager of a grocery store in the retirement
community of Sunnyville is interested in providing good
service to the senior citizens who shop in her store.
Currently, the store has a separate checkout counter for
senior citizens. On average, 30 senior citizens per hour
arrive at the counter, according the Poisson distribution,
and are served at an average rate of 35 customers per
hour, with exponential service times. Find the following
operating characteristics:
a. Probability of zero customers in the system.
b. Average utilization of the checkout clerk.
c. Average number of customers in the system.
d. Average number of customers in line.
e. Average time spent in the system.
f. Average waiting time in line.
[Ans: a. = 0.1429, b. = 0.8571, c. = 6, d. = 5.1429, e. = 0.20, and f. = 0.1714]
Problem 2
Assume a drive-up window at a fast food restaurant. Customers arrive at
the rate of 25 per hour. The employee can serve one customer every two
minutes. Assume Poisson arrival and exponential service rates.
Determine:
i. What is the average utilization of the employee?
ii. What is the average number of customers in line?
iii. What is the average number of customers in the system?
iv. What is the average waiting time in line?
[Ans: i. = 49.8, ii. = 4.16  4 customers, iii. = 5 customers, and iv. = 0.16 hours]

Problem 3
What are the characteristics of queuing system? Students arrive at the
Administrative Services Office at an average of one every 15 minutes,
and their requests take on average 10 minutes to be processed. The
service counter is staffed by only one clerk, Mr. Ramesh Karki, who
works eight hour per day. Assume Poisson Exponential service times.

i. What percentage of time is Ramesh idle?

ii.What is the probability that an arriving student will find at least one
other student waiting in line?
[Ans: i. = 0.33 hours or 20 minutes, ii. 0.67 hours or 40 minutes]
Problem 4
At a certain Bank, customers arrive in a Poisson fashion with an average time of 5
minutes between arrivals. The interval between services at the Bank follows
exponential pattern and the mean time for the purpose comes to 4 minutes. In
the light of above information determine:
i. The expected number of customers in the systems
ii. The expected number of customers in the queue.
iii. The time spent on average by a customer in the system
iv. The proportion of time the system remains idle.
v. The probability at least one customer in the system.
[Ans: i. = 4 customers, ii. = 3.2 customers, iii. = 0.3 hours or 18 minutes,
iv. = 0.2 hours or 12 minutes, and v. = 0.8 hours or 48 minutes]

Problem 5
Customers come to client service desk at an average of one every 12 minutes and
their requests take an average of 8 minutes to be processed. Client service desk is
staffed by only one employee, who works eight hours in a day. Assume Poisson
arrival and Exponential service pattern, find out the following;
i. Average number waiting in line
ii. Utilization of client service desk
iii. Average time waiting in line
iv.Probability that there are at least 2 customers waiting in line when a customer
arrives
[Ans: i. = 1.3 customers, ii. = 0.67 hours or 40 minutes, iii. = 0.26 hours or 16
minutes
and iv. = 0.45 hours or 27 minutes]