LAGUNA STATE POLYTECHNIC UNIVERSITY

SANTA CRUZ MAIN CAMPUS

OPERATIONS MANAGEMENT
AND TOTAL QUALITY
MANAGEMENT

Prepared by: Aldon M. Francia, MBA

 LAGUNA STATE POLYTECHNIC UNIVERSITY
SANTA CRUZ MAIN CAMPUS

Module 3:
Product and Service
Design
Prepared by: Aldon M. Francia, MBA
Introduction
A corporate organization's core
competencies are its products and services,
and the organization's supply chain is built
around these core competencies. Companies
with well-designed products or services are
more likely to achieve their objectives than
those with subpar ones. Consequently,
businesses have a strategic stake in how
products and services are designed.
Designing a product or a service should be
directly related to an organization's strategy.
It has a significant impact on price, quality,
time-to-market, customer satisfaction, and
Introduction
The introduction of new goods or
services, as well as modifications to existing
ones, may have an effect on the organization
as a whole as well as the entire supply chain.
While some processes may only require minor
adjustments, others may need to make
significant changes to what they do, how they
do it, and when they do it.
Learning Outcomes
At the end of this module, students should be
able to:
1. explain the strategic importance of
product and service design;
2. describe what product and service design
does;
3. identify some reasons for design or
redesign;
4. explain the importance of legal, ethical,
and sustainability considerations in
product and service design;
5. familiarize with the 3Rs;
6. discuss the phases in product design and
Lesson 1. Idea Generation
Customers, the supply chain, rivals,
staff, and research are just a few of the
places where new or improved goods and
services might get their ideas from. Surveys,
focus groups, customer complaints, and
unsolicited recommendations for
improvement are all possible sources of
customer feedback. Interviews, direct or
indirect suggestions, and complaints can all
be used to get feedback from suppliers,
distributors, and workers.
Competitor products and services are
among the most powerful drivers of new and
improved goods and services. An
Lesson 1. Idea Generation
Additionally, some businesses will buy a product
from a rival and then meticulously disassemble
and examine it in order to find improvements
they can make to their own product. It's referred
to as reverse engineering.
Reverse engineering can occasionally help
a business beat the competition by producing an
even better product. Another source of ideas is
suppliers, and with the growing importance of
supply chains and supplier alliances, suppliers
are emerging as a significant source of ideas.
Another place to look for inspiration for
new or enhanced goods or services is research.
The term "research and development" (R&D)
refers to coordinated initiatives aimed at
Lesson 1. Idea Generation
Research and development projects may entail
development, basic research, or both.
• Basic research aims to advance our
understanding of a topic without any immediate
hope of commercial implications,
• Applied research has the goal to produce
commercial applications.
• Development transformed the outcomes of
applied research into practical commercial
applications.
The government and big businesses typically
fund basic research because it does not have
immediate commercial benefits. On the other
hand, due to the potential for commercial
applications, applied research and development
Lesson 1. Idea Generation
Successful R&D can have enormous
advantages. Some research results in
patents, which may result in licensing
and royalty payments. Many
discoveries, however, are not
patentable, or businesses shun the
patent route because they don't want
to share the specifics of their ideas.
Nevertheless, the company that
introduces a new good or service first
will typically benefit from it before the
competition catches up.
Lesson 1. Idea Generation
It's interesting to see how some
businesses are now moving away from a
heavily product-focused strategy and toward
a more balanced one that examines both
product and process R&D. Additionally, it is
becoming more widely acknowledged that
technologies frequently go through life
cycles, just like many other items. R&D
activities may be affected in two ways by
this. Continuously paying attention to
competitive issues during the course of a
business' life cycle is necessary for sustained
economic success, as is preparing to use
Lesson 2. Legal and Ethical
Considerations
Designers need to be cautious to take a
wide range of legal and ethical factors into
account.
Most businesses are governed by a
number of different government entities. The
Food and Drug Administration, the
Occupational Health and Safety
Administration, the Environmental Protection
Agency, and several state and municipal
agencies are some of the more well-known
federal agencies. Similar to how car pollution
regulations and safety features like air bags,
safety glass, and energy-absorbing bumpers
Lesson 2. Legal and Ethical
Considerations
A lot of focus has been placed on toy design
to exclude hazardous ingredients, sharp
edges, and small bits that can choke
children. The government further regulates
building by mandating the use of lead-free
paint, safety glass in entranceways,
accessibility for people with disabilities in
public buildings, and requirements for
insulation, electrical wiring, and plumbing.
Design advancements can benefit greatly
from product liability laws.
A manufacturer is liable under the law
for any harms or losses brought on by
Lesson 2. Legal and Ethical
Considerations
Therefore, it is crucial to create products that
are essentially risk-free. When risks do exist,
it is vital to install safety guards or other
equipment to lower the chance of accidents
and to adequately notify people of the risks.
In order to create industry-wide standards
that assist prevent some of the risks,
consumer advocacy organizations, business
organizations, and various government
agencies frequently collaborate.
Lesson 2. Legal and Ethical
Considerations
Organizations typically require designers to
follow rules like the ones below:
• Create designs that are in line with the
organization's objectives. For instance, if
your business strives for great quality, don't
cut corners to save money, even when the
consumer won't notice.
• Provide customers with the value they
deserve.
• Put people's health and safety first.
Employees who will make the goods or
provide the services, employees who will
transport the goods, clients who will use the
Lesson 3. Human Factors
Consumer product design frequently involves
dealing with human factor difficulties. In many
situations, safety and liability are two crucial
factors that must be properly considered. For
instance, the government, insurance providers,
automakers, and consumers are all very interested
in how safe automobiles are in crashes.
The addition of additional features to their
goods or services is a further concern for
designers. Certain businesses may use the
addition of new features to gain a competitive
advantage. Despite the obvious advantages, this
can occasionally be overdone and cause
customers to become dissatisfied. Electronic
products like handheld devices, which keep adding
new functions and increasing their complexity
Lesson 4. Cultural Factors
Product designers for multinational
corporations must also consider any
cultural variations across various
nations or areas that may be relevant
to the product. This can lead to various
designs for various nations or locations.
Lesson 5. Global Product and Service
Design
Members of the design team who are based at one
facility or a few neighboring facilities have
traditionally handled product design. Globally
operating companies are now seeing the benefits
of global product design, which combines the
efforts of a group of designers from several nations
and even continents. These virtual teams have a
number of advantages over traditional teams,
including the ability to work around the clock and
access the greatest human resources from across
the globe without having to gather them all in one
location. This reduces the time to market. The
usage of global teams also enables the
consideration of local resources, possibilities, and
Lesson 5. Global Product and Service
Design
The capacity of team members to
stay in constant contact with one
another, discuss concepts and progress
right away, and send engineering
revisions and other important
information has been a key factor in
the feasibility of international product
design teams.
Lesson 6. Environmental Factors:
Sustainability
The pursuit of sustainability is focused on
product and service design. Cradle-to-grave
evaluation, end-of-life programs, cost and
material reduction, reusing components of
returned products, and recycling are important
components.

Cradle-to-Grave Assessment
The evaluation of a product or service's
environmental impact over the course of its
useful life, also referred to as life cycle analysis
or cradle-to-grave assessment, focuses on
issues like global warming (the amount of
carbon dioxide released into the atmosphere),
Lesson 6. Environmental Factors:
Sustainability
every stage of a product's life cycle, from the
extraction of raw materials from the earth to the
cultivation and harvesting of plant materials,
through the manufacturing of parts and
assembly operations, or other processes used to
create products, as well as the use or
consumption of the product, and finally to the
product's final disposal at the end of its useful
life. Additionally, it considers all aspects of
transportation, pollution, and waste generation.
Cradle-to-grave evaluation of services is crucial
even though they often use fewer resources
than products do since they use energy and go
through many of the same or similar processes.
Lesson 6. Environmental Factors:
Sustainability
into account. The ISO 14000 environmental
management standards include cradle-to-
grave evaluation techniques.
End-of-Life Programs
End-of-life (EOL) programs deal with products
whose useful lives have come to an end.
Products range from consumer goods to
office supplies. The goal of these projects is
to lessen the habit of disposing of things,
especially electronic equipment, in landfills
or third-world nations or incinerating them,
which produces toxic ash and dangerous air
and water pollution. Although the programs
Lesson 6. Environmental Factors:
Sustainability
chromium, and other heavy metals. An
excellent illustration of the possibilities of
EOL programs comes from IBM. It has
gathered nearly 2 billion pounds of product
and product waste over the past 15 years.

The Three Rs: Reduce, Reuse, and

Recycle
Reducing the use of materials through
value analysis, refurbishing and then
reselling returned goods that are deemed to
have additional useful life, which is known as
remanufacturing, and recovering parts of
unusable products for recycling are three
Lesson 6. Environmental Factors:
Sustainability
Reuse: Remanufacturing
The remanufacturing of items is a new
idea in manufacturing.
Remanufacturing is the process of
restoring used goods by swapping out
damaged or worn-out components
before reselling them. The original
maker or another business can
complete this. Automobiles, printers,
copiers, cameras, computers, and
cellphones are a few examples of
Lesson 6. Environmental Factors:
Sustainability

Recycle
Recycling is a factor that designers
should consider. Recycling is the
process of reclaiming resources for new
uses. This holds true not just for
manufactured items but also for
supplies utilized in manufacturing, like
lubricants and solvents. It is possible to
melt down recycled metal or plastic
components and create new items.
Lesson 6. Environmental Factors:
Sustainability
Several factors motivate businesses to
recycle as follows:
1. Cost savings
2. Environmental concerns
3. Environmental regulations
The term "design for recycling" refers to
product design that considers the ability to
disassemble a used product to recover
recyclable parts and is a result of the urge to
recycle.
Lesson 7. Phases in Product Design and
Development
Feasibility Analysis
Market (demand) analysis, economic
(development and production costs, prospective
profits), and technological analysis are all included
in feasibility studies (capacity requirements and
availability, and the skills needed). The question of
whether it is in line with the mission must also be
addressed. This calls for coordination between the
departments of marketing, finance, accounting,
engineering, and operations.

Product Specifications
This calls for coordination between legal,
marketing, and operations, as well as precise
Lesson 7. Phases in Product Design and
Development

Process Specifications
Following the establishment of product
specifications, focus shifts to those for the
processes required to generate the products. Cost,
resource accessibility, potential for profit, and
quality of alternatives must all be taken into
consideration. Operations and accounting must
work together on this.

Prototype Development
Once the product and process specifications
are finished, one (or a few) units are built to check
Lesson 7. Phases in Product Design and
Development
Design Review
Any necessary adjustments are made at this
point, or the project is abandoned. Together,
the departments of marketing, finance,
engineering, design, and operations decide
whether to move forward or give up.

Market Test
To gauge consumer acceptance, a market
test is conducted. In the event of failure, the
product goes back to the design review
stage. Marketers are in charge of this period.
Lesson 7. Phases in Product Design and
Development
Product Introduction
Promotion of the new product is
done. Marketers are in charge of this
period.

Follow-up Evaluation
Changes or improved forecasts
may be made in response to user
comments. Marketers are in charge of
this period.
Lesson 8. Service Design

The design of products and

services share a lot of similarities. Due
to the nature of services, there are
some significant variances as well.
Services typically develop and supply
their goods simultaneously, in contrast
to manufacturing, where production
and distribution are typically spaced
out in time.
Lesson 8. Service Design

Overview of Service Design

The selection of a service strategy,
which establishes the target market and the
nature and focus of the service, is the first
step in the service design process. In order to
do this, top management must evaluate the
prospective market, profitability (or need, in
the case of a charitable organization), and
suitability of the company to deliver the
service. The customer requirements and
expectations of the target market must be
established after decisions regarding the
service's focus and the target market have
Lesson 8. Service Design
The degree of flexibility in service
requirements and the level of customer
interaction in the delivery system are two
important factors in service design. These
affect how much service can be standardized
or needs to be individualized. The more
uniform the service, the smaller the degree
of client contact and service requirement
diversity. Service design is extremely similar
to product design when there is little touch
and little to no processing variability. On the
other hand, significant variability and high
client contact typically require a highly
personalized service. The possibility of selling
Reference
Operations Management and Total Quality Management (2019).
McGraw-Hill Education. Philippines