PRODUCT AND SERVICE DESIGN – may cause the success or failure of a
Competitor quality
company. Design does not mean the physical aspect only. Design
also considers the intangible features.
The essence of an organization is the goods and services it offers. Every
aspect of the organization is structured around them. Product and
service design - or redesign - should be closely tied to an organization’s
strategy.
WHAT PRODUCT AND SERVICE DESIGN DOES
1. Translates customer wants and needs into product and service
requirements
2. Refines existing products and services – the product already
exists but you redesign it
REASONS TO DESIGN OR REDESIGN
3. Develops new products and services – new product is made,
you start from scratch. *Developing and refining products results
market opportunities or threats:
from #1.
4. Formulates quality goals – good quality is good design
5. Formulates cost targets
6. Constructs and test prototypes – A prototype is a replica of the
product you intend to manufacture.
7. Documents specifications – record details as necessary
8. Translates product and service specifications into process
specifications – how it is made/ procedures
9. Involves inter-functional collaboration – it may be a source of
info for the different departments of the company.
KEY QUESTIONS:
1. Is there a demand for it?
a. Market size
b. Demand profile
2. Can we do it?
a. Manufacturability – the capability of an organization to
produce an item at an acceptable profit. Manufacturability
is the ease of fabrication and/or assembly which is important
for cost, productivity, and quality.
b. Serviceability – the capability of an organization to provide
a service at an acceptable cost or profit.
3. What level of quality is appropriate?
a. Customer expectations
b.
c. Fit with current offering
*These aspects must all be met.
*Perceptions of customers as to quality is different from the
businessman/manager/marketer.
4. Does it make sense from an economic standpoint?
a. Liability issues – obligations of repairing a product
b. Ethical considerations – testing of efficacy, approved by
certain agencies
c. Sustainability issues
d. Costs and profits
The driving forces for product and service design or redesign are
a. Economic
b. Social and demographic – i.e. CRs for PWDs
c. Political, liability, or legal – i.e. photos of ill effects of cigarette
smoking are shown in cigarette packs
d. Competitive – i.e. buy product of a competitor and dismantle
to see strengths and weaknesses
e. Cost or Availability
f. Technological
IDEA GENERATION
1. Supply-chain based – ideas can come from anywhere in the
supply chain: customers, suppliers, distributors, employees, and
even maintenance and repair personnel
2. Competitor – based – by studying how a competitor operates
and its products and services, many useful ideas can be
generated
*Reverse engineering – is the dismantling and inspecting of a
competitor’s product to discover product improvements.
3. Research – based
Research and Development (R&D) – organized efforts to
increase scientific knowledge or product innovation
 a. Basic Research – has the objective of advancing the state
of knowledge about a subject without any near-term
expectation of commercial applications
b. Applied Research – has the objective of achieving
commercial applications
c. Development – converts the results of applied research into
useful commercial applications
LEGAL CONSIDERATIONS
1. Product liability – the responsibility a manufacturer has for any
injuries or damages caused by a faulty product. Some of the
concomitant costs are:
a. Litigation
b. Legal and insurance costs
c. Settlement costs
d. Costly product recalls
e. Reputation effects
2. Uniform Commercial Code (UCC) – products carry an
implication of merchantability and fitness
HUMAN FACTORS
Safety and liability – are two critical issues in many instances, and they
must be carefully considered. For instance, the crashworthiness of
vehicles is of much interest to consumers, insurance companies,
automobile producers, and the government.
Adding new features to products or services – is another issue for
designers. Although beneficial, it can sometimes be “too much of a
good thing” and can be a source of customer dissatisfaction.
CULTURAL FACTORS
Product designers in companies that operate globally also must
take into account any cultural differences of different countries or
regions related to the product. This can result in different designs for
different countries or regions.
ETHICAL CONSIDERATIONS
Designers are often under pressure to (a) speed up the design process
and (b) cut costs. These pressures force trade-off decisions. Moreover,
if a product has bugs, the management may either choose to (a)
release the product and risk the damage to the company’s reputation
or (b) work out the bugs and forego revenue.
SUSTAINABILITY – is a production system that supports conservation and
renewal of resources. Sustainability uses resources in ways that do not
harm ecological systems that support human existence
Key Aspects of designing for sustainability
1. Cradle-to-grave assessment (Life-Cycle Assessment or LCA)
 is the assessment of the environmental impact of a
product or service throughout its useful life. It focuses on
such factors as global warming, smog formation, oxygen
depletion, and solid waste generation. Life-Cycle
Assessment procedures are part of the ISO 14000
environmental management procedures.
2. The 3Rs
a. REDUCE: Costs and Materials
 Value analysis – examination of the function of parts
and materials in an effort to reduce the cost and/or
improve the performance of a product. Value analysis is
a review of successful products that takes place during
the production process. Value analysis takes place
during the production process when it is clear that a new
product is a success. The common questions used in
value analysis include:
a. Is the item necessary? Does it have value? Could it
be eliminated?
b. Are there alternative sources for the item?
c. Can two or more parts be combined?
d. Can specifications be less stringent to save time or
money?
e. Do suppliers/providers have suggestions for
improvements?
f. Can packaging be improved or made less costly?
b. RE-USE : Remanufacturing
*Remanufacturing – refurbishing used products by replacing
worn-out or defective components. Remanufacturing can
be performed by the original manufacturer or another
company.
Reasons to manufacture:
a. Remanufactured products can be sold for about
50% of the cost of a new product.
b. The process require mostly unskilled and semi-skilled
workers.
 c. In the global market, European lawmakers are
increasingly requiring manufacturers to take back
used products.
*Design for Disassembly (DFD) – designing a product so
that used products can be easily taken apart.
*Reusing is done by simply replacing defective
components. This is done for products to not be thrown
immediately.
c. RECYCLE – recovering materials for future use. It applies to
manufactured parts as well as to materials used during
production. Recycling is done for (a) cost savings, (b)
environmental concerns, and (c) environmental regulations.
Companies doing business in the European Union (EU)
must show that a specified proportion of their products
are recyclable.
*Design for Recycling (DFR) – product design that takes
into account the ability to disassemble a used product
to recover the recyclable parts.
PRODUCT OR SERVICE LIFE STAGES
*Every product / service goes through the different life stages but the
time (speed) differs or varies.
1. Introduction – because products are still being “fine-tuned” for
the market in the introductory phase, as are their production
techniques, they may warrant unusual expenditures for (a)
research, (b) product development, (c) process modification
and enhancement, and (d) supplier development.
2. Growth – product design has begun to stabilize, and effective
forecasting of capacity requirements is necessary. Adding
capacity or enhancing existing capacity to accommodate the
increase in product demand may be necessary.
3. Maturity – competitors are established. So, high volume,
innovative production may be appropriate. Improved cost
control, reduction in options, and a paring down of the product
line may be effective or necessary for profitability and market
share.
4. Decline – management may need to be ruthless with those
products whose life cycles is at an end. Ding products are
typically poor products in which to invest resources and
managerial talent. Unless dying products make some unique
contribution to the firm’s reputation or its product line or can be
sold with an unusually high contribution, their production should
be terminated.
*Contribution – difference between the direct cost and selling
price. Direct costs are labor and material that go into the
product.
*The goal is product extension so that it will not reach decline stage.
PRODUCT LIFE CYCLE MANAGEMENT
 Is a systematic approach to managing the series of changes a
product goes through, from conception, design, and
development, through production and any redesign, to its end
of life. There are 3 phases of Product life cycle management
(PLM) application:
1. Beginning of life – involves design and development.
Product life management does not begin when the product
is introduced but rather it begins by the time we
conceptualize (design and develop) about such product.
2. Middle of life – involves working with suppliers, managing
product information and warranties
3. End of life – involves strategies for product discontinuance,
disposal, or recycling
STANDARDIZATION – is the extent to which there is an absence of variety
in a product, service, or process. Thus, products are made in large
quantities of identical items through standardization. Every customer or
item processed receives essentially the same service. Standardized
products are immediately available to customers.
Standardization is advantageous in such a way that:
1. Fewer parts to deal with in inventory and manufacturing
2. Design costs are generally lower
3. Reduced training costs and time
4. More routine purchasing, handling, and inspection
procedures
5. Orders fillable from inventory
6. Opportunities for long production runs and automation
7. Need for fewer parts justifies increased expenditures on
perfecting designs and improving quality control procedures
However, standardization has the following disadvantages:
1. Designs may be frozen with too many imperfections remaining
2. High cost of design changes increases resistance to
improvements
3. Decreased variety results in less consumer appeal
*Standardization has no variety. It is difficult to apply to services
though it is possible to standardize it. It just differs on the way the
customer perceives the service.
MASS CUSTOMIZATION – is a strategy of producing basically
standardized goods or services, but incorporation some degree of
customization in the final product or service. Facilitating techniques in
mass customization are:
1. Delayed Differentiation – is the process of producing, but not
quite completing, a product or service until customer
preferences are known. Delayed differentiation is a
postponement tactic. Example, if you produce a furniture, you
are not the one who will choose the color it would be, but
instead you let the customer decide the color of the furniture.
Note that in here, the product has already been produced but
is not yet complete since there is no color yet.
2. Modular Design – is a form of standardization in which
component parts are grouped into modules that are easily
replaced or interchanged.
Modular Design helps in:
a. Easier diagnosis and remedy of failures
b. Easier repair and replacement
c. Simplification of manufacturing and assembly
d. Training costs are relatively low
Modular Design however leads to:
a. Limited number of possible product configurations
b. Limited ability to repair a faulty module; the entire module
must often be scrapped
RELIABILITY – is the ability of a product, part, or system to perform its
intended function under a prescribed set of conditions. Reliabilities are
always specified with respect to certain conditions.
*Normal operating conditions – are the sets of conditions under which
an item’s reliability is specified.
*Failure – is a situation in which a product, part or system does not
perform as intended.
ROBUST DESIGN – is a design that results in products or services that can
function over a broad range of conditions. Robust design is a design
that can be produced to requirements even with unfavorable
conditions in the production process. The more robust a product or
service, the less likely it will fail due to a change in the environment in
which it is used or in which it is performed. Note that robust design
pertains to product as well as process design.
DEGREE OF NEWNESS – is affected by the degree of change.
Product or service design changes:
1. Modification of an existing product or service
2. Expansion of an existing product line or service offering
3. Clone of a competitor’s product or service
4. New product or service –something that has never existed before
*The degree of change affects the newness of the product or
service to the market and to the organization.
QUALITY FUNCTION DEPLOYMENT (QFD)
 Is an approach that integrates the “voice of the customer” into
both product and service development.
 A process for determining customer requirements (customer
wants) and translating them into attributes (the “hows”) that
each functional area can understand and act on.
 The purpose of QFD is to ensure that customer requirements are
factored into every aspect of the process.
 The central feature of QFD is listening to and understanding the
customer
 Includes the House Of Quality
THE HOUSE OF QUALITY – is a part of the quality function deployment
process that utilizes a planning matrix to relate customer “wants” to
“how” the firm is going to meet those “wants”. The House of Quality
follows such order:
 1. Customer requirements that aid in the design, analysis, and commercialization of new
2. Design Characteristics products.
3. Specific components
4. Production processes PRODUCTION REQUIREMENTS
5. Quality plan
Designers must take into account production capabilities such as
equipment, skills, types of materials, schedules, technologies, and
KANO MODEL – there are different levels of quality, thus there are special abilities.
different levels of satisfaction. Time becomes a very important element MANUFACTURABILITY – is the ease of fabrication and/or assembly which
in the Kano Model. What satisfies you now may no longer bring you has important implications for (a) cost, (b) productivity, and (c) quality.
satisfaction after some time.
1. Basic Quality – refers to customer requirements that have only
COMPONENT COMMONALITY – When products have a high degree of
limited effect on customer satisfaction if present, but lead to
similarity in features and components, a part can be used in multiple
dissatisfaction if absent.
products. Component commonality has the following benefits:
2. Performance Quality – refers to customer requirements that
1. Savings in design time
generate satisfaction or dissatisfaction in proportion to their level of
2. Standard training for assembly and installation
functionality and appeal
3. Opportunities to buy in bulk from suppliers
3. Excitement Quality – refers to a feature or attribute that was 4. Commonality of parts to repair
unexpected by the customer and causes excitement 5. Fewer inventory items must be handled
*KANO Model and QFD find their roots to Japanese management.
SERVICE DESIGN – begins with a choice of service strategy, which
CONCURRENT ENGINEERING – is bringing engineering design and determines the nature and focus of the service, and the target market.
manufacturing personnel together early in the design phase. It is something that is done to or for a customer. Key issues in service
Concurrent engineering may also involve manufacturing, marketing, design are
and purchasing personnel in loosely integrated cross-functional teams. 1. Degree of variation in service requirements
Views of suppliers and customers may also be sought in concurrent 2. Degree of customer contact and involvement
engineering. The purpose of concurrent engineering is to achieve
Service delivery system – includes the facilities, processes, and skills
product designs that reflect customer wants as well as manufacturing
needed to provide a service.
capabilities.
Product bundle – is the combination of goods and services provided to
a customer
COMPUTER-AIDED DESIGN (CAD) – is a product design using computer
Service package – is the physical resources needed to perform the
graphics. CAD is an interactive use of a computer to develop and
service
document a product. CAD has the following advantages:
DIFFERENCES between SERVICE and PRODUCT DESIGN
1. Increases productivity of designers, 3 to 10 times
1. Products are generally tangible, services are intangible
2. Creates a database for manufacturing information and
2. Services are created and delivered simultaneously
product specifications
3. Services cannot be inventoried
3. Provides possibility of engineering and cost analysis on
4. Services are highly visible to consumers
proposed designs
5. Some services low barriers to entry and exit
*CAD that includes Finite Element Analysis (FEA) can significantly
reduce time to market. It enables developers to perform simulations
 6. Location is often important to service design, with
convenience as a major factor
7. Service systems range from those with little or no customer
contact to those that have a very high degree of customer
contact
8. Demand variability alternately creates waiting lines or idle
service resources.
A WELL-DESIGNED SERVICE SYSTEM has the following characteristics:
1. Being consistent with the organization mission
2. Being user-friendly
3. Being robust if variability is a factor
4. Being easy to sustain
5. Being cost-effective
6. Having value that is obvious to the customer
7. Having effective linkages between back- and front-of-the-
house operations
8. Having a single, unifying theme
9. Having design features and checks that will ensure service
that is reliable and of high quality
A SUCCESSFUL SERVICE DESIGN must
1. Define the service package in detail
2. Focuses on the operation from the customer’s perspective
3. Consider the image that the service package will present
both to customers and to prospective customers
4. Recognize that designers’ familiarity with the system may give
them a quite different perspective than that of the customer,
and take steps to overcome this
5. Make sure that managers are involved and will support the
design once it is implemented
6. Define quality for both tangibles and intangibles
7. Make sure that recruitment, training, and reward policies are
consistent with service expectations
8. Establish procedures to handle both predictable and
unpredictable events
9. Establish system to monitor, maintain, and improve service
OPERATIONS STRATEGY
Effective product and service design can help the organization
achieve competitive advantage through:
1. Packaging products and ancillary services to increase sales
2. Using multiple-use platforms
3. Implementing tactics that will achieve the benefits of high
volume while satisfying customer needs for variety
4. Continually monitoring products and services for small
improvement opportunities
5. Reducing the time it takes to get a new or redesigned product
or service to the market
7 QUALITY DIMENSIONS OF PRODUCTS/GOODS
(according to David A. Garvin)
1. PERFORMANCE – is a product’s primary operating
characteristics. Using an automobile as an example,
characteristics would include such things as acceleration,
braking distance, steering, and handling.
2. FEATURES – the “bells and whistles” of a product. A car may
have power options, a CD player, iPod connections, satellite
radio, and antilock brakes.
3. RELIABILITY – the probability of a product’s surviving over a
specified period of time under stated conditions of use. A car’s
ability to start on cold days and frequency of failures are
reliability factors.
4. CONFORMANCE – is the degree to which physical and
performance characteristics of a product match pre-
established standards. A car’s fit and finish and freedom from
noises and squeaks can reflect conformance.
5. DURABILITY – is the amount of use one gets from a product
before it physically deteriorates or until replacement is
preferable. The product lasts longer than usual. For a car, it
may include corrosion resistance and the long wear of
upholstery fabric.
6. SERVICEABILITY – is the speed, courtesy, and competence of
repair work. An automobile owner might be concerned with
access to spare parts, the number of miles between major
maintenance services, and the expense of service.
 7. AESTHETICS – is how a product looks, feels, sounds, tastes, or
smells. A car’s color, instrument panel design, control
placement, and “feel of the road”, for example, may make it
aesthetically pleasing.

5 QUALITY DIMENSIONS OF A SERVICE

1. RELIABILITY – is the ability to provide what was promised,
dependably and accurately. Examples include customer
service representatives responding in the promised time,
following customer instructions, providing error-free invoices
and statements, and making repairs correctly the first time.
2. ASSURANCE – is the knowledge and courtesy of employees,
and their ability to convey trust and confidence. Examples
include the ability to answer questions, having the capabilities
to do the necessary work, monitoring credit card transactions
to avoid fraud, and being polite and pleasant during
customer transactions.
3. TANGIBLES – are the physical facilities and equipment, and the
appearance of personnel. Tangibles include attractive
facilities, appropriately dressed employees, and well-
designed forms that are easy to read and interpret.
4. EMPATHY – is the degree of caring and individual attention
provided to customers. Empathy may be seen in the
willingness to schedule deliveries at the customer’s
convenience, explaining technical jargon in a layperson’s
language, and recognizing customers and calling them by
name.
5. RESPONSIVENESS – is the willingness to help customers and
provide prompt service. Responsiveness may be seen through
acting quickly to resolve problems, promptly crediting
returned merchandise, and rapidly replacing defective
products.