OPERATIONS

MANAGEMENT-3
SIDDHARTH
PORWAL
2021A4PS1377G
Product and Service Design

Product and service design aims primarily to achieve customer satisfaction,

with secondary considerations including cost/profit, quality,
production/serviceability, ethics/safety, and sustainability.

Key questions from the organization's perspective include:

Assessing demand: What is the market size and expected demand profile?
Evaluating capabilities: Do we possess the necessary knowledge, skills,
equipment, capacity, and supply chain capability? Can outsourcing be
considered?
Determining appropriate quality levels: What are customer expectations and
competitor offerings? How does it align with current offerings?
Analyzing economic feasibility: What are the potential liabilities and ethical
considerations?
Some Case studies on Product and
Service Design in various industries
across the world
Strategies for Product or Service Life Stages

Products and services typically undergo various stages throughout their life cycle,
each requiring different strategies due to varying demand levels.
Introduction stage: Initially treated as a novelty, companies must balance resolving
issues and gaining a competitive edge. Timing of market entry, especially during
peak buying periods, is crucial.
Accurate initial demand forecasts are essential to ensure sufficient product supply
or service capacity.
Growth stage: Design enhancements and increasing demand lead to higher
reliability and lower costs. It's crucial to accurately project demand growth rates
and adjust capacity accordingly.
Maturity stage: Demand stabilizes, and few design changes are necessary. Costs
are low, and productivity is high. Exploring new uses can extend product/service life
and increase market size.
Decline stage: Decisions must be made regarding product/service discontinuation,
replacement, or finding new uses/users.
PHASES IN PRODUCT DESIGN AND DEVELOPMENT
Feasibility Analysis:
Market Analysis: Evaluates demand, economic potential, and fits with the mission, involving collaboration among
marketing, finance, accounting, engineering, and operations.
Economic Analysis: Considers development and production costs, profit potential, and mission alignment.
Technical Analysis: Assesses capacity requirements, resource availability, necessary skills, and mission
compatibility.
Product Specifications:
Detailed descriptions to meet or exceed customer wants, requiring collaboration between legal, marketing, and
operations.
Process Specifications:
Defines process requirements to produce the product, weighing alternatives in terms of cost, resource availability,
profit potential, and quality, involving collaboration between accounting and operations.
Prototype Development:
Constructs a few units to identify any issues with product or process specifications.
Design Review:
Any necessary changes are made, or the project is abandoned, with collaboration among marketing, finance,
engineering, design, and operations.
Market Test:
Determines consumer acceptance through a market test; unsuccessful tests may return the product to the design
review phase, handled by marketing.
Product Introduction:
Promotes the new product, primarily managed by the marketing department.
Follow-up Evaluation:
Based on user feedback, makes changes or refines forecasts, with responsibility lying with the marketing
department.
Differences between Service Design and Product Design

Services often emphasize intangible factors such as peace of mind and ambiance,
while products focus more on tangible aspects.
Many services are created and delivered simultaneously, leaving less room for error
correction before customers notice, thus emphasizing the importance of training,
process design, and customer relations.
Services cannot be inventoried, restricting flexibility and making capacity
management crucial.
Highly visible services require additional considerations in process design compared to
less visible products.
Services with low barriers to entry and exit require innovative and cost-effective design
to remain competitive.
Location plays a significant role in service design, with convenience being a key factor,
often closely linked with the choice of location.
Service systems vary in customer contact levels, ranging from insulated technical
cores with no customer contact to high levels of customer interaction, influencing
design considerations.
Demand variability affects customer waiting times and service resource utilization,
potentially leading to lost sales or idle resources.