Foreign Trade University

Learning Objectives
 Explain the strategic importance of product and service
design.
 List some key reasons for design or redesign.
 Identify the main objectives of product and service
design.
 Discuss the importance of standardization.
 Discuss the importance of legal, ethical, and
environmental issues in product and service design.
 Learning Objectives
 Briefly describe the phases in product design and
development.
 Describe some of the main sources of design ideas.
 Name several key issues in manufacturing design.
 Name several key issues in service design.
 Name the phases in service design.
 List the characteristics of well-designed service
systems.
 Name some of the challenges of service design.
 Product Decision
 The goods or service the organization provides society

 Top organizations typically focus on core products:

Core Competency

 Customers buy satisfaction, not just a physical goods or

particular service

 Fundamental to an organization's strategy with implications

throughout the operations function
 Product Decision
Core competency:

- Access to a wide variety of markets

- Increase perceived customer benefits
- Hard for competitors to imitate
Product Strategy Options
 Differentiation
 Apple

 Low cost
 Taco Bell

 Rapid response
 Toyota
Some important factors to consider
when designing products and
services
What are the key questions in product and
service design?
From the organization’s standpoint, the key questions are:
 Is there demand for it? What is the potential size of the
market, and what is the expected demand profile (will
demand be long term or short term, will it grow slowly or
quickly?
What are the key questions in product
and service design?
 Can we do it? Do we have the necessary knowledge,
skills, equipment, capacity, and supply chain capability?

 For products, this is known as manufacturability

 For services, this is know as serviceability.

 Also, is outsourcing some or all of the work an option?

 What are the key questions in product
and service design?
 What level of quality is appropriate? What do customers
expect? What level of quality do competitors provide for
similar items? How would it fit with our current offerings?

 Does it make sense from an economic standpoint? What are

potential liability issues, ethical considerations, sustainability,
costs, and profits?
 Product and Service Design

 Major factors in design strategy

 Cost
 Quality
 Time-to-market
 Customer satisfaction
 Competitive advantage

Product and service design/redesign

should be
closely tied to an organization’s strategy
 Reasons for Product or Service Design

 Driven by mkt opportunities and threats.

 Factors that affect market opportunities and threats:
 Economic: low demand, need to reduce costs

 Social and demographic: populations shifts

 Political, liability, or legal: regulation changes

 Competitive: new products by competitors

 Cost or availability: raw materials, labor

 Technological: in product components/processes

Objectives of Product and Service Design
 Main focus
 Customer satisfaction
 Understand what the customer wants (mktg)
 Secondary focus
 Function of product/service
 Cost/profit
 Quality
 Appearance
 Ease of production/assembly
 Ease of maintenance/service
Braun’s Product Design
Braun’s Product Design
Dieter Rams 10 Principles of “Good Design”
1. Innovative
2. Useful
3. Aesthetic
4. Understandable
5. Unobtrusive
6. Honest
7. Long-lasting
8. Thorough down to the last detail
9. Environmental friendly
10. As little design as possible
 Product and Service Design Process
Set of activities:
1. Translate customer needs and wants into product and
service requirements;
2. Refine existing products and services;
3. Develop new products and/or services;
4. Formulate quality goals;
5. Formulate cost target;
6. Construct and test prototypes;
7. Document specifications
Design Thinking
Power of Design Thinking
Make others successful

Embrace ambiguity

Talk less, do more

Learn from failure

Take ownership

Collaborate

Be optimistic

Source:IDEO
Empathy
Walk a Mile in Their Shoes

Personally experience the customer’s perspective

Seeing what people really do, not just what they say

Understanding why people say what they say

Empathy
Empathy Using The Five Why’s
Applying The 5 Why’s
The Gift Giving Experience
 Legal, Ethical, and Environmental Issues
 Legal
 FDA (Food & Drug Admin), OSHA (Occupational Safety &
Health Admin)
 Product liability: responsibility for injuries by faulty items
 Uniform Commercial Code: implied warranties by laws for
merchantability and fitness for intended purposes.
 Ethical
 Releasing products with defects and potential hazards
 Time constraint in design may require ethical decisions with
trade-offs
 Environmental
 EPA (Environ. Protection Agency)
 Designers Adhere to Guidelines

 Produce designs that are consistent with the goals of

the company – Don’t cut corners to save cost!
 Give customers the value they expect
 Make health and safety a primary concern
 Consider potential harm to the environment
 Designing for the customers

House of quality

Quality Function Ideal Value Analysis/

Deployment Product for Value Engineering
Customer
 Quality Function Deployment
 An approach to get the voice of the customer into the
design specification of a product.

 Use inter-functional teams from marketing, design

engineering, and manufacturing

 Credited by Toyota Motor Corporation

 Reduce costs on its cars by more than 60% (shortening

design times)
 Quality Function Deployment

Consumers’
Customer Technical
needs and
requirements requirements
preferences

House of Quality
The House of Quality
 The House of Quality
Correlation
Matrix
1 2 3 4 ... Competitive
Technical evaluation
Characteristics (Company
and its
Customer competitors)
Requirements Important
To Customer
1
2
3 Corrélation
4
...
Importance Weighting
Target Values
Technical evaluation
 House of Quality Example
Correlation:
X Strong positive
Positive
X X
X
X Negative
X
* Strong negative

Water resistance
Accoust. Trans.
Energy needed
Energy needed
Engineering

to close door

to open door
Check force
Competitive evaluation

resistance
Door seal
Characteristics
X = Us

Window
on level
ground
A = Comp. A
B = Comp. B
Customer (5 is best)
Requirements 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill 5 X AB

Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:

level to 7.5 ft/lb

Strong = 9
Reduce energy

Reduce energy
Reduce force
current level

current level
current level
Medium = 3
Target values to 7.5 ft/lb.
Maintain

Maintain
Maintain
Small = 1
to 9 lb.

5 BA BA
B B BXA
4 X B X
Technical evaluation A A X
3
(5 is best) 2 X A
X
1
 Value Analysis
 Achieve equivalent or better performance at a lower
cost while maintaining all functional requirements
defined by the customer
 Does the item have any design features that are not
necessary?
 Can two or more parts be combined into one?
 How can we cut down the weight?
 Are there nonstandard parts that can be eliminated?
 Other Issues in
Product and Service Design
 How much standardization
 Mass customization
 Types of product design
 Standardization
 Standardization
 Extent to which there is an absence of variety in a product,
service or process, e.g. calculators, automatic car-wash
 Standardized products are:
 Immediately available to customers
 Interchangeable parts
 E.g. GM’s standardization on key components (brakes,
electrical systems)
Standardization
 Advantages of Standardization
 Fewer parts to deal with in inventory & manufacturing
 Design costs are generally lower
 Reduced training costs and time
 More routine purchasing, handling, and inspection procedures
 Quality is more consistent
 Orders fillable from inventory
 Opportunities for long production runs and automation
 Need for fewer parts justifies increased expenditures on
perfecting designs and improving quality control procedures.
Disadvantages of Standardization
 Designs may be frozen with too many imperfections
remaining.
 High cost of design changes increases resistance to
improvements.
 Decreased variety results in less consumer appeal.
 Mass Customization
• Mass customization:
 A strategy of producing basically standardized goods or
services, but incorporating some degree of customization

 Tactic #1: Delayed differentiation (or “postponement” - not

quite completing production until customer preferences are
known, e.g. HP printers-A/C, manuals)

 Tactic #2: Modular design (component parts are grouped into

modules that are easily interchanged, e.g. PCs with
replaceable peripherals )
 Modular Design
Modular design is a form of standardization in which
component parts are subdivided into modules that are easily
replaced or interchanged. It allows:

 easier diagnosis and remedy of failures

 easier repair and replacement
 simplification of manufacturing and assembly
 Manufacturability
 Manufacturability is the ease of fabrication
and/or assembly which is important for:
 Cost
 Productivity
 Quality

 Design For Manufacturing/Assembly:

 DFM or DFA
 Types of Product design
 Design for manufacturing (DFM)
 Design for assembly (DFA)
 Design for recycling (DFR)
 Design for disassembly (DFD)
 for Remanufacturing
 Robust design:
 to make products/services that can function over a broad
range of conditions
Designing for Manufacturing (DFM)
“Beyond the overall objective to achieve customer
satisfaction while making a reasonable profit”
- The designers’ consideration of the organization’s
manufacturing capabilities when designing a product.
- The more general term “Design for operations”
(DFO) encompasses services as well as
manufacturing
 Remanufacturing
 Remanufacturing: Refurbishing used products by
replacing worn-out or defective components.
 Remanufactured products can be sold for 50% of the cost of a
new product
 Remanufacturing can use unskilled/semiskilled labor
 Some governments require manufacturers to take back used
products
 Apps: automobiles, printers/copiers, cameras, PCs
 Xerox, Kodak, and Caterpillar Inc. are the leaders (p139)
 Design for Disassembly (DFD): Designing products so
that they can be easily taken apart.
 Component Commonality
 Multiple products or product families that have a high degree
of similarity can share components (narrower concept to
standardization)
 Automakers using internal parts
 Engines and transmissions
 Water pumps
 Etc.
 Other benefits
 Reduced training for assemble and installation
 Reduced repair time and costs
 Concurrent Engineering
→ Bringing together product design and manufacturing
engineering people early in the design phase to
simultaneously develop the product/processes

→ “over-the-wall” approach

→ Breaking the traditional “us vs. them” mentality

 Computer-Aided Design
 Computer-Aided Design (CAD) is product design using
computer graphics.
 increases productivity of designers, 3 to 10 times →
can easily modify, rotate, view cross sections, print, etc.
 creates a database for manufacturing information on
product specifications
 provides possibility of engineering and cost analysis on
proposed designs, e.g. virtual stress test
 Measuring Product
Design/Development Performance
Performance Dimension Measures
Time-to-market •Freq. Of new products introduced
•Time to market introduction
•Number stated and number completed
•Actual versus plan
•Percentage of sales from new products

Productivity •Engineering hours per project

•Cost of materials and tooling per project
•Actual versus plan

•Conformance-reliability in use
•Design-performance and customer satisfaction
Quality •Yield-factory and field
 Service Design
 Service design involves:

 The physical resources needed

 The goods that are purchased or consumed by the
customer
 Explicit services: essential/core feature, e.g. tax
preparation, medical examination
 Implicit services: ancillary/extra feature, e.g.
friendliness, courtesy
 Differences Between Product
and Service Design
 Tangible vs. intangible
 Services created and delivered at the same time
 Services cannot be inventoried
 Services highly visible to customers
 Services have low barrier to entry
 Location important to service
 Range of service systems
 Demand variability
 Service Systems
 Service systems range from those with little or no
customer contact to very high degree of customer contact
such as:
 Insulated technical core (software development)
 Production line (automatic car wash)
 Personalized service (hair cut, medical service)
 Consumer participation (diet program)
 Self service (supermarket)
 Example: Chase Banking Service Design Matrix (Video
clip)
 Service-System Design Matrix
Degree of customer/server contact
Buffered Permeable Reactive
High core (none) system (some) system (much) Low
Face-to-face
total
customization
Face-to-face
Sales loose specs Production
Face-to-face
Opportunity Efficiency
tight specs
Phone
Internet & Contact
on-site
Mail contacttechnology

Low High
 Service Demand Variability
 Demand variability creates waiting lines and idle service
resources
 Customer participation makes quality and demand
variability hard to manage
 Service design perspectives may have trade-offs between
the two:
 Cost and efficiency perspective (“product design approach” to
service design) or
 Customer perspective
 Attempts to achieve high efficiency may depersonalize
service and change customer’s perception of quality, e.g.
reducing consumer choice by standardizing or bundling
as in Cable TV
 Phases in Service Design
Step 1: Conceptualize

Step 2: Identify service package components

Step 3: Determine performance specifications

Step 4: Translate performance specifications into design

specifications

Step 5: Translate design specifications into delivery

specifications
 Characteristics of Well Designed
Service Systems
1. Consistent with the organization mission
2. User friendly
3. Robust if variability is a factor
4. Easy to sustain
5. Cost effective
6. Having value that is obvious to customers
7. Effective linkages between back-of-the-house ops.
and front-of-the-house ops.
8. Single unifying theme: convenience or speed
9. Design need to ensure reliability and high quality
Guidelines for Successful Service Design
1. Define the service package
2. Focus on customer’s perspective
3. Consider image of the service package
4. Recognize that designer’s perspective is different from
the customer’s perspective
5. Make sure that managers are involved in
implementation
6. Define quality for tangible and intangibles
7. Make sure that recruitment, training and rewards are
consistent with service expectations
8. Establish procedures to handle exceptions
9. Establish systems to monitor service