Chapter Three

INFOLINK UNIVERSITY COLLEGE

PRODUCT AND SERVICE DESIGN

Dr. Sintayehu Assefa (Ph.D.)

1 Time allotted: 8hrs
 PRODUCT AND SERVICE DESIGN
2

After completing this chapter, you should be able to:

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.
LEARNING

 Discuss the importance of standardization.

 Discuss the importance of legal, ethical, and
environmental issues in product and service design.
Conti…
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 Briefly describe the phases in product design and

OBJECTIVES

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.
LEARNING

 List the characteristics of well-designed service systems.

PRODUCT AND SERVICE DESIGN
4

 Designs can provide a competitive edge by bringing new ideas to

the market quickly, doing a better job of satisfying customer
needs, (or) being easier to manufacture, use, and repair.

 It capitalizes on a firm’s core competencies and determines what

new competencies need to be developed.

 It is also the most obvious driver of change new products and

services can rejuvenate an organization, define new markets,
and inspire new technologies.
Product and service design
5

 Consumers respond to a product’s

appearance, color, texture, and
performance.

 All of its features, summed up, are

the product’s design. Someone came
up with the idea of what this
product will look like, taste like, or
feel like so that it will appeal to you.
This is the purpose of product
design.

 Product design defines a product’s

characteristics, such as its
appearance, the materials it is made
of, its dimensions and tolerances,
and its performance standards.
Conti…
6

 Service design is unique in that both the service and the

entire service concept are being designed.

 As with a tangible product, the service concept is based on

meeting customer needs. The service design, however, adds
the aesthetic and psychological benefits of the product.

 Service design defines the characteristics of a service, such

as its physical elements, and the aesthetic and
psychological benefits it provides.
 Product and Service Design

 Major factors in design strategy

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

Product and service design – or redesign – should be

closely tied to an organization’s strategy

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Product or Service Design Activities
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1. Translate customer wants and needs into product and service

requirements. (marketing, operations)
2. Refine existing products and services. (marketing)
3. Develop new products and services. (marketing, operations)
4. Formulate quality goals. (marketing, operations)
5. Formulate cost targets. (accounting, finance, operations)
6. Construct and test prototypes. (operations, marketing,
engineering)
7. Document specifications.
8. Translate product and service specifications in to process
specifications. (engineering, operations)

Product and service design involves or affects nearly every

functional area of an organization. However, marketing and
operations have major involvement.
Reasons for Product or Service Design
9

o Economic (e.g., low demand, excessive warranty claims, the

need to reduce costs).
o Social and demographic (e.g., populations shifts)
o Political, liability, or legal (e.g., government changes, safety
issues, new regulations).
o Competitive (e.g., new or changed products or services, new
advertising/promotions).
o Cost or availability (e.g., of raw materials, components, labour,
water, energy).
o Technological (e.g., in product components, processes).
Objectives of Product and Service
Design
 Main focus
 Customer satisfaction
 Understand what the customer wants
 Secondary focus
 Function of product/service
 Cost/profit
 Quality
 Appearance
 Ease of production/assembly
 Ease of maintenance/service

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 Designing For Operations
 Taking into account the capabilities of
the organization in designing goods
and services.
 Failure to take this into account can:
 Reduce productivity
 Reduce quality
 Increase costs

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Idea Generation
12

o Ideas for new or redesigned products or services can come from

a variety of sources, including

o customers,
o the supply chain,
o competitors,
o employees, and research.

o Customer input can come from surveys, focus groups,

complaints, and unsolicited suggestions for improvement.

o Input from suppliers, distributors, and employees can be

obtained from interviews, direct or indirect suggestions, and
complaints.
Conti…
13

o Another source of ideas for new or improved products or

services.

o Reverse engineering: Dismantling and inspecting a

competitor’s product to discover product improvements.

o Research and development(R&D): Organized efforts to

increase scientific knowledge or product innovation.
 Research & Development (R&D)
 Organized efforts to increase scientific
knowledge or product innovation & may
involve:

 Basic Research advances knowledge about a subject without

near-term expectations of commercial applications.

 Applied Research achieves commercial applications.

 Development converts results of applied research into

commercial applications.

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 Legal, Ethical, and Environmental
Issues
 Legal (Occupational Health and Safety Administration)

 Product liability: The responsibility of a manufacturer for

any injuries or damages caused by a faulty product
because of poor workmanship or design

 Uniform commercial code: Products carry an implication of

merchantability and fitness; that is, a product must be
usable for its intended purposes

 Ethical
 Releasing products with defects
 Environmental
 EPA (Environmental Protection Agency)
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Conti…
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Conti…
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o Organizations generally want designers to adhere to guidelines

such as the following:

o Produce designs that are consistent with the goals of the

organization.

o Give customers the value they expect.

o Make health and safety a primary concern.

HUMAN FACTORS
18

o Human factor issues often arise in the design of consumer

products.

o Safety and liability are two critical issues in many instances, and
they must be carefully considered.

o For example, the crashworthiness of vehicles is of much

interest to consumers, insurance companies, automobile
producers, and the government.
Cultural Differences
 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

 Notable failures:
 McDonald food with meat in India
 Donkey meat in Ethiopia
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Global Product Design
 Virtual teams
 Uses combined efforts of a team of designers
working in different countries
 Provides a range of comparative advantages
over traditional teams such as:

 Engaging the best human resources around the world

 Possibly operating on a 24-hr basis
 Global customer needs assessment
 Global design can increase marketability

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ENVIRONMENTAL FACTORS: SUSTAINABILITY
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o Product and service design is a focal point in the quest for

sustainability.

o Key aspects include

cradle-to-grave assessment,
end-of-life programs,
reduction of costs and materials used,
reuse of parts of returned products, and
recycling.
Cradle-to-Grave Assessment
22

• Cradle-to-grave assessment, also known as life cycle analysis, is

the assessment of the environmental impact of a product or
service throughout its useful life, focusing on such factors as
global warming (the amount of carbon dioxide released into the
atmosphere), smog formation, oxygen depletion, and solid
waste generation.

• For products, cradle-to-grave analysis takes into account impacts

in every phase of a product’s life cycle, from raw material
extraction from the earth, or the growing and harvesting of plant
materials, through fabrication of parts and assembly operations,
or other processes used to create products, as well as the use or
consumption of the product, and final disposal at the end of a
product’s useful life.
End-of-Life Programs
23

• End-of-life (EOL) programs deal with products that have reached

the end of their useful lives. The products include both consumer
products and business equipment.

• The purpose of these programs is to reduce the dumping of

products, particularly electronic equipment, in landfills or third-
world countries, as has been the common practice, or
incineration, which converts materials into hazardous air and
water emissions and generates toxic ash.

• IBM provides a good example of the potential of EOL programs.

Over the last 15 years, it has collected about 2 billion pounds of
product and product waste.
The Three Rs: Reduce, Reuse, and Recycle
24

• Reduce: Value Analysis

o Value analysis refers to an examination of the function of
parts and materials in an effort to reduce the cost and/or
improve the performance of a product.

• Reuse: Remanufacturing
o Remanufacturing refers to refurbishing used products by
replacing worn-out or defective components, and reselling the
products. Among the products that have remanufactured
components are automobiles, printers, copiers, cameras,
computers, and telephones.

o Designing products so that they can be more easily taken

apart has given rise to yet another design consideration:
Design for disassembly (DFD).
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• Recycle
o Recycling means recovering materials for future use. This
applies not only to manufactured parts but also to materials
used during production, such as lubricants and solvents.
Reclaimed metal or plastic parts may be melted down and
used to make different products.

o Companies recycle for a variety of reasons, including

1. Cost savings.
2. Environment concerns.
3. Environmental regulations.

• Design for recycling (DFR): Design that facilitates the recovery of

materials and components in used products for reuse.
OTHER DESIGN CONSIDERATIONS
26

 Strategies for Product or Service Life Stages

 Degree of standardization
 Designing for mass customization
 Product/service reliability
 Robust design
 Degree of newness
 Product Life Cycles

Cost of development and production

Sales, cost, and cash flow

Sales revenue
Net revenue (profit)

Cash
flow

Negative
cash flow Loss

Introduction Growth Maturity Decline

© 2008 Prentice Hall, Inc. Product Life Cycles 5 – 27

Standardization

 Standardization
 Extent to which there is an absence of variety
in a product, service or process

 Standardized products are immediately

available to customers

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Advantages of Standardization
29

 Fewer parts to deal with in inventory & manufacturing

 Reduced training costs and time
 More routine purchasing, handling, and inspection procedures
 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.

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Mass Customization

• Mass customization:

 A strategy of producing standardized goods

or services, but incorporating some degree
of customization

 Delayed differentiation

 Modular design

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Conti…

• Delayed differentiation is a postponement

tactic
 Producing but not quite completing a product or
service until customer preferences or specifications
are known
 For example, furniture makers can produce dining
room sets, but not apply stain, allowing customers a
choice of stains. Once the choice is made, the stain
can be applied in a relatively short time, thus
eliminating a long wait for customers, giving the seller
a competitive advantage.

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Conti…

 Modular design is a form of standardization in which

component parts are subdivided into modules that are
easily replaced or interchanged.

 Dell Computers has successfully used this concept to

become a dominant force in the PC industry by offering
consumers the opportunity to configure modules
according to their own specifications.

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Conti…
 The advantages:
 easier diagnosis and remedy of failures
 easier repair and replacement
 simplification of manufacturing and assembly

 The disadvantages:
 the decrease in variety: The number of possible configurations of
modules is much less than the number of possible configurations
based on individual components
 the inability to disassemble a module in order to replace a faulty
part; the entire module must be scrapped—usually at a higher
cost.

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Reliability
 Reliability: The ability of a product, part, or system to
perform its intended function under a prescribed set of
conditions
 Failure: Situation in which a product, part, or system
does not perform as intended
 Normal operating conditions: The set of conditions
under which an item’s reliability is specified

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Improving Reliability

• 1. Component design
• 2. Production/assembly techniques
• 3. Testing
• 4. Redundancy/backup
• 5. Preventive maintenance procedures
• 6. User education
• 7. System design

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Robust Design

 Robust Design: Design that results in products or

services that can function over a broad range of
conditions

 Consider a pair of fine leather boots - obviously not made

for walking through mud or snow. Now consider a pair of
heavy rubber boots - just the thing for mud or snow. The
rubber boots have a design that is more robust than that
of the fine leather boots.

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Taguchi Approach Robust Design

 Design a robust product: Insensitive to environmental

factors either in manufacturing or in use.

 Central feature is Parameter Design: This involves

determining the specification settings for both the product
and the process that will result in robust design in terms of
manufacturing variations, product deterioration, and
conditions during use
 Determines:
 factors that are controllable and those not
controllable
 their optimal levels relative to major product
advances
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Degree of Newness
 Product or service design change can range
from the modification of an existing product or
service to an entirely new product or service:

1.Modification of an existing product/service

2.Expansion of an existing product/service
3.Clone of a competitor’s product/service
4.New product/service

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Quality Function Deployment
 Quality Function Deployment
 Voice of the customer
 House of quality

QFD: An approach that integrates the “voice of the

customer” into the product and service development
process.

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 The House of Quality

Correlation
matrix

Design
requirements

Customer
Relationship Competitive
require-
matrix assessment
ments

Specifications
or
target values

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 House of Quality Example

Correlation:
X Strong positive
Positive
X X
X X X Negative

Water resistance
Strong negative

Accoust. Trans.
*

Energy needed

Energy needed
to close door

to open door
Engineering

Check force
resistance
Door seal
Competitive evaluation
Characteristics

Window
on level
X = Us

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
Reduce energy

Reduce energy Strong = 9

Reduce force
current level

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

Maintain
Target values
Maintain
Small = 1
to 9 lb.

5 B
BA BA
X B B BXA X
Technical evaluation 4
A A X
3
(5 is best) 2 X
X A
1

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The Kano model
43

 It is a theory of product and service design developed by Dr.

Noriaki Kano, a Japanese professor, who offered a perspective
on customer perceptions of quality different from the traditional
view that “more is better.”
 Instead, he proposed different categories of quality and posited
that understanding them would better position designers to
assess and address quality needs.
 His model provides insights into the attributes that are perceived
to be important to customers. The model employs three
definitions of quality: basic, performance, and excitement.
 The Kano Model

Kano Model
Customer Satisfaction

Excitement
Expected
Must Have

Customer Needs

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 Phases in Product Development
Process

1. Feasibility analysis
2. Product specifications
3. Process specifications
4. Prototype development
5. Design review
6. Market test
7. Product introduction
8. Follow-up evaluation

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DESIGNING FOR PRODUCTION
46

 The topics include

 concurrent engineering,
 computer-assisted design,
 the use of components for similar products.
Concurrent Engineering
47

 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.
 It means bringing design and manufacturing engineering people
together early in the design phase to simultaneously develop the
product and the processes for creating the product.
 More recently, this concept has been enlarged to include
manufacturing personnel (e.g., materials specialists) and
marketing and purchasing personnel in loosely integrated, cross-
functional teams
Computer-Aided Design
 Using computers to design products and
prepare engineering documentation
 Shorter development cycles, improved
accuracy, lower cost
 Information and designs can be deployed
worldwide

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Component Commonality
 Multiple products or product families that
have a high degree of similarity can share
components
 Automakers using internal parts
 Engines and transmissions
 Water pumps
 Etc.
 Other benefits
 Reduced training for assemble and installation
 Reduced repair time and costs

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Service Design
 Service is an act
 Service delivery system
 Facilities
 Processes
 Skills
 Many services are bundled with products

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Conti…

 Service design involves

 The physical resources needed
 The accompanying goods that are purchased
or consumed by the customer, or provided
with the service.
 Explicit services (the essential/core features of
a service, such as tax preparation).
 Implicit services (ancillary/extra features, such
as friendliness, courtesy).

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Overview of Service Design
 Service
 Something that is done to or for a customer
 Service delivery system
 The facilities, processes, and skills needed to
provide a service
 Product bundle
 The combination of goods and services
provided to a customer
 Service package
 The physical resources needed to perform
the service
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Differences Between Product
and Service Design
 Tangible – 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
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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)

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Service Demand Variability
 Demand variability creates waiting lines and
idle service resources
 Service design perspectives:
 Cost and efficiency perspective
 Customer perspective
 Customer participation makes quality and
demand variability hard to manage
 Attempts to achieve high efficiency may
depersonalize service and change
customer’s perception of quality
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Phases in Service Design
1.Conceptualize
2.Identify service package components
3.Determine performance specifications
4.Translate performance specifications
into design specifications
5.Translate design specifications into
delivery specifications

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Service Blueprinting
 Service blueprinting
 A method used in service design to describe
and analyze a proposed service
 A useful tool for conceptualizing a service
delivery system

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A simple service blueprint for a restaurant
58
Major Steps in Service Blueprinting

1. Establish boundaries
2. Identify sequence of customer
interactions
• Prepare a flowchart
3. Develop time estimates
4. Identify potential failure points

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Characteristics of Well Designed Service Systems
60

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. Value to customers
7. Effective linkages between back operations
8. Single unifying theme
9. Ensure reliability and high quality
Challenges of Service Design

1. Variable requirements
2. Difficult to describe
3. High customer contact
4. Service – customer encounter

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Guidelines for Successful Service Design
62

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
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
Operations Strategy

1. Increase emphasis on component

commonality
2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass
customization
5. Look for continual improvement
6. Shorten time to market

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Self Check Questions
64

o What are some of the factors that cause organizations to

redesign their products or services?
o What is CAD? Describe some of the ways a product designer can
use it.
o Name some of the main advantages and disadvantages of
standardization.
o What is modular design? What are its main advantages and
disadvantages?
o Explain the term design for manufacturing and briefly explain
why it is important.
o What are some of the competitive advantages of concurrent
engineering?
o Explain the term remanufacturing.
Conti…
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o What is mass customization?

o Name two factors that could make service design much different
from product design.
o Explain the term robust design.
o Explain what quality function deployment is and how it can be
useful.
o What is reverse engineering? Do you feel this is unethical?
o Explain the term “three Rs” and how the three Rs relate to
sustainability.
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