Chapter - 3

Design of Goods & Services

 1. Introduction
 Effective design can provide a competitive edge by:
 matching product or service characteristics with customer

requirements
 ensuring that customer requirements are met in the
simplest and least costly manner
 reducing time required to design a new product or
service
 minimizing revisions necessary to make a design
workable
 So, managers should work hard to improve their
operations design
 2. What is Design ?

 It is the process of structuring component

parts/activities of a product so that as a unit it can
provide specified value for the one who purchases it.

 Design happens before construction: To ‘design’ is to

conceive the looks, arrangement and workings of
something before it is constructed.

 We have to design and re-designs both products and

services
 Design Vs Strategy
 Product and service design –or redesign– should be closely
tied to an organization’s strategy
 Major factors in design strategy
 Cost

 Quality

 Time-to-market

 Customer satisfaction

 Competitive advantage

 Design plays a major role because it entails significant

investment of funds and establish cost and productivity
patterns that continue in future
 3) Product or Service Design Activities

 When an organization decides to design its new product or service or

refine its existing product or service, it supposes to follow certain activities
rigorously and diligently/carefully.
 The following activities are necessary:-
 Translate customer wants and needs into product and service requirements
 Refine existing products and services
 Develop new products and services
 Formulate quality goals
 Formulate cost targets
 Construct and test prototypes
 Document specifications
 Even though design activity is the responsibility of every functional area, most of the above
activities are done by marketing and operations
 4) Objectives of design

The objectives of design may vary from situations to situations

and from organization to organization. An obvious reason
includes:
 To bring new or revised products to the market as quickly as

possible
 To reduce cost and/or increase profit.

 To ensure ease of production/assembly

 To ensure ease of maintenance/service

 To increase quality and level of customer satisfaction

 5. Philosophies towards product design
Strategies for New-Product Introduction
 Market-pull philosophy – its logo is: “one should make
what can be sold”.
 Technology – push strategy – its logo is: “one should
sell what can be made”.
 Inter – functional philosophy – its logo is: “Product
design and development is neither market pull nor
technology push.
Rather it is inter-functional and interactive process of
customers, marketing, finance, personnel, engineering,
procurement, suppliers and other related functional areas .”
 6. Issues for product design
a) Legal, Ethical, and Environmental issues: Designers
must be careful to take into account a wide array of legal
and ethical considerations. Moreover, if there is a potential
to harm the environment, then those issues also become
important
 Cont’d

b) Design for manufacturability (DFM):

 Manufacturability refers to the ease with which the product can
be manufactured. Three concepts are closely related to
designing for easy of production. These are:
 Simplifications: is a design or redesign strategy that improves
the manufacturability, serviceability, or reliability of a product or
service by reducing the complexity of its design
 Specifications: is a detail description of material, parts, or
products including physical dimensions. These specifications
profiled production department with precise information about
the characteristics of products to be produced
 Cont’d

 Standardization: refers to a design activity that reduce

variety amount a group of product or parts.
 Standardized products are made in large quantities of
identical items. standardized products mean interchangeable
parts, which greatly lower the cost of production while
increasing productivity and making replacement or repair
relatively easy compared with that of customized parts.
Design costs are generally lower
 Standardization also has disadvantages. A major one relates
to the reduction in variety. This can limit the range of
customers to whom a product or service appeals
 c) Mass Customization

 A strategy of producing standardized/uniform goods or services, but

incorporating some degree of customization/to suit individual requirement. A
strategy to provide products in lot sizes of one in high volume.
 Is applicable to products characterized by short life cycles, rapidly

advancing technology, or changing customer requirements

 Forms of Mass Customization
• 1.Delayed differentiation: it is a postponement tactic-Producing but not quite
completing a product or service until customer preferences or specifications are
known
• 2.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
 Mass Customization ---cont’d
Modular design: Multiple products using common parts, processes
and modules.
The products should be composed of detachable components so
that whenever any part fails, that part is replaced by a new one.
Thus the advantages of modular design can be:-
 Diversity can be offered to the customer.
 Inventories can be substantially reduced.
 Cannibalisation is easy it means parts of one equipment salvaged/saved for
use in another application.
 Repair is cheap because only a few standard tools are needed.
 Modular Design ---cont’d

 Allows greater variety through ‘mixing and matching’ of modules

 Develops a series of basic product components (modules) for
later assembly into multiple products

 Reduces complexity & costs associated with large number of

product variations

 Easy to subcontract production of modules

 d) Concurrent Design than sequential design

In its narrowest sense, concurrent engineering 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
-It is an approach to product/service design in which the concerns
of more than one function are considered simultaneously such as
design for manufacturability; design for procurement,
design for environment; and design for disassembly
- The objective of this technique is to achieve a smoother transition
from product design to production ,and to decrease product
development time
.
 .
 e) Robust design:
 some products will perform as designed only within a
narrow range of conditions, while other product will as
designed over a broader range of conditions.

 The more the robust a product is, the less likely that it will
fail due to a change in the environment in which it is used
or in which it perform
 f) Value analysis and Value engineering

the term VE and VA are used almost interchangeably but they

are not identical.
Value engineering focuses on pre- production design
improvement while VA (even though is a related techniques)
takes place during the production process when it is clear that
a new product is a success.
The basic objective of VE &VA is to achieve equivalent or better
performance at a lower cost while maintaining all functions
and quality requirements.
It does this largely by identifying and eliminating hidden,
invisible, and unnecessary cost.
 g) Ergonomics (human factor engineering)

is concerned with improving productivity by designing workplaces, tools

instruments and so on that takes in to account the physical capabilities
of people.
 The objectives of ergonomics (human factor engineering) are to
improve human performance by increasing speed, accuracy, and safety;
to reduce energy requirement and fatigue; to reduce the amount and
cost training and special skills; to reduce accidents due to human error,
and to improve the comfort and acceptance by the user
 h) Use Technology in the Design Process
 Computer Aided Design (CAD)
 assists in creation, modification, and analysis of a design
 CAD includes:
 computer-aided engineering (CAE)
 tests and analyzes designs on computer screen
 computer-aided manufacturing (CAM)
 ultimate design-to-manufacture connection
 product life cycle management (PLM)
 managing entire lifecycle of a product
 Integrates decisions of those involved in product development,
manufacturing, sales, customer service, recycling, and disposal
 i. Quality Function Deployment (QFD)

 An approach which integrates

“voice of customers” into
product development process
 Purpose:

 To ensure the customer

requirements are factored into
every aspect of the development
process
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 A. Product design Process

 Product design –is the process of defining

all of the companies product characteristics
 defines appearance of product
 sets standards for performance
 specifies which materials are to be used
 determines dimensions and tolerances
 Cont’d
 Step 1 - Idea Development
- what someone thinks of a need for a product/service design to satisfy it
e.g. customers, marketing, engineering, competitors,
benchmarking
 Step 2 - Product Screening
- Every business needs a formal/structured evaluation process
e.g. fit with facility and labor skills, size of market, contribution margin,
break-even analysis, return on sales
 Step 3 – Preliminary Design and Testing
- Technical specifications are developed, prototypes built, testing starts
 Step 4 – Final Design
- Final design based on test results, facility, equipment, material, & labor
skills defined, suppliers identified
These Product Design Processes will be discussed as follows:
.
 .
Product Design Process

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Product Design
Process

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Product Design Process

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 i. Idea Generation Sources
 Ideas for new and improved products or services can come from a wide
range of sources, both from within the organization and from outside it.

 Internal source:
 Employees-including those who make products or deliver services to
customers, salespeople, maintenance and repair personnel and purchasing
agents, can be a rich source of ideas, if they are motivated to offer
suggestions.
 Marketing people are often sources of ideas based on their studies of
markets, buying patterns, and familiarity with demographics.
 Research based: Organized efforts to increase scientific knowledge or
product innovation. It can be basic research, applied research of the R & D
unit of the org.
 Cont’d

External source:
 External sources of ideas include customers, competitors,

and suppliers.
 Customers: may submit suggestions for improvements or

new products, or they may be queried through the use of

surveys or focus groups. One such approach is quality
function deployment, which seeks to incorporate the "voice
of the customer" into product and service design. Customer
complaints can provide valuable insight into areas that need
improvement
 Cont’d

 Competitor based: Strongest motives for new or improved

product is competitors’ product. New idea can be generated through:
 Reverse engineering :Dismantling and inspecting of a competitor’s product
to discover product improvements. Dismantling competitor’s product to improve
your own product.
 By studying a competitor's products or services and how the
competitor operates (pricing policies, return policies, warranties,
location strategies, etc.), an organization can glean many ideas
 Benchmarking: Comparing product/service against best-in-class
 ii. Idea screening
Not all new ideas should be developed in to new products and
hence the second step is screening. The purpose of screening is
to eliminate ideas that do not appear to have a high potential for
success and there for avoid expensive development costs.
Feasibility Study
 Market analysis (demand)

 Economic analysis: Cost-benefit analysis (cost, Cash flows, NPV)

 Technical analysis (capabilities)

 Performance specifications
 how well the design is: in terms of Speed, Capacity, Power, Accuracy, etc.
iii. Preliminary design and testing
 Build a prototype
 Form design = how the product will look?
 Functional design =
1.reliability
2.maintainability
3.usability

 Production design
 Test prototype
 Revise design
 Retest
 Rapid Prototyping ---cont’d

i) Form Design
 how the product will look?

ii) Functional Design

 Reliability
 Maintainability
 Usability
 Rapid Prototyping ---cond

a) Reliability:
 it is the probability of no major failure of
the product during use
 to have duplicate components operating in
parallel
 Rapid Prototyping ---cont’d

b. Maintainability
 Is the ability of a system or an item to be maintained
 i.e. the ease, accuracy , safety, and economy in the performance of
maintenance actions
 It is a design parameter
 It can be measured in terms of a combination of:
 maintenance frequencies
 maintenance times (elapsed times and labor hours)
 maintenance costs, and
 related logistic support factors
 The trade off b/n trouble-freeness and maintainability is important decision
 The after – sale service feedback is quite valuable in improving upon the
reparability and the maintainability of a product
 Rapid Prototyping ---cont’d

c. Usability
 Ease of use of a product or service

 ease of learning
 ease of remembering how to use
 frequency and severity of errors
 user satisfaction with experience
Rapid Prototyping ---cond

iii) Production Design

 Simplification
 reducing number of parts, assemblies, or options
in a product
 Modularity
 combining standardized building blocks, or
modules, to create unique finished products
 iv. Final Design and Process Plans
 Final design
 detailed drawings and specifications for new product
or service
 Process plans
 workable instructions
 necessary equipment and tooling
 component sourcing recommendations
 job descriptions and procedures
 computer programs for automated machines
B. Service Design Process

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 The service Design Process
• The steps in the service design process are explained below:
1. The service concept
– It defines the target customer and the desired
customer experience.
– It also defines how the service is different from others.
2. Service package
– The service package consists of a mixture of physical items, sensual benefits,
and psychological benefits.
-physical items, ….. food, drinks, tableware, napkins
-sensual benefits, and …….. taste and aroma of the food and the sights and
sounds of the people
-psychological benefits……. rest and relaxation, comfort, status, and a sense of
well-being
 Cont’d

c. Delivery specifications: outline the steps required in the work process.

• It includes the work schedule, deliverables, and the locations
at which the work is to be performed.

4. Service Delivery

– Rendering the service to the customer in the specified

premise.