Product and Service Design McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

You should be able to: 1. Explain the strategic importance of product and service design 2. Identify some key reasons for design or redesign 3. Recognize the key questions of product and service design 4. List some of the main sources of design ideas 5. Discuss the importance of legal, ethical, and sustainability considerations in product and service design 6. Explain the purpose and goal of life cycle assessment 7. Explain the phrase “the 3 Rs” 8. Briefly describe the phases in product design and development 9. Name several key issues in manufacturing design 10. Recognize several key issues in service design 11. Name the phases in service design 12. List the characteristics of well-designed service systems 13. Assess some of the challenges of service design 4-2 Student Slides

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 Student Slides 4-3

Stages of product/service design: Functional design (form, shape, size, materials, etc.) Process design (processing technology and tooling) Production design (production line & plant layout)

Product/service quality Production/delivery cost Customer satisfaction

1. Is there a demand for it? Market size Demand profile 2. Can we do it (competence)? Manufacturability - the capability of an organization to produce an item at an acceptable profit Serviceability - the capability of an organization to provide a service at an acceptable cost or profit 3. What level of quality is appropriate? Customer expectations Competitor quality Fit with current offering 4. Does it make sense from an economic standpoint? Liability issues, ethical considerations, sustainability issues, costs and profits 4-6 Student Slides

Developing New Products/Services Sources of Product Innovation Getting Them to Market Faster Designing and Developing New Services Improving Current Products/Services Designing for Ease of Production Designing for Quality

Customers Managers Marketing Operations Engineering Research and Development (R&D) Basic research Applied research

1. Technical and economic feasibility studies 2. Prototype design 3. Performance testing of prototype 4. Market sensing/evaluation and economic evaluation of the prototype 5. Design of production model 6. Market/performance/process testing and economic evaluation of production model 7. Continuous modification of production model

1. Technical and Economic Feasibility Studies Determine the advisability of establishing a project for developing the product If initial feasibility studies are favorable, engineers prepare an initial prototype design

2. Prototype Design This design should exhibit the basic form, fit, and function of the final product It will not necessarily be identical to the production model

3. Performance Testing of Prototype Performance testing and redesign of the prototype continues until this design-test-redesign process produces a satisfactorily performing prototype

4. Market Sensing/Evaluation and Economic Evaluation of the Prototype Accomplished by demonstrations to potential customers, market test, or market surveys If the response to the prototype is favorable, economic evaluation of the prototype is performed to estimate production volume, costs, and profits If the economic evaluation is favorable, the project enters the production design phase.

5. Design of Production Model The initial design of the production model will not be the final design; the model will evolve

6. Market/Performance/Process Testing and Economic Evaluation of Production Model The production model should exhibit: low cost reliable quality superior performance the ability to be produced in the desired quantities on the intended equipment

7. Continuous Modification of Production Model Production designs are continuously modified to: Adapt to changing market conditions Adapt to changing production technology Allow for manufacturing improvements

About 5% of all new-product ideas survive to production, and only about 10% of these are successful. It is best to cancel unpromising new- product/service development projects early! Employees often become emotionally caught up in these projects and are overly optimistic An impartial management review board is needed for periodic reviews of the progress of these projects.

Speed creates competitive advantages Speed saves money Tools to improve speed: Autonomous design and development teams Computer-aided design/computer-aided manufacturing (CAD/CAM) Simultaneous (concurrent) engineering

Autonomous Design and Development Teams Teams are given decision-making responsibility and more freedom to design and introduce new products/services Time-to-market has been slashed dramatically Enormous sums of money have been saved Teams do not have to deal with the bureaucratic red tape ordinarily required to obtain approvals

Computer-Aided Design/Computer-Aided Manufacturing (CAD/CAM) Engineers, using CAD/CAM, can generate many views of parts, rotate images, magnify views, and check for interference between parts Part designs can be stored in a data base for use on other products When it is time for manufacturing, the product design is retrieved, translated into a language that production machinery understands, and then the production system can be automatically set up.

Simultaneous (Concurrent) Engineering Economic and Technical Feasibility Studies Product/ Service Ideas Production Process Design Product/Service Design Produce and Market New Product/Service Continuous Interaction

Focus is improving performance, quality, and cost Objective is maintaining or improving market share of maturing products/services Little changes can be significant Small, steady (continuous) improvements can add up to huge long-term improvements Value analysis is practiced, meaning design features are examined in terms of their cost/benefit (value).

Ease of Production (Manufacturability) Specifications - Precise information about the characteristics of the product Tolerances - Minimum & maximum limits on a dimension that allows the item to function as designed Standardization - Reduce variety among a group of products or parts Simplification - Reduce or eliminate the complexity of a part or product

Crucial element of product design is its impact on quality Quality is determined by the customer’s perception of the degree of excellence of the product/service’s characteristics Chapter 7 covers the principles of designing products/services for quality

Three general dimensions of service design are: Degree of Standardization of the Service Custom-fashioned for particular customers or basically the same for all customers? Degree of Customer Contact in Delivering the Service High level of contact (dress boutique) or low level (fast- food restaurant)? Mix of Physical Goods and Intangible Services Mix dominated by physical goods (tailor’s shop) or by intangible services (university)?

Differences Between New Service and New Product Development Unless services are dominated by physical goods, their development usually does not require engineering, testing, and prototype building. Because many service businesses involve intangible services, market sensing tends to be more by surveys rather than by market tests and demonstrations.

Legal considerations Ethical considerations Human factors Cultural factors Global product and service design Environmental factors Others 4-27 Student Slides

Sustainability Using resources in ways that do not harm ecological systems that support human existence Key aspects of designing for sustainability Cradle-to-grave assessment (Life-Cycle assessment) End-of-life programs The 3-Rs Reduction of costs and materials used Re-using parts of returned products Recycling Student Slides 4-28

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 Common questions used in value analysis Is the item necessary; does it have value; could it be eliminated? Are there alternative sources for the item? Could another material, part, or service be used instead? Can two or more parts be combined? Can specifications be less stringent to save time or money? Do suppliers/providers have suggestions for improvements? Can packaging be improved or made less costly? 4-29 Student Slides

Remanufacturing Refurbishing used products by replacing worn-out or defective components Can be performed by the original manufacturer or another company Reasons to remanufacture: Remanufactured products can be sold for about 50% of the cost of a new product The process requires mostly unskilled and semi-skilled workers In the global market, European lawmakers are increasingly requiring manufacturers to take back used products Design for disassembly (DFD) Designing a product to that used products can be easily taken apart 4-30 Student Slides

Recycling Recovering materials for future use Applies to manufactured parts Also applies to materials used during production Why recycle? Cost savings Environmental concerns Environmental regulations Companies doing business in the 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 recylcable parts 4-31 Student Slides