1. Operations Management
William J. Stevenson
8th edition

2. Product and Service Design
CHAPTER 4
Product and Service Design
Operations Management, Eighth Edition, by William J. Stevenson
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

3. Product and Service Design
The essence of any organization is the products or services it offers. There is an obvious link between the design of those products or services and the success of the organization.
Organization that have well-designed products or services are more likely to realize their goals than those with poorly designed products or services.
Hence, organization have a strategic interest in achieving good product and service design.

4. Product and Service Design
In existing firms, new products or services are introduced when the competition for existing products increases or as existing products approach the end of their product life cycle.
Even after a few new products are launched, and even if these products are successful, since they have limited life cycles, companies always seek and consider new product possibilities.

5. Product and Service Design
If a company continuously monitors new product possibilities, and if there is a product failure among the current products, or if there is a significant change in the product market, then the company can still be in position to release a new product to fill the void.
This chapter focuses on the design of the products and services.

6. Product and Service Design
The main topics in this chapter include:
1. The reasons, trends, and objectives of Product and Service Design.
2. The Design Process (Designing for mass customization, reliability, robust design, etc.).
3. Research and Development.
4. Standardization.
5. Product Design (concurrent engineering, computer aided design, remanufacturing).
6. Service Design.
7. Quality Function Deployment

7. Product and Service Design
What does product and service designers do?
The various activities and responsibilities of product and service designers includes:
Translating customer wants and needs into products and service requirements
Refining existing products and services
Develop new products and/or services
Formulate quality goals
Formulate cost targets
Construct and test prototypes
Document specifications

8. 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

9. Reasons for Product or Service Design
Economic (e.g. low demand, excessive warranty claims, the need to reduce costs)
Social and demographic (e.g. aging baby, population shifts)
Political, liability, or legal (e.g. governments changes, safety and environmental issues, new regulations)
Competitive (e.g. new or changes products or services, new advertising/promotions)
Cost or availability (e.g. cost of raw materials, components, labour)
Technological (e.g. technological changes in product components or processes.

10. Objectives of Product and Service Design
Main focus
Customer satisfaction: it is essential for designers to understand what the customer wants and design with that in mind
Secondary focus
Function of product
Cost/profit
Quality
Appearance
Ease of production/assembly
Ease of maintenance/service

11. Objectives of Product and Service Design
Sometimes secondary focus is referred to as designing for operations.
Failure to take this into consideration can result in reduced productivity, reduced quality, and increased costs.
For this reason, it is wise for design to solicit input from operations (production/providers) people throughout the design process to reduce the risk of achieving a design that looks good on paper but doesn’t work in reality.
In general, design, production and marketing must work closely together, keeping each other informed and taking into account the wants and needs of the customer.

12. Legal, Ethical, and Environmental Issues
FDA/B, OSHA/GEA,
Product liability (responsibility for any injuries or damages caused by a faulty product)
Uniform commercial code (product must be usable for its intended purposes)
Ethical
Releasing products with defects, GSA
Environmental
EPA
CSR

13. Regulations & Legal Considerations
Product Liability
A manufacturer is liable for any injuries or damages caused by a faulty product due to poor workmanship or design. Many business firms have lawsuits related to their products, including Firestone Tire, tobacco companies and toy manufacturers.
Uniform Commercial Code
That is, a product must be usable for its intended purposes

14. Regulations & Legal Considerations
In short, organizations generally want designers to adhere to guidelines such as the following:
Produce designs that are consistent with the goals of the organization.;
Give customers the value they expect;
Make health and safety a primary concern. At risk are employees producing the goods or delivering the services; and
Consider potential harm to the environment.

15. Other Issues in Product and Service Design
Product/service life cycles (introduction, growth, maturity and decline)
How much standardization (the extent to which there is absence of variety in a product, service or process)
Product/service reliability
Range of operating conditions

16. Life Cycles of Products or Services
Figure 4.1
Time
Introduction
Growth
Maturity
Saturation
Decline
Demand

17. Advantages of Standardization
Fewer parts to deal with in inventory & manufacturing
Design costs are generally lower
Reduced training costs and time
More regular purchasing, handling, and inspection procedures
Opportunities for long production runs and automation

18. 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.

19. Mass Customization
Companies like standardization because it enables them to produce high volumes of relatively low cost products although produces little variety.
Customers on the other hand, typically prefer more variety, although they like low cost.
Answer: Mass customization
Producing basically, standardized goods but incorporating some degree of customization in the final product or service.
Strategies:
Delayed differentiation: Producing, but not quite completing, a product or service until customer preferences are known.
Modular design: A form of standardization in which component parts are grouped into modules that are easily replaced or interchanged.

20. Reliability
Reliability: The ability of a product, part, a service or an entire system to perform its intended function under a prescribed set of conditions.
The importance of reliability is underscored by its use by prospective buyers in comparing alternatives and by sellers as one determinant of price.
Reliability also can have an impact on repeat sales, reflect on product image, and, if it is too low, create legal implications.

21. Reliability
Failure: Situation in which a product, part, or system does not perform as intended. This includes not only instances in which the item does not perform at all, but also instances in which the item’s performance is substandard or functions in a way not intended.
Take a car alarm failing to respond when……or sounding very low to provide a warning or might sound when nobody is close.
Normal operating conditions: Reliability are always specified with respect to certain conditions called the NOC. The set of conditions under which an item’s reliability is specified (i.e. load, temp, humidity etc)

22. Improving Reliability
Component design
Production/assembly techniques
Testing
Redundancy/backup
Preventive maintenance procedures
User education
System design

23. Robust Design-Taguchi Approach
Some products or services will function as designed only within a narrow range of conditions, while others will perform as designed over a much broader range of conditions.
The latter have Robust Design. Consider a pair of leather boots for and that of a rubber…………….
The more robust a product or service, the less likely it will fail due to a change in the environment in which it is used or performed.
Taguchi Approach Robust Design
A Japanese Engineer whose approach is based on the concept of Robust design.
His premise is that it is often easier to design a product that is insensitive to environmental factors, either in manufacturing or in use, than to control the environmental factors.

24. Cultural differences Global Product design
Product and service designers of companies that operate globally also must take into account any cultural differences of different countries or regions related to the product or service. This can result in different designs for different countries or regions.
Global Product design
Traditionally, product design has been conducted by members of the design team who are located in one facility or a few nearby facilities.
However, organizations that operate globally are discovering advantages in global product design, which uses the combined efforts of a team of designers who work in different countries and even on different continents.

25. Phases in Product Development Process
Idea generation (supply chain, competitor or research)
Feasibility analysis (demand? Cost, skills? Mission)
Product specifications
Process specifications
Prototype development
Design review
Market test
Product introduction (marketing to promote)
Follow-up evaluation

26. Reverse/Concurrent Engineering
Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product improvements.
Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.

27. Manufacturability
Manufacturability is the ease of fabrication and/or assembly which is important for:
Cost
Productivity
Quality

28. Computer-Aided Design
Computer-Aided Design (CAD) is product design using computer graphics.
increases productivity of designers, 3 to 10 times
creates a database for manufacturing information on product specifications
provides possibility of engineering and cost analysis on proposed designs

29. Product design
Design for manufacturing (DFM) [designing products that are compatible with an organization’s capabilities]
Design for assembly (DFA) [reducing the number of parts in a product on assembly methods]
Design for recycling (DFR) [recovering materials for future use]
Remanufacturing [refurbishing used products by replacing worn-out or defective components]
Design for disassembly (DFD) [designing so that used products can be easily taken apart]
Robust design

30. 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 [Facilities, Processes and skills]
Product bundle
The combination of goods and services provided to a customer
Service package
The physical resources needed to perform the service

31. Phases in Service Design
Conceptualize [idea, generation, assessment of customer wants and needs and demand]
Identify service package components [operations and marketing]
Determine performance specifications [operations and marketing]
Translate performance specifications into design specifications
Translate design specifications into delivery specifications

32. 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

33. Major Steps in Service Blueprinting
Establish boundaries
Identify steps involved
Prepare a flowchart
Identify potential failure points
Establish a time frame
Analyze profitability

34. Service Blue Printing

35. Characteristics of Well Designed Service Systems
Consistent with the organization mission
User friendly
Robust
Easy to sustain
Cost effective
Value to customers
Effective linkages between back operations
Single unifying theme
Ensure reliability and high quality

36. Challenges of Service Design
Service design presents some special challenges that are less likely to be encountered in product design.
Among the challenges are the following:
Variable requirements: this creates the need for robust design to accommodate a range of inputs/outputs.
Difficult to describe: Verbal descriptions can be somewhat inaccurate [color, feel, hardness……..etc]
High customer contact
Service – customer encounter: relatively large number of variables to deal with in the service-customer encounter.

37. Quality Function Deployment
Obtaining input from customers is essential to assure that they will want what is offered for sale.
Although input can be informal through discussions with customers, there is a formal way to document customer wants.
Quality function deployment (QFD) is a structured approach for integrating the “voice of the customer” into both the product or service development process.

38. Figure 4-2

39. The House of Quality Figure 4.4 Relationship Correlation matrix Design
requirements
Customer
require-
ments
Competitive
assessment
Relationship
Specifications or
target values

41. The Kano Model
This describes relationships between customer needs and customer satisfaction, for three categories of design characteristics: “must-have”, “expected” and “excitement” characteristics.
The “must-have” characteristics are those that yield a basic level of satisfaction, but do not have a potential for increasing customer satisfaction beyond certain level. (e.g. increasing length of cord for electrical appliances)
In contrast, the “expected” characteristics in a design will yield a steady increase in customer satisfaction. (e.g. Increasing life of a tire, roof, care engine..etc)
However, the greatest yield comes from “excitement” characteristics, perhaps evoking a “wow” from customers. This characteristics generate a disproportionate increase in customer satisfaction.

42. The Kano Model
Figure 4.6

43. Operations Strategy Increase emphasis on component commonality
Package products and services
Use multiple-use platforms
Consider tactics for mass customization
Look for continual improvement
Shorten time to market

44. Shorten Time to Market Use standardized components Use technology
Use concurrent engineering