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1. Chapter three
Design of goods and
services

2. Learning Unit Objectives
 Once this unit is completed you should be able to:-
 Understand the basis of competitiveness in both service
and manufacturing environments
 Understand the functions of goods and services design
 Understand the application of the steps in product design
and development
 Apply the processes for the generation of new ideas
 Understand the concept of product-life-cycle management

3. Learning objectives
• Raise awareness of the concept that satisfying
customers is perhaps the most important
competitive goal of any business
• Understand that customers form perceptions of
the quality of goods and services by comparing
their expectations with actual outcomes
• Understand the main objectives and importance
of goods and service design
• Define the product life cycle and the steps in the
actual design process

4. Learning objectives
• Explain the concept of a product development
team
• Explain robust design, manufacturability,
modular design, and CAD
• Discuss value analysis and configuration
management
• Explain the principles and practices of kaizen
• Discuss the concepts of mass customisation and
modular design
• Appreciate that gathering customer information
is vital to providing a quality service.

5. Introduction
• What do customers know about their
customers?
• What makes customers use the good or service
on offer?
• What factors ensure customer retention?
• DO managers think in terms of which service
customers use AND in terms of the benefits
customers seek?
• How do customers judge a quality good or
service?
ANSWERS HAVE A DIRECT IMPACT ON
COMPANY SURVIVAL

6. 3.1 Introduction
• Design of goods and services = key to
organisational survival and success
• Good design: all activities connected with
introducing new good to the market
• Service design: all activities connected
with introducing new service to the market
• Interconnected
• Pressures.

7. Pressures
Pressures on design managers include:-
Customer and markets, local and
international
Full exploitation of latest technology
available
Globalisation of markets
Change in customer demand patterns
Other applications for existing products

8. 3.2 Basis of competitiveness
Globalisation – no longer guaranteed a firm base of customers
Factors:
– Technology – keep ahead with latest technology
– Outside influences – Government legislation i.e.
environmental controls, trade union activity i.e. health &
safety measures
– Economic indicators – other emerging markets i.e. China
– The competition!!
– Cost and availability – resources must be right price and
quality to enable manufacture of goods at right price and
standard

9. 3.2 Basis of competitiveness (cont.)
• No single factor accounts for customer
satisfaction
• Customer requirements paramount
importance
• Marketing & operations departments work
together to understand customer desires
during design.

10. 3.3 Functions of goods-and-service
design
• Clear definition (customers, markets)
• Understanding customers long and short-term
needs
• Linkages between customer & design,
production and delivery
• Relationships with customers
• Complaint management processes
• Measurement of customer satisfaction.

11. 3.4 Product development
• Product life-cycle
– Introduction
– Growth
– Maturity
– Decline

12. 3.4 Product development
Show vide “product lifecycle”

13. 3.4 Product development
• Steps in product design and development
– Planning – development of design strategy. Technology
check
– Concept development – investigate target market and its
requirements
– System design - identify all sub-systems required to make
up the good/service
– Detailed design – specification of good/service. Product
and quality specifications. Process plan developed
– Testing & improvement – prototype production.
Performance evaluation
– Production initialisation – production commences.
Operator training. Product/good launched

14. 3.4 Product development
• Product development team
– Ensures the product/good that is introduced is a success
– Does the product/good meet customer requirements?
– Multi-disciplinary
• System, parameter and tolerance design
- Process of applying scientific and engineering knowledge to
produce a basic functional design that meets both
customer needs and manufacturing requirements

15. 3.5 Robust design
• Blueprint – that can be manufactured to
specifications during the manufacturing
process
• Specific purpose
• Reduces probability of failure
• Considers environmental factors.

16. 3.6 Ensuring manufacturability &
analysis of value
These two activities are inseparable
•Advantages:
– Cost reduction
– Robust design
– Improved operating characteristics
– Easy maintenance
– Reduced intricacy
– Improved safety

17. 3.6 Ensuring manufacturability &
analysis of value
• DFMA – Design for manufacturability and
assembly
• Objective – increase quality by ensuring
goods designed for manufacturing fit
seamlessly into the manufacturing process
• Simplify the transformation process

18. 3.6 Ensuring manufacturability &
analysis of value
• Reduce all parts to simplest
• Curtail the number of operations
• Design to only meet customer requirements
• Design product to tie in with competence of
process
• Include highest level of quality for
standardised parts
• Minimise use of specialist equipment
• etc….

19. 3.6 Ensuring manufacturability &
analysis of value
• Generation of new product ideas
• Creativity
• Reasons for new products – changes in:
• General
• Economic indicators
• Technology
• Customer needs
• Politico-legal environment
• Environment.

20. Brainstorming
Uses team participation to spawn
innovative thoughts on specific
subject matter
•No idea should be criticised
•No idea should be belittled
•No idea should be laughed at

21. Brainstorming
Show brainstorming video

22. Brainstorming
GROUP EXERCISE
You are asked to design a new
motor vehicle that will be very
energy efficient. Generate some new
ideas for this car.

23. 3.7 Product life cycle management
• Important acronyms:
 PPO – product and process optimisation
 SBU – strategic business unit
 JIT – just in time
 QFD – quality function deployment
 CPI – continuous process improvements

24. PPO
• Product optimisation is the practice of making changes
or adjustments to a product to make it more desirable.
• Example
• A product has a number of attributes. For example, a
soda bottle can have different packaging variations,
flavours, nutritional values. It is possible to optimise a
product by making minor adjustments. Typically, the goal
is to make the product more desirable and to increase
marketing metrics such as Purchase Intent, Believability,
Frequency of Purchase, etc

25. SBU
• An autonomous division or organisational unit,
small enough to be flexible and large enough to
exercise control over most of the factors
affecting its long term performance.
• Because strategic business units are more agile
(and usually have independent missions and
objectives), they allow the owning conglomerate
to respond quickly to changing economic or
market situations

26. JIT
a system in which goods are made or
purchased just before they are needed, so
as to avoid carrying high levels of stock.

27. QFD
Listening to voice of the market (customer). It is a
structured product development process which
translates what the market requires into a
programme to create, manufacture, and deliver it.
In a QFD process, multi-skilled teams collaborate
to arrive at a common understanding of the
customer needs, and determine the appropriate
technical requirements of each stage.

28. CPI
Ongoing activities aimed at process
simplification, and reduction or elimination of
process waste.

29. 3.7 Product life cycle management
• Managing reprocessing, restructuring or
re-engineering change
– Key to managing change is to get an optimal
balance between types of change:
• CPI restructuring or renovation
• New product introduction
• Strategic technology insertion
• Agile and virtual organisational traits

30. 3.7 Product life cycle management
• Managing continuity and configuration
management
– Continuity (ongoing similarity)
– Configuration (arrangement of parts)
– 3 stages:
• Development
• Production
• Service

31. 3.7 Product life cycle management
• Managing revision changes:
– Change management
– Class discussion (see Table 3.1
p85)

32. 3.7 Product life cycle management
• Managing revision changes:
– Focusing on customer satisfaction
– Incorporating lessons learned.

33. 3.8 Mass customisation
• process speedily fabricates parts of
components that are unvarying
• Could include customised parts
• E.g. MacDonald’s
• Successful when:
– Modular design
– Effective scheduling
– Speedy throughput rate.

34. Summary
• Considered importance of goods & service
design
• Competitiveness
• Product development
• Robust design
• Manufacturability & analysis of value (DFMA)
• Product life cycle management
• Mass customisation.

35. GROUP EXERCISE
In groups of 2 please complete case studies 1 & 2
on page 93

36. Next Week
1. Read p 95 – 112
2. Write a short paragraph explaining the basics
of kaizen. How is it implemented in an
organisation?
3. Write a paragraph describing mass
customisation with examples.