This is about the product and service design in operation management

1. Product and Service
Design

2. What does product and service design
do?
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 into process specifications.
(engineering specifications)

3. Most purchasing decision entails two fundamental
considerations which are cost and quality/ performance. From
organization standpoint, the key questions are:
1. Is there a demand for it?
2. Can we do it?
3. What level of quality is appropriate?
4. Does it make sense from an economic standpoint?

4. Reasons for Product and Service
design or redesign
 Economic (low demand, excessive warranty claims, the need to reduce cost)
 Social and demographic ( aging baby boomers, population shifts)
 Political, liability, or legal ( gov’t. changes, safety issues, new regulations)
 Competitive (new or changed products or services, new
advertising/promotions)
 Cost/Availability (of raw materials, components, labor, water, energy)
 Technological (in product components, processes)

5. Question:
Where do you think product or service
ideas in an organization comes from?

6. IDEA GENERATION
Ideas for new or redesigned products or services can come
from a variety of sources, including customers, the supply
chain, employees, and research.
Customers input came from survey, focus groups,
complaints, and unsolicited suggestions for improvement.
Input from suppliers, distributors, and employees can be
obtained from interviews, direct or indirect suggestions,
and complaints.

7. Reverse Engineering
Dismantling and inspecting a
competitor’s product to discover product
improvements. Sometimes reverse
engineering can enable a company to
leapfrog the competition by developing
and even better product.

8. Research and Development (R&D)
Refers to organized efforts that are directed toward increasing scientific
knowledge and product or process innovation.
R&D efforts may involve basic research, applied research, or
development.
Basic Research has the objective of advancing the state of knowledge
about a subject, without any near-term expectation of commercial
application.
Applied Research has the objective of achieving commercial
applications
Development converts the result of applied research into useful
applications.

9. Legal and Ethical Considerations
Product Liability is the responsibility of a manufacturer for any
injuries or damages caused by a faulty product because of poor
workmanship or design.
Organizations want designers to adhere to guidelines such as the
ff.:
1. Produce design that are consistent with the goals of an
organization.
2. Give customers the value they expect.
3. Make health and safety a primary concern.

10. ENVIRONMENTAL FACTORS:
SUSTAINABILITY
Cradle-to-grave Assessment, also known as life cycle
analysis.
Assessment of the environmental impact of a product or service
throughout its useful life, focusing on such factors as global
warming, smog formation, oxygen depletion, and solid waste
generation.
For product, cradle to grave analysis takes into account impacts
in every phase of a product’s life cycle, from raw materials
extraction from the earth, fabrication, consumption and final
disposal at the end of product’s useful life.

11. The goal of cradle-to-grave
assessment is to choose products
and services that have the least
environmental impact while still
taking into account economic
considerations.

12. End-of-Life Programs
End-of-life (EOL) programs deal with products that
have reached the end of their useful lives. The
purpose of these programs is to reduce the
dumping of products (electronic equipment) in
landfills or third world countries, or incineration
which converts materials into hazardous air and
water emissions and generates toxic ash.

13. The Three Rs: Reduce, Reuse, Recycle
Designers often reflect on three particular aspects of
potential cost saving and reducing environmental
impact: reducing the use of materials through value
analysis, refurbishing and reselling returned goods
that are deemed to have additional useful life, which
is referred to as manufacturing; and reclaiming parts
of unusable products for recycling.

14. Reduce: Value Analysis
refers to the examination of the function of parts and materials in an effort to
reduce the cost and/or improve product performance.
Reuse: Remanufacturing
Refers to refurbishing used products by replacing worn-out or defective
components, and reselling the products.
Recycle
Means recovering materials for future use. Companies recycle for a variety of
reasons, including
1. Cost savings
2. Environmental concerns
3. Environmental regulations

15. Other Design Considerations
1. Product and Service Life Cycles

16. Identify where these products on
product life cycle?
1. Milktea
2. Iphone
3. Face mask
4. Beauty products
5. Airbuds
6. Starbucks

17. 2. Product Life Cycle Management
A systematic approach to managing the
series of changes a product goes through, from
its conception to its end-of-life.

18. 3. Degree of Standardization
 refers to the extent to which there is absence of variety in a
product, service or process.
Advantages:
1. Fewer parts to deal with in inventory and in manufacturing
2. Reduced training costs and time.
3. More routine purchasing, handling, and inspection procedures
4. Orders fillable from inventory
5. Opportunities for long production runs and automation.

19. Cont’d.
Disadvantages:
1. Reduction in variety
2. High cost of design changes increases resistance
to improvements.
3. Decreased variety results in less consumer appeal.

20. 4. Design for Mass Customization
A strategy of producing basically standardized
goods, but incorporating some degree of
customization in the final product or service. Some
tactics make this possible.
A. Delayed Differentiation
B. Modular Design

21. A. Delayed Differentiation
It is a postponement tactic: the process of
producing, but not quite completing, a product or
a service, postponing completion until customer
preferences or specifications are known. In the
case of goods, almost finished units might be held
in inventory until customers orders are received, at
which time customized features are incorporated,
according to customer requests.

22. B. Modular Design
Is a form of standardization. Modules
represent groupings of component
parts into subassemblies, usually to the
point where individual parts lose their
separate identity.

23. 5. Reliability
Is a measure of the ability of a product, a part or service,
or an entire system to perform its intended function
under a prescribed set of conditions. Reliability also can
have an impact on repeat sales, reflect on the product’s
image, and if it is too low, create legal implications.
Reliability is also a consideration for sustainability; the
higher the reliability of the product, the fewer the
resources that will be needed to maintain it, and the less
frequently it will involve the three Rs.

24. Failure is used to describe a situation in
which an item does not perform as
intended. This includes not only instances
in which item does not function at all, but
also instances in which the items is
substandard or it functions in a way not
intended.

25. Potential ways to improve realibility
 Improve component design
 Improve production and/or assembly techniques
 Improve testing
 Use backups
 Improve preventive maintenance procedures
 Improve user education
 Improve system design

26. 6. Robust Design
Design that results in products or services that can
function over a broad range of conditions.
The more robust a product or service , the less likely it will
fail in the environment in which it is used or which it is
performed. Hence, the more designers can build
robustness into the product or service, the better it should
hold up, resulting in a higher level of customer
satisfaction.

27. Example:
 Consider a pair of fine leather boots- obviously not
made for trekking through mud or snow. Now,
consider a pair of heavy rubber boots- just the thing
for mud and snow. The rubber boots have a design
that is more robust than that of a fine leather boots.

28. 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 or service.
2. Expansion of an existing product line or service offering.
3. Clone of a competitor’s product or service.
4. New product or service.

29. The Kano Model
Is a theory of product and service design developed by
Dr. Noriaki Kano, a Japanese professor, who offered a
perspective on customer’s perceptions of quality different
from the traditional view that “more is better”. The model
employs three definitions of quality.
a. Basic Quality
b. Performance Quality
c. Excitement Quality

30. a. Basic Quality
refers to customers requirements that have only a
limited effect on customer satisfaction if present,
but lead to dissatisfaction if not present. For
example, putting a short chord on a electrical
appliances will likely result in customers
dissatisfaction but adding more chord will not lead
to increased level of customer satisfaction.

31. b. Performance Quality
Refers to customers requirements that
generate satisfaction or dissatisfaction in
proportion to their level of functionality and
appeal. For example adding a thread life to a
tire or the amount of time house paint will
last will add to customer satisfaction.

32. c. Excitement Quality
Refers to a feature or attribute that was
unexpected by the customers and causes
excitement (the wow Factor) such as
voucher for a dinner for two at the hotel
restaurant when checking in.

33. PHASES IN PRODUCT DESIGN AND
DEVELOPMENT
1. Feasibility Analysis- entails market analysis, economic analysis, technical
analysis.
2. Product Specifications- Involves detailed description of what is needed
to meet (or exceed) customer wants, and requires collaboration between
legal, marketing and operations.
3. Process Specifications- Once product specifications have been set,
attention turns to specifications for the process that will be needed to
produce the product
4. Prototype Development- At this stage, any necessary changes are made
or the project is abandoned.

34. Cont’d.
4. Market Test- A market test is used to determine the
extent of consumer acceptance. If unsuccessful, the
product returns to the design review phase.
5. Product Introduction- The new product is promoted
6. Follow-up evaluation- based on user feedback,
changes may be made or forecasts refined.

35. Designing for Production
1. Concurrent Engineering
2. Computer-aided Design (CAD)
3. Production Requirements
4. Component Commonality

36. SERVICE DESIGN
Service.
Refers to an act, something that is done to or for a
customer (client, patient, etc. ). It is provided by a
service delivery system, which includes the
facilities, processes, and skills needed to provide the
service. Many services are not pure services, but
part of a product bundle- the combination of
goods and services provided to a customer.

37. Difference between Service Design and
Product Design
1. Products are generally tangible; services are generally intangible.
2. In many instances, services are created and delivered at the same time
(haircut, car wash). In such instance, there is a less latitude in finding
and correcting in finding and correcting errors before the customer has
a chance to discover them.
3. Services cannot be inventoried.
4. Services are highly visible to consumers and must be designed with
that in mind; this adds an extra dimension to process design, one that
usually not present in product design.

38. Cont’d.
5. Some services have low barriers to entry and exit.
6. Location is often important to service design, with
convenience as a major factor.
7. Service systems range from those with little or no
customer contact to those that have a very high
degree of customer contact.

39. Service Blueprinting
A useful tool for conceptualizing a service
delivery system which is a method for describing
and analyzing a service process. A service
blueprint is much like an architectural drawing,
but instead of showing building dimensions and
other construction features, a service blueprint
shows the basic customer and service actions
involved in a service operation.