OPERATIONS MANAGEMENT

14e

WILLIAM J. STEVENSON
Rochester Institute of Technology

Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1999

 CHAPTER FOUR
CHAPTER FOUR :
PRODUCT AND SERVICE
DESIGN
 Learningobjectives
After completing this chapter, you should be able to:
•List some key reasons for design or redesign.
•Identify the main objectives of product and services design.
•Discuss the importance of Standardization.
•Discuss the importance of legal, ethical, and environmental
issues in product and service design.
•Briefly describe the phases in product design and development.
•Discuss several key issues in product or service design.
 4.1. INTRODUCTION
• This section discusses what product and service designers
do, the reasons for design (or redesign), and key questions
that management must address.
What Does Product and Service Design Do?
• The primary focus of product or service design should be
on customer satisfaction.
• The various activities and responsibilities of product and
service design include the following:
1. Translate customer wants and needs into product and service
requirements.
2. Refine existing products and services
3. Develop new products and/or services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications
8. Translate product and service specifications into
process specifications
Objectives of Product and Service Design
1.Primary consideration: Customer satisfaction.
2.Secondary considerations: Cost or profit, quality, ability to
produce a product or provide a service, ethics/safety, and
sustainability.
Key Questions
1.Is there demand for it?
2.Can we do it?
3.What level of quality is appropriate?
4.Does it make sense from an economic standpoint?
Reasons for Product and Service Design or Redesign

1.Economic
2.Social and demographic
3.Political, liability, or legal
4.Competitive
5.Technological
4.2 Idea Generation
Supply chain based

Ideas Competitor based

Research based
• One of the strongest motivators for new and improved products
or services is competitors’ products and services.
• 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.
• Beyond that, some companies purchase a competitor’s product
and then carefully dismantle and inspect it, searching for ways to
improve their own product. This is called reverse engineering.
• 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
 4.3 Legal and Ethical Considerations
• Designers must be careful to take into account a wide array
of legal and ethical considerations.
• Generally, they are mandatory. Moreover, if there is a
potential to harm the environment, then those issues also
become important.
• Most organizations are subject to numerous government
agencies that regulate them.
• Product liability is the responsibility of a manufacturer for
any injuries or damages caused by a faulty product because
of poor workmanship or design.
 4.4 Other Factors
• Human factor issues often arise in the design of
consumer products. Safety and liability are two critical
issues in many instances, and they must be carefully
considered.
• Product designers in companies that operate globally
also must take into account any cultural differences of
different countries or regions related to the product.
4.5 Environmental Factors: Sustainability

• Product and service design is a focal point in the quest for

sustainability.
• Key aspects include cradle-to-grave assessment, end-of-
life programs, reduction of costs and materials used, reuse
of parts of returned products, and recycling.
1. Cradle-to-Grave Assessment
• Cradle-to-grave assessment, also known as life cycle
analysis, is the 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.
2. End-of-Life Programs
• End-of-life (EOL) programs deal with products that have
reached the end of their useful lives.
• The products include both consumer products and business
equipment. The purpose of these programs is to reduce the
dumping of products.
3. The Three Rs: Reduce, Reuse, and Recycle
• Designers often reflect on three particular aspects of
potential cost savings and reducing environmental impact:
a) reducing the use of materials through value analysis;
b) refurbishing and then reselling returned goods that are
deemed to have additional useful life, which is referred to
as remanufacturing;
c) and reclaiming parts of unusable products for recycling.
4.6 Other Design Considerations

• Aside from legal, ethical, environmental, and human

considerations, designers must also take into account
product or service life cycles, how much standardization to
incorporate, product or service reliability, and the range of
operating conditions under which a product or service must
function
• These topics are discussed in this section. We begin with
life cycles.
1. Strategies for Product or Service Life Stages
• Most, but not all, products and services go through a
series of stages over their useful life, sometimes referred
to as their life cycle, as shown in Figure 4.1. Demand
typically varies by phase.
• Different phases call for different strategies. In every
phase, forecasts of demand and cash flow are key inputs
for strategy.
2. Product Life Cycle Management is a systematic approach
to managing the series of changes a product goes through,
from its conception, design, and development, through
production and any redesign, to its end of life.
There are three phases of PLM application:
2. Beginning of life, which involves design and development;
3. Middle of life, which involves working with suppliers,
managing product information and warranties;
4. And End of life, which involves strategies for product
discontinuance, disposal, or recycling.
3. Degree of Standardization.
• Standardization refers to the extent to which there is absence
of variety in a product, service, or process. Standardized
products are made in large quantities of identical items;
calculators, computers, and 2 percent milk are examples.
• Standardized service implies that every customer or item
processed receives essentially the same service.
Advantages of Standardization

• Fewer parts to deal with in inventory & manufacturing,

• Design costs are generally lower,

• Reduced training costs and time,

• More routine purchasing, handling, and inspection
procedures.
• Orders fillable from inventory
• Opportunities for long production runs.
• Need for fewer parts justifies increased expenditures on
perfecting designs and improving quality control procedures
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.
4. Designing for Mass Customization
• Mass customization: A strategy of producing standardized
goods or services, but incorporating some degree of
customization.
• Several tactics make this possible. One is delayed
differentiation, and another is modular design;
1. Delayed differentiation; is a postponement tactic: the
process of producing, but not quite completing, a product
or service, postponing completion until customer
preferences or specifications are known.
2. Modular design; A form of standardization in which
component parts are grouped into modules that are easily
replaced or interchanged.
5. Reliability
• Reliability: The ability of a product, part, or system to
perform its intended function under a prescribed set of
conditions

• Failure: Situation in which a product, part, or system does

not perform as intended

• Normal operating conditions: The set of conditions under

which an item’s reliability is specified
• Improving Reliability
1. Improve component design.
2. Improve production and/or assembly techniques.
3. Improve testing.
4. Use backups.
5. Improve preventive maintenance procedures.
6. Improve user education.
7. Improve system design.
6. Robust Design
• 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 due to a change in the environment in which it is used
or in 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.
7. 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
8. Quality Function Deployment
• Obtaining input from customers is essential to assure that
they will want what is offered for sale. Although obtaining
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 and service development process.
• The purpose is to ensure that customer requirements are
factored into every aspect of the process. Listening to and
understanding the customer is the central feature of QFD
 4.7 Phases in Product Design and
Development
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
 4.8 Service Design
• There are many similarities between product and service
design. However, there are some important differences as well,
owing to the nature of services. One major difference is that
unlike manufacturing, where production and delivery are
usually separated in time, services are usually created and
delivered simultaneously.
• 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.
Service design involves
1.The physical resources needed
2.The goods that are purchased or consumed by the customer
3.Explicit services
4.Implicit services
Differences 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 (e.g., a haircut, a car wash)
3.Services cannot be inventoried
4.Services highly visible to customers
5.Services have low barrier to entry
6.Location important to service
Phases in the Service Design Process
1.Conceptualize.
• Idea generation
• Assessment of customer wants/needs
• Assessment of demand potential
•Identify service package components needed.
•Determine performance specifications.
•Translate performance specifications into design
specifications.
•Translate design specifications into delivery specifications.
Characteristics of Well-Designed Service Systems
1.Being consistent with the organization’s mission.
2.Being user-friendly.
3.Being robust if variability is a factor.
4.Being easy to sustain.
5.Being cost-effective.
6.Having value that is obvious to customers.
7.Having effective linkages between back-of-the-house
operations.
8.Having a single, unifying theme, such as convenience or
speed.
9.Having design features and checks that will ensure service that
is reliable and of high quality.
Guidelines for Successful Service Design
1.Define the service package in detail
2.Focus on the operation from the customer’s perspective.
3.Consider the image that the service package will present
both to customers and to prospective customers.
4.Recognize that designers’ familiarity with the system may
give them quite a different perspective than that of the
customer, and take steps to overcome this.
5.Make sure that managers are involved and will support the
design once it is implemented
6. Define quality for both tangibles and intangibles.
7. Make sure that recruitment, training, and reward
policies are consistent with service expectations.
8. Establish procedures to handle both predictable and
unpredictable events.
9. Establish systems to monitor, maintain, and improve
service.
END