Product and Service Design

4-2

• Major factors in design strategy– Cost– Quality– Time-to-market– Customer satisfaction– Competitive advantage

Product and Service Design

Product and service design – or redesign – should be closely tied to an organization’s strategy

4-3

1. Translate customer wants and needs into product and service requirements

2. Refine existing products and services3. Develop new products and services4. Formulate quality goals5. Formulate cost targets6. Construct and test prototypes7. Document specifications

Product or Service Design Activities

4-4

Other Issues in Product and Service Design

• Product/service life cycles• How much standardization• Mass customization• Product/service reliability• Robust design• Degree of newness• Cultural differences

4-5

Standardization

• Standardization – Extent to which there is an absence of variety in

a product, service or process• Standardized products are immediately

available to customers

4-6

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

• Quality is more consistent

4-7

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.

4-8

• Mass customization:– A strategy of producing standardized goods or

services, but incorporating some degree degree of customization

– Delayed differentiation– Modular design

Mass Customization

4-9

• Delayed differentiation is a postponement tactic– Producing but not quite completing a product

or service until customer preferences or specifications are known

Delayed Differentiation

4-10

Modular Design

Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. It allows:

– easier diagnosis and remedy of failures– easier repair and replacement – simplification of manufacturing and assembly

4-11

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

4-12

Improving Reliability

• Component design• Production/assembly techniques• Testing• Redundancy/backup• Preventive maintenance procedures• User education• System design

4-13

Product Design

• Product Life Cycles• Robust Design• Concurrent Engineering• Computer-Aided Design• Modular Design

4-14

Robust Design: Design that results in products or services that can function over a broad range of conditions

Robust Design

4-15

Phases in Product Development Process

1. Idea generation2. Feasibility analysis3. Product specifications4. Process specifications5. Prototype development6. Design review7. Market test8. Product introduction9. Follow-up evaluation

4-16

Reverse Engineering

Reverse engineering is thedismantling and inspecting of a competitor’s product to discover product improvements.

4-17

Manufacturability

• Manufacturability is the ease of fabrication and/or assembly which is important for:– Cost

– Productivity

– Quality

4-18

Concurrent Engineering

Concurrent engineering is the bringing together of engineering design and manufacturing personnel early in the design phase.

4-19

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

4-20

• Design for manufacturing (DFM)• Design for assembly (DFA)• Design for recycling (DFR)• Remanufacturing• Design for disassembly (DFD)• Robust design

Product design

4-21

• Quality Function Deployment– Voice of the customer– House of quality

Quality Function Deployment

QFD: An approach that integrates the “voice of the customer” into the product and service development process.

4-22

The House of Quality

Correlation matrix

Designrequirements

Customerrequire-ments

Competitiveassessment

Relationshipmatrix

Specificationsor

target values

Figure 4.3

4-23

Customer Requirements

Importance to Cust.Easy to close

Stays open on a hill

Easy to open

Doesn’t leak in rain

No road noise

Importance weighting

Engineering Characteristics

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10 6 6 9 2 3

7

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X

X

X

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Correlation:Strong positivePositiveNegativeStrong negative

X*Competitive evaluation

X = UsA = Comp. AB = Comp. B(5 is best)

1 2 3 4 5

X AB

X AB

XAB

A X B

X A B

Relationships:Strong = 9Medium = 3Small = 1Target values

Red

uce

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Red

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House of Quality ExampleFigure 4.4

4-24

Kano Model

Customer Needs

Cu

sto

mer

Sati

sfa

cti

on

Excitement

Expected

Must Have

The Kano ModelFigure 4.5

4-25

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• Product bundle

– The combination of goods and services provided to a customer

• Service package– The physical resources needed to perform the

service

4-26

• Tangible – intangible• Services created and delivered at the same time• Services cannot be inventoried• Services highly visible to customers• Services have low barrier to entry• Location important to service• Range of service systems• Demand variability

Differences Between Product and Service Design

4-27

Service Design

• Service is mainly selling experience along with the product

• Service Concept• Service delivery

– Facilities– Processes– Skills

Market

Operations

Narrow range of services

Service concept

Focused operations for a narrow market

Market

Operations

Narrow range of services

Service concept

Focused operations for a wide market

Market

Operations

Wide range of services

Service concept

Unfocused operations for a narrow market

Market

Operations

Wide range of services

Service concept

Unfocused operations for a wide market

Number of markets served

Few

Many

Narrow WideRange of services

Service focused Unfocused – everything for

everyone

Market focusedService and market

focused

Four service concepts Source: Adapted from Johnston (1999). Reprinted by permission of Taylor & Francis, www.tandf.co.uk/journals.

Achieving focus by splitting the business

Market

Service concept

Operations

Encounter focus

4-35

Service Design

• Service design involves– The physical resources needed– The goods that are purchased or consumed by

the customer– Explicit services– Implicit services

4-36

Service Systems

• Design of Service systems is mainly influenced by high degree of customer contact such as:– Insulated technical core (software development)– Production line (automatic car wash)– Personalized service (hair cut, medical service)– Consumer participation (diet program)– Self service (supermarket)

4-37

Phases in Service Design

1.Conceptualize2.Identify service package components3.Determine performance specifications4.Translate performance specifications into

design specifications5.Translate design specifications into delivery

specifications

4-38

Service Blueprinting

• Service blueprinting– A method used in service design to describe and

analyze a proposed service• A useful tool for making Service Delivery

effective

4-39

Major Steps in Service Blueprinting

1. Establish Service Focus2. Identify sequence of customer interactions

• Prepare a flowchart

3. Develop time estimates4. Identify potential failure points

4-40

Characteristics of Well Designed Service Systems

1. Consistent with the organization mission2. User friendly3. Robust4. Easy to sustain5. Cost effective6. Value to customers7. Effective linkages between back operations8. Single unifying theme9. Ensure reliability and high quality

4-41

Guidelines for Successful Service Design1. Define the service package2. Focus on customer’s perspective3. Make sure that managers are involved4. Define quality for tangible and intangibles5. Make sure that recruitment, training and rewards are

consistent with service expectations6. Establish procedures to handle exceptions7. Establish systems to monitor service