PRODUCT AND

SERVICE DESIGN
 Customer Satisfaction begins with product and
service design. Moreover, decisions are made in
this area that impact operations and the
organization’s overall success.
 Process selection and capacity planning
impact the ability of the product system
to deform and to satisfy customers.
Flexibility, Production time, and cost are
key considerations in process design.
 Processselection and layout are closely related.
Layout decisions are influenced by decisions
made in product and service design.
 Work design focuses on the human element in
production systems. Increasingly, managers are
realizing that workers are a valuable asset and
can contribute greatly to the organization’s
success. Strategic planning is beginning to
incorporate employee participation to help
improve production systems.
WHAT DOES PRODUCT
AND SERVICE DESIGN
DO?
WHAT DOES PRODUCT AND
SERVICE DESIGN DO?
 The various activities and responsibilities of
product and service design include the
following (functional interactions are shown
in parenthesis)
 1.
Translation customer wants and needs, into
product and service requirements. (marketing,
operation)
 2.
Refine existing product and services.
(marketing)
 3.
Develop new product and services.
(marketing)
 4.
Formulate quality goods. (marketing,
operation)
 5.Formulate cost targets. (accounting,
finance, operations)
 6.
Construct and test prototypes.
(operations, marketing, engineering)
 7. Document specifications.
Reasons for Product
and Service Design or
Redesign
 Productand service design has typically had
strategic implications for the success and
prosperity of an organization. Furthermore, it
has an impact on future activities.
 Consequently, decisions in this area are some
of the most fundamental that managers must
make.
 Organizations become involved in
product and service design or redesign
for a variety of reasons. The main forces
that initiate design or redesign are
market opportunities and threats.
 Thefactors that give rise to market opportunities
and threats can be one or more changes in:

 ECONOMIC (Low demand; excessive warranty

claim; the need to reduce cost)
 SOCIAL AND DEMOGRAPHIC (aging baby
bloomers; population shifts)
 POLITICAL, LIABILITY OR LEGAL (government
changes; safety issues; new regulations)
 COMPETITIVE (new or changed products or services;
new advertising/ promotion)
 COSTOR AVAILABILITY (of raw materials;
components; labour)
 TECHNOLOGICAL (in product component process)

 While
each of these factors may seem obvious, in
technological part a need to create a faster, smaller
microprocessor that spawns a new generation of
personal digital assistants or cell phones. Advances
may require altering existing products.
EXAMPLE OF A NEW
PRODUCT DESIGN
Dutch Boy Paint Containers
OBJECTIVES OF PRODUCT
AND SERVICE DESIGN
 The main focus of product and service design
is customers satisfaction. Hence, it is
essential for designers to understand what the
customer wants and design with that in mind.
Marketing is the primary source of this
information
 These typically include development time and
cost, and the resulting product or service
quality. Quality, is high on the list of priorities
in product and service design, having high
quality was enough for a product or service to
stand out; now it is the norm, and product
and service that fall below this norm are the
ones that stand out.
For many electronic product, “high
tech” appearance is a design factor.
LEGAL, ETHICAL
AND
ENVIRONMENTAL
ISSUES
 Designers must be careful to take into
account a wide array of legal and ethical
considerations. Moreover, if there is a
potential to harm the environment, then those
issues become important.
 Mostorganizations have numerous
government agencies that regulate them.
 Among the more familiar federal agencies are
the Bureau of Food and Drug, the
Occupational Health and Safety
Administrations, the DENR and various local
 Organizations generally want designers to
adhere to guidelines such as the following:

 Product designs that are consistent with the

goals of organizations.
 Give customers the value they expect.
 Make health and safety a primary concern.
 Consider potential to harm the environment
OTHER ISSUES IN
PRODUCT AND SERVICE
DESIGN
 1. Life Cycles - is the stages through which a product
or its category bypass.
 2.Standardization – the extent to which there is
absence of variety in a product, services or process.
 2.1 Mass customization – a strategy of producing
standardized goods or services, but incorporating some
degree of customization in the final product or services.
 2.2delayed differentiation – the process of
producing but not quite completing.
 2.3modular design – modules represent groupings of
component parts into subassemblies.
 3. Reliability – is a measure of the ability of a
product, a prt, a service, or an entire system to
perform its intended function under a prescribed set
of conditions.
 4.Robust Design – also called the Taguchi Method,
greatly improves engineering productivity. By
consciously consideringthe noise factors
(environmental variation during the product’s usage,
manufacturing variation, and component
deterioration) and the cost of failure in the field the
Robust Design method helps ensure customer
satisfaction.
 5. The degree of newness – products or
service design changes can range from the
modification of an existing product or service
to an entirely new product or service.
 Modification of an existing product or service.
 Expansion of an existing product line or
service offering.
 A clone of a competitor’s product or service.
 New product or service.
 6.Cultural Differences – products design in
companies that operate globally also must
take into account any cultural differences of a
different countries or regions related to the
product.
 7.
Global Product Design – development could
be a more sustainable solution; as a part of
Globalization.
PHASES IN PRODUCT
DESIGN AND
DEVELOPMENT
1. Idea Generator
– product
development
begins with ideas.
 2.Feasibility analysis – entail market analysis
(demand), economic analysis (development cost
and production cost, profit potential), and
technical analysis (capacity requirements and
availability, and the skills needed), can answer
the question “Does it fit with the mission?”
 3.Product
Specifications-
involves detailed
descriptions of what
is needed to meet
(or exceed)
customer wants, and
requires
collaboration
between legal,
marketing and
operations.
 4.Process specifications – alternatives must
be weighed in terms of cost, availability of
resources, profit potential, and quality.
 5.Prototype development – units are made
to see if there are any problems with the
product or process specifications.
 6.
Design review- making any necessary
changes, or abandoning.
 7.Market test – used to determine the extent
of consumer acceptance.
 8.
Production introduction – promoting the
product.
 9.
Follow- up evaluation – determine if
changes are needed, and refining forecasts
SERVICE
DESIGN
 Service- refers to an act, something that is
done for the customers.
 Service delivery systems. The facilities,
processes; and skills needed to provides
service.
 Product bundle. The combination of goods
and services provided to a customer.
 Service Package. The physical resources
needed to perform the service, the
accompanying goods, and the explicit and
implicit services needed.
Overview of Service Design

Service design begins with the

choice of a service strategy, which
determines and focus on the
service, and the target market.
Differences Between Service
Design and Product Design
 Service Operations managers must
contend with issues that may be
insignificant or non-existent for
managers in a production setting. These
includes the following:
 1.
Products are generally tangible; services
are generally intangible.
 2.
Oftentimes services can be created and at
the same time delivered. (haircut; carwash)
 3. Services cannot be inventoried.
 4.
Services are highly visible to the customers
and must be designed with that in mind. (spa)
 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 system range from those with
little or so customer contact to those
that have a very high degree of
customer contact.
8. Demand variability alternately creates
waiting lines, or idle service resources.
PHASES IN THE
SERVICE DESIGN
PROCESS
 1. Service blue printing – a method used in a
service design to describe and analyse a
proposed service.
 2. Characteristics of a well-designed service
system
 being consistent with the organization
mission.
 Being user friendly.
 Being robust of variability is a factor.
 Being easy to sustain

3. Challenges of service design –
service design presents some special
challenges that are less likely to be
encountered in product design, in
part, because service design also
involves design of the delivery
system.
Reference:

 Operations Management 9th edition; pp. 123-157

By William J. Stevenson
Presented by:

Kathlyn Mae G. Corral