Spice Giant McCormick
Demand for
traditional spices going down
Adeyl Khan, Faculty, BBA, NSU
Product and Service Design
Strategy- Major
Factors
•
•
•
•
Cost
Quality
Time-to-market
Customer
satisfaction
• Competitive
advantage
Organization’s
strategy
Adeyl Khan, Faculty, BBA, NSU
Why bother?
• Economic
• Social and
demographic
• Political, liability, or
legal
• Competitive
• Cost or availability
• Technological
4-2
Product or Service Design Activities
 Translate customer wants and needs into product
and service requirements
 Refine existing products and services
 Develop new products and services
 Formulate quality goals
 Formulate cost targets
 Construct and test prototypes
 Document specifications
Adeyl Khan, Faculty, BBA, NSU
4-3
Objectives of P/S Design
Main focus
• Customer satisfaction
• Understand what the customer wants
Secondary focus
•
•
•
•
•
•
Function of product/service
Cost/profit
Quality
Appearance
Ease of production/assembly
Ease of maintenance/service
Adeyl Khan, Faculty, BBA, NSU
Designing For
Operations
• Capabilities?
•Productivity, quality, costs!
4-4
Legal, Ethical, and Environmental Issues
Legal
• FDA, OSHA, IRS
• Product liability
• Uniform commercial code
Ethical
• Releasing products with defects
Environmental
 Product Liability
- A manufacturer
is liable for any
injuries or
damages caused
by a faulty
product.
 Uniform
Commercial Code
- Products carry
an implication of
merchantability
and fitness.
• EPA
Adeyl Khan, Faculty, BBA, NSU
4-5
Other Issues in P/S Design
Product/service
life cycles
Product/service
reliability
How much
standardization
Mass
customization
Robust design
Degree of
newness
Cultural
differences
Adeyl Khan, Faculty, BBA, NSU
4-6
Figure 4.1
Life Cycles of Products or Services
Saturation
Demand
Maturity
Decline
Growth
Introduction
Time
Adeyl Khan, Faculty, BBA, NSU
4-7
Standardization- an absence of variety
Advantages
Disadvantages
• Fewer parts for inventory &
manufacturing
• Reduced Design
effort/costs
• Reduced training
effort/costs
• Consistent processespurchasing, handling
• Consistent Quality
• Longer production
runs/automation
• More resource for design
• 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.
Adeyl Khan, Faculty, BBA, NSU
4-8
Mass customization
A strategy of producing
standardized goods or
services, but
incorporating some
degree of customization


Delayed differentiation
Modular design
Delayed Differentiation
• Delayed differentiation is a
postponement tactic
• Producing but not quite
completing a product or service
until customer preferences or
specifications are known
Modular Design
• Component parts are subdivided
into modules
• easier repair, replacement/
interchange, diagnosis and
remedy of failures
• simplification of manufacturing
and assembly
Adeyl Khan, Faculty, BBA, NSU
4-9
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
Adeyl Khan, Faculty, BBA, NSU
4-10
Improving Reliability
 Component design
 Production/assembly techniques
 Testing
 Redundancy/backup
 Preventive maintenance procedures
 User education
 System design
Adeyl Khan, Faculty, BBA, NSU
4-11
Robust Design
 Design that results in
products or services
that can function over
a broad range of
conditions
Adeyl Khan, Faculty, BBA, NSU
Taguchi Approach
• Design a robust product
• Insensitive to
environmental factors
either in manufacturing or
in use.
• Central feature is Parameter
Design.
• Determines:
• factors that are controllable
and those not controllable
• their optimal levels relative
to major product advances
4-12
Degree of Newness
•
•
•
•
Modification of an existing product/service
Expansion of an existing product/service
Clone of a competitor’s product/service
New product/service
Degree of Design Change
Type of Design
Change
Newness of the
organization
Newness to the
market
Modification
Low
Low
Expansion
Low
Low
Clone
High
Low
New
High
High
Adeyl Khan, Faculty, BBA, NSU
Table 4.3
4-13
Cultural Differences
 Multinational companies must take into account
cultural differences related to the product design.
 Notable failures:
 International House of Pancakes- IHOP in
Bangladesh
 Ikea beds in U.S.
Adeyl Khan, Faculty, BBA, NSU
4-14
Global Product Design- Virtual teams
 Uses combined efforts of a team of designers
working in different countries
 Provides a range of comparative advantages over
traditional teams such as:
 Engaging the best human resources around the world
 Possibly operating on a 24-hr basis
 Global customer needs assessment
 Global design can increase marketability
RMG
Adeyl Khan, Faculty, BBA, NSU
4-15
Phases in Product Development Process
Idea
generation
Feasibility
analysis
Product
specifications
Design review
Prototype
development
Process
specifications
Market test
Product
introduction
Follow-up
evaluation
Adeyl Khan, Faculty, BBA, NSU
4-16
Idea Generation
Reverse Engineering
• Supply chain based
• Competitor based
• Research based
• dismantling and
inspecting of a
competitor’s product to
discover product
improvements.
Adeyl Khan, Faculty, BBA, NSU
4-17
Research & Development (R&D)
 Organized efforts to increase scientific knowledge
or product innovation & may involve:
 Basic Research advances knowledge about a subject
without near-term expectations of commercial
applications.
 Applied Research achieves commercial applications.
 Development converts results of applied research
into commercial applications.
Adeyl Khan, Faculty, BBA, NSU
4-18
Manufacturability
 Manufacturability is the ease of fabrication and/or
assembly which is important for:
 Cost
 Productivity
 Quality
Adeyl Khan, Faculty, BBA, NSU
Designing for Manufacturing
• Beyond the overall objective to achieve
customer satisfaction while making a
reasonable profit is:
• Design for Manufacturing(DFM)
• The designers’ consideration of the
organization’s manufacturing
capabilities when designing a product.
• The more general term design for
operations encompasses services as
well as manufacturing
4-19
Concurrent
engineering
bringing together of engineering design and manufacturing
personnel early in the design phase.
ComputerAided
Design
(CAD)
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
Adeyl Khan, Faculty, BBA, NSU
4-20
Product design consideration
 Design for manufacturing (DFM)
 Design for assembly (DFA)
 Design for recycling (DFR)
 Remanufacturing
 Design for disassembly (DFD)
Adeyl Khan, Faculty, BBA, NSU
4-21
Recycling
recovering materials for future use
Cost savings
Environment concerns
Environment regulations
Remanufacturing:
Refurbishing used products by replacing worn-out or defective components.
Can be sold for 50% of the cost of a new producer
Remanufacturing can use unskilled labor
Some governments require manufacturers to take back used products
Consider Design for Disassembly (DFD)
Adeyl Khan, Faculty, BBA, NSU
4-22
Component Commonality
 Multiple products or product families that have a
high degree of similarity can share components
 Automakers using internal parts
 Engines and transmissions
 Water pumps
 Etc.
 Other benefits
 Reduced training for assemble and installation
 Reduced repair time and costs
Adeyl Khan, Faculty, BBA, NSU
4-23
Adeyl Khan, Faculty, BBA, NSU
24
The House of Quality
 Quality Function Deployment
 Voice of the customer
Correlation
matrix
Design
requirements
 House of quality
Customer
requirements
Relationship
matrix
Competitive
assessment
Specifications
or
target values
QFD:
An approach that integrates the “voice of the customer” into the product
and service development process.
4-25
Adeyl Khan, Faculty, BBA, NSU
Correlation:
Strong positive
X
Positive
X
X
Easy to close
7
Stays open on a hill
5
Easy to open
3
Doesn’t leak in rain
3
No road noise
2
Water resistance
*
Accoust. Trans.
Window
Energy needed
to open door
Check force on
level ground
Customer
Requirements
Door seal
resistance
Energy needed
to close door
Engineering
Characteristics
Negative
Strong negative
X
X
X
Competitive evaluation
X = Us
A = Comp. A
B = Comp. B
(5 is best)
1
2
3
4
5
AB
X
X AB
XAB
A XB
X A
Importance weighting
63
63
45
27
27
6
B
Relationships:
Technical evaluation
(5 is best)
Adeyl Khan, Faculty, BBA, NSU
5
4
3
2
1
B
A
X
BA
X
B
B
A
X
X
A
BXA
Maintain
current level
Maintain
current level
Reduce energy
to 7.5 ft/lb.
Reduce force
to 9 lb.
Target values
Maintain
current level
Reduce energy
level to 7.5 ft/lb
Strong = 9
Medium = 3
Small = 1
BA
X
Figure 4.4
4-26
The Kano Model of Customer Satisfaction
 Classifies product attributes based on how they are
perceived by customers and their effect on customer
satisfaction.
 Useful for guiding design decisions

When good is good enough, and when more is better.
Project activities :
• Identifying customer needs
• Determining functional
requirements
• Concept development
• Analyzing competitive
products
Adeyl Khan, Faculty, BBA, NSU
Other tools:
•
•
•
•
Eliciting Customer Input
Prioritization Matrices
Quality Function Deployment
Value Analysis
27
The Kano Model
A competitive
product meets basic
attributes, maximizes
performances
attributes, and
includes as many
“excitement” attributes
as possible at a cost
the market can bear.
high customer satisfaction
no dissatisfaction
* Cup Holders
customer satisfaction
* fuel economy
A) Satisfied
B) Neutral
C) Dissatisfied
Must haves- no
product differentiation
D) Don’t care
Adeyl Khan, Faculty, BBA, NSU
4-28
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
Adeyl Khan, Faculty, BBA, NSU
4-29
Service Design
 Service design involves
 The physical resources needed
 The goods that are purchased or consumed by the
customer


Explicit services
Implicit services
Explicit services
• The benefits that are readily observable by the senses and that consist of the essential
or intrinsic feature of the service. such as absence of pain after a tooth is repaired.
Implicit services
• psychological benefits that the customer may sense only vaguely, or the intrinsic
feature of the services. such as musician in a restaurant, cheerful flight attendant
Adeyl Khan, Faculty, BBA, NSU
4-30
Differences Between Product
and Service Design
 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
Adeyl Khan, Faculty, BBA, NSU
Ch- 1
4-31
Service Systems
 Service systems range from those with little or no
customer contact to very 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)
Adeyl Khan, Faculty, BBA, NSU
4-32
Service Demand Variability
 Demand variability creates waiting lines and idle
service resources
 Service design perspectives:
 Cost and efficiency perspective
 Customer perspective
 Customer participation makes quality and demand
variability hard to manage
 Attempts to achieve high efficiency may
depersonalize service and change customer’s
perception of quality
Adeyl Khan, Faculty, BBA, NSU
4-33
Phases in Service Design
Conceptualize
Identify service package components
Determine performance
specifications
Translate performance specifications
into design specifications
Translate design specifications into
delivery specifications
Adeyl Khan, Faculty, BBA, NSU
4-34
CONTACT PERSON
SUPPORT PROCESS (Back Stage) (On Stage)
CUSTOMER PHYSICAL
EVIDENCE
Overnight Hotel Stay
Hotel
Exterior
Parking
Arrive
at
Hotel
Cart for
Bags
Desk
Elevators Cart for
Registration Hallways Bags
Papers
Room
Lobby
Key
Give Bags
Check in
to
Bellperson
Go to
Room
Greet and
Process
Take
Registration
Bags
Adeyl Khan, Faculty, BBA, NSU
Receive
Bags
Room
Menu
Amenities
Bath
Sleep
Shower
Call
Room
Service
Deliver
Bags
Take Bags
to Room
Registration
System
Delivery
Food
Tray
Food
Appearance
Receive
Food
Deliver
Food
Eat
Bill
Desk
Lobby
Hotel
Exterior
Parking
Check out
and
Leave
Process
Check Out
Take
Food
Order
Prepare
Food
Registration
System
Service Blueprinting
 Service blueprinting
 A method used in service design to describe and
analyze a proposed service
 A useful tool for conceptualizing a service delivery
system
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Identify the
process to
be blueprinted.
Identify the
customer
or
customer
segment.
Map the
process
from the
customer’s
point of
view.
Map
contact
employee
actions,
onstage
and backstage.
Link
customer
and contact
person
activities to
needed
support
functions.
Add
evidence
of service
at each
customer
action
step.
Adeyl Khan, Faculty, BBA, NSU
4-36
Back Stage Processes
On Stage Journey
Evidence
Client
Steps
Energy
Provider Steps
Energy
Provider Steps
Backend
Applications
Adeyl Khan, Faculty, BBA, NSU
How will my energy meter help me use
energy more efficiently?
Receiving a home metering device to
measure personal energy
consumption
Basic customer steps and backstage
activities are mapped out
Back Stage Processes
On Stage Journey
Evidence
New Energy
meter arrives
Client Steps
Energy Provider
Steps
Follow meter
instructions
Energy
consumption
visualized
Conduct
normal
appliance
usage
Read
meter
Gee – how would
consumption
differ if I selected
“light” load for
my dishwasher?
Reduced
usage
Run
appliance
again
Read
meter
Install Meter, give
client instruction
package
Energy Provider
Steps
Backend
Applications
Adeyl Khan, Faculty, BBA, NSU
Push feedback of
use to meter in
home
Add readout to data base for
future analytics
Push feedback of
use to meter in
home
Characteristics of a good Service Systems
 Consistent with the organization mission
 User friendly
 Robust
 Easy to sustain
 Cost effective
Challenges of Service Design
•
•
•
•
Variable requirements
Difficult to describe
High customer contact
Service – customer encounter
 Value to customers
 Effective linkages between back operations
 Single unifying theme
 Ensure reliability and high quality
Adeyl Khan, Faculty, BBA, NSU
4-39
Guidelines for Successful Service Design
Define the service
package
Focus on customer’s
perspective
Consider image of the
service package
Define quality for
tangible and
intangibles
Make sure that
managers are involved
Recognize that
designer’s perspective is
different from the
customer’s perspective
Make sure that
recruitment, training
and rewards are
consistent with service
expectations
Establish procedures to
handle exceptions
Establish systems to
monitor service
Adeyl Khan, Faculty, BBA, NSU
4-40
Operations Strategy
 Increase emphasis on component commonality
 Package products and services
 Use multiple-use platforms
 Consider tactics for mass customization
 Look for continual improvement
 Shorten time to market
Shorten Time to Market
• Use standardized components
• Use technology
• Use concurrent engineering
Adeyl Khan, Faculty, BBA, NSU
4-41
Adeyl Khan, Faculty, BBA, NSU
42
Learning Objectives
 Explain the strategic importance of product and
service design.
 List some key reasons for design or redesign.
 Identify the main objectives of product and service
design.
 Discuss the importance of standardization.
 Discuss the importance of legal, ethical, and
environmental issues in product and service design.
Adeyl Khan, Faculty, BBA, NSU
4-43
Learning Objectives
 Briefly describe the phases in product design and
development.
 Describe some of the main sources of design ideas.
 Name several key issues in manufacturing design.
 Name several key issues in service design.
 Name the phases in service design.
 List the characteristics of well-designed service
systems.
 Name some of the challenges of service design.
Adeyl Khan, Faculty, BBA, NSU
4-44