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Product AND Service Design new
operations management (Koforidua Polytechnic)
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UNIT 2
PRODUCT AND SERVICE DESIGN
Customer Satisfaction begins with product and service design. Moreover, decisions are made in
this area 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.
Process selection 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.
Design decisions have strategic significance for business organizations. Many of these decisions
are not made by the operations manager.
Nonetheless, because of the important links between operations and each strategic area, it is
essential to the success of the organizations to involve all of the functional area of the
organization in design decisions.
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. Translate customer wants and needs, into product and service requirements.
(marketing, operation)
2.
Refine existing product and services. (marketing)
3. Develop new product and/or services.
(marketing, Operations)
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
Product and service design has typically had strategic implications for the success and prosperity
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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.
The factors 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)


COST OR AVAILABILITY (of raw materials; components; labour)
TECHNOLOGICAL (in product component processes)
While each of these factors may seem obvious, in technological part a need to create an
faster, smaller microprocessor that spawns a new generation of personal digital assistants or
cell phones. Advances may require altering existing products.
OBJECTIVES OF PRODUCT AND SERVICE DESIGN
The main focus of product and service design is customer 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.
It is important to note that although profit is generally the overall measure of design
effectiveness, because the time interval between the design phase and profit realization is
often considerable.
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.
Most organizations 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 agencies and NGOs.
Organizations generally want designers to adhere to guidelines such as the following:
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
Produce 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.
2.2. delayed differentiation- the process of producing but not quite completing.
2.3. modular design- modules represent groupings of component parts into subassemblies.
3. Reliability- is a measure of the ability of a product, a part, 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 considering the 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 change can range from the
modification of an existing product or service to an entirely new product or service.
o
Modification of an existing product or service.
o
Expansion of an existing product line or service offering.
o
A clone of a competitor’s product or service.
o
New product or service.
6. Cultural differences- products design in companies that operate globally also must take into
account any cultural differences of different countries or regions related to the product,
7. Global Product design- are 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.
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2.
3.
Feasibility analysis- entail market nalysis(demand), economic analysis(development cost
and production cost, profit potential), and technical analysis(capacity requirements and
availability, and the skills needed), cn answer the question “Does it fit with the mission?”
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.
6.
Prototype development- units are made to see if there are any problems with the product
or process specifications.
Design review- making any necessary changes, or abandoning.
7.
Market test- used to determine the extent of consumer acceptance.
8.
9.
Production introduction- promoting the product.
Follow-up evaluation- determining if changes are needed, and refining forecasts.
SERVICE DESIGN
Service. refers to an act, something that is done for the customers.
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, 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 nonexistent 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)
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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 no 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 well-designed service system
 Being consistent with the organization mission.
 Being user friendly.
 Being robust of variability is a factor.
 Being easy to sustain
 Being cost- effective.
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.
1.
GUIDELINES FOR SUCCESSFUL SERVICE DESIGN
Define the service package in detail.
2.
Focus on the operation from the customer perspective.
3.
4.
Consider the image that the service package will present.
Recognize the designer familiarity with the system.
5.
Make sure that managers are involved and will support the design once it is
implemented.
Define quality for both tangible and intangibles.
6.
7.
Make sure that recruitment, training and reward policies are consistent with service
expectations.
8.
Established procedures to handle both predictable and unpredictable events.
9.
Establish systems to monitor, maintain and improve service
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OPERATION STRATEGY
Product and service design is a futile area for achieving competitive satisfaction. Potential
sources of such benefits include the following:
1.
Increasing emphasis on component commonality.
2.
Packaging products and ancillary service to increase sales.
3.
Using multiple-use platforms. Implementing tactics that will achieve the benefits
of high volume while satisfying customer needs.
4.
Continually monitoring products and service for small improvements.
5.
Shorten the time it takes to get new or redesign goods and services to the markets.
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