Chapter 3

Product and Service Design

Instructor: Dao Minh Anh (PhD.)

 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.
 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.
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Some important factors to
consider when designing
products and services

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 What are the key questions in
product and service design?
From the organization’s standpoint, the key
questions are:
▪ Is there demand for it? What is the potential
size of the market, and what is the expected
demand profile (will demand be long term or
short term, will it grow slowly or quickly?

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 What are the key questions in
product and service design?
▪ Can we do it? Do we have the necessary
knowledge, skills, equipment, capacity, and
supply chain capability?

▪ For products, this is known as

manufacturability

▪ For services, this is know as serviceability.

▪ Also, is outsourcing some or all of the work an

option? 4-7
 What are the key questions in
product and service design?
▪ What level of quality is appropriate? What do
customers expect? What level of quality do
competitors provide for similar items? How
would it fit with our current offerings?

▪ Does it make sense from an economic

standpoint? What are potential liability
issues, ethical considerations, sustainability,
costs, and profits?
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 Product and Service Design

▪ Major factors in design strategy

▪ Cost
▪ Quality
▪ Time-to-market
▪ Customer satisfaction
▪ Competitive advantage

Product and service design/redesign should be

closely tied to an organization’s strategy
 Reasons for Product or Service Design

▪ Driven by mkt opportunities and threats.

▪ Factors that affect market opportunities and threats:
▪ Economic: low demand, need to reduce costs
▪ Social and demographic: populations shifts
▪ Political, liability, or legal: regulation changes
▪ Competitive: new products by competitors
▪ Cost or availability: raw materials, labor
▪ Technological: in product components/processes
 Objectives of Product and
Service Design
▪ Main focus
▪ Customer satisfaction
▪ Understand what the customer wants (mktg)
▪ Secondary focus
▪ Function of product/service
▪ Cost/profit
▪ Quality
▪ Appearance
▪ Ease of production/assembly
▪ Ease of maintenance/service
Braun’s Product Design

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 Braun’s Product Design
Dieter Rams 10 Principles of “Good Design”
1. Innovative
2. Useful
3. Aesthetic
4. Understandable
5. Unobtrusive
6. Honest
7. Long-lasting
8. Thorough down to the last detail
9. Environmental friendly
10. As little design as possible
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 Product or Service Design Activities

1. Translate customer wants and needs into

product and service requirements (mkg, ops)
2. Refine existing products and services (mkg)
3. Develop new products and services (mkg, ops)
4. Formulate quality goals (mkg, ops)
5. Formulate cost targets (acct, fin, ops)
6. Construct and test prototypes (ops, mkg, eng)
7. Document specifications
Steps in Design Thinking
 Power of Design Thinking

Make others successful

Embrace ambiguity

Talk less, do more

Learn from failure

Take ownership

Collaborate

Be optimistic

Source:IDEO
 Empathy
Walk a Mile in Their Shoes

Personally experience the customer’s perspective

Seeing what people really do, not just what they say

Understanding why people say what they say

Empathy
Empathy Using The Five
Why’s
Applying The 5 Why’s
Empathy map
The Gift Giving Experience
 Value Analysis
▪ An examination of the function of parts and materials in an
effort to reduce cost or improve the performance of a
product.
▪ Typical questions for the analysis:
▪ Could a cheaper part or material be used?
▪ Is the function necessary?
▪ Can the function of two or more parts be performed by a single part
for a lower cost?
▪ Can a part be simplified?
▪ Could product specifications be relaxed, and would this result in a
lower price?
▪ Could standard parts be substituted or non-standard parts?
 Legal, Ethical, and Environmental
Issues
▪ Legal
▪ FDA (Food & Drug Admin), OSHA (Occupational Safety &
Health Admin)
▪ Product liability: responsibility for injuries by faulty items
▪ Uniform Commercial Code: implied warranties by laws for
merchantability and fitness for intended purposes.
▪ Ethical
▪ Releasing products with defects and potential hazards
▪ Time constraint in design may require ethical decisions
with trade-offs
▪ Environmental
▪ EPA (Environ. Protection Agency)
Designers Adhere to Guidelines
▪ Produce designs that are consistent with
the goals of the company – Don’t cut
corners to save cost!
▪ Give customers the value they expect
▪ Make health and safety a primary
concern
▪ Consider potential harm to the
environment
 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
 Life Cycles of Products or Services
Figure 4.1 (Exceptions for commodities like paper clips, knives,
spoons, etc.)
 Standardization
▪ Standardization
▪ Extent to which there is an absence of
variety in a product, service or process, e.g.
calculators, automatic car-wash
▪ Standardized products are:
▪ Immediately available to customers
▪ Interchangeable parts
▪ E.g. GM’s standardization on key
components (brakes, electrical systems)
Standardization

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 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
▪ Orders fillable from inventory
▪ Opportunities for long production runs and automation
▪ 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.
 Mass Customization
• Mass customization:
▪ A strategy of producing basically standardized
goods or services, but incorporating some degree
of customization
▪ Tactic #1: Delayed differentiation (or
“postponement” - not quite completing production
until customer preferences are known, e.g. HP
printers-A/C, manuals)
▪ Tactic #2: Modular design (component parts are
grouped into modules that are easily
interchanged, e.g. PCs with replaceable
peripherals )
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 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
 Reverse Engineering

Reverse engineering
→Dismantling and inspecting a
competitor’s product to discover
product improvements
 Product design

▪ Design for manufacturing (DFM)

▪ Design for assembly (DFA)
▪ Design for recycling (DFR)
▪ Design for disassembly (DFD)
▪ for Remanufacturing
▪ Robust design:
▪ to make products/services that can function
over a broad range of conditions
 Manufacturability
▪ Manufacturability is the ease of fabrication
and/or assembly which is important for:
▪ Cost
▪ Productivity
▪ Quality

▪ Design For Manufacturing/Assembly:

▪ DFM or DFA
 Designing for Manufacturing (DFM)
“Beyond the overall objective to achieve
customer satisfaction while making a
reasonable profit”
- The designers’ consideration of the
organization’s manufacturing capabilities
when designing a product.
- The more general term design for
operations (DFO) encompasses services as
well as manufacturing
 Designing For Operations (DFO)
▪ Taking into account the operational
capabilities of the organization in
designing goods and services.
▪ Failure to take this into account can:
▪ Reduce productivity
▪ Reduce quality
▪ Increase costs
 “Over the Wall” Approach vs
Concurrent Engineering

New
Product

Mfg Design

43
Concurrent Engineering
Concurrent engineering:
→ Bringing together product design
and manufacturing engineering
people early in the design phase to
simultaneously develop the
product/processes
→ “over-the-wall” approach
→ Breaking the traditional “us vs.
them” mentality
 Computer-Aided Design

▪ Computer-Aided Design (CAD) is product

design using computer graphics.
▪ increases productivity of designers, 3 to 10
times → can easily modify, rotate, view cross
sections, print, etc.
▪ creates a database for manufacturing
information on product specifications
▪ provides possibility of engineering and cost
analysis on proposed designs, e.g. virtual
stress test
 Remanufacturing
▪ Remanufacturing: Refurbishing used products by
replacing worn-out or defective components.
▪ Remanufactured products can be sold for 50% of the
cost of a new product
▪ Remanufacturing can use unskilled/semiskilled labor
▪ Some governments require manufacturers to take back
used products
▪ Apps: automobiles, printers/copiers, cameras, PCs
▪ Xerox, Kodak, and Caterpillar Inc. are the leaders
(p139)
▪ Design for Disassembly (DFD): Designing
products so that they can be easily taken apart.
 Component Commonality
▪ Multiple products or product families that
have a high degree of similarity can share
components (narrower concept to
standardization)
▪ Automakers using internal parts
▪ Engines and transmissions
▪ Water pumps
▪ Etc.
▪ Other benefits
▪ Reduced training for assemble and installation
▪ Reduced repair time and costs
 Quality Function Deployment

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

Main tool: House of quality

The House of Quality
 House of Quality Example
Correlation:
X Strong positive
Positive
X X
X
X Negative
X
* Strong negative

Water resistance
Accoust. Trans.
Energy needed
Energy needed
Engineering

to close door

to open door
Check force
Competitive evaluation

resistance
Door seal
Characteristics
X = Us

Window
on level
ground
A = Comp. A
B = Comp. B
Customer (5 is best)
Requirements 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill 5 X AB

Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Importance weighting 10 6 6 9 2 3 Relationships:

level to 7.5 ft/lb

Strong = 9
Reduce energy

Reduce energy
Reduce force
current level

current level
current level
Medium = 3
Target values to 7.5 ft/lb.
Maintain

Maintain
Maintain
Small = 1
to 9 lb.

5 BA BA
B B BXA
4 X B X
Technical evaluation A A X
3
(5 is best) 2 X A
X
1
 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
▪ Service package
▪ The physical resources needed to perform
the service, the accompanying goods, and
explicit/implicit services
 Service Design

▪ Service design involves

▪ The physical resources needed
▪ The goods that are purchased or consumed
by the customer
▪ Explicit services: essential/core feature, e.g.
tax preparation, medical examination
▪ Implicit services: ancillary/extra feature, e.g.
friendliness, courtesy
 Differences Between Product
and Service Design
▪ Tangible vs. 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 (coming)
▪ Demand variability (coming)
 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)
▪ Example: Chase Banking Service Design
Matrix (Video clip)
 Service-System Design Matrix
Degree of customer/server contact
Buffered Permeable Reactive
High core (none) system (some) system (much) Low
Face-to-face
total
customization
Face-to-face
Sales loose specs Production
Face-to-face
Opportunity Efficiency
tight specs
Phone
Internet & Contact
on-site
Mail contacttechnology

Low High
 Service Demand Variability
▪ Demand variability creates waiting lines and idle
service resources
▪ Customer participation makes quality and demand
variability hard to manage
▪ Service design perspectives may have trade-offs
between the two:
▪ Cost and efficiency perspective (“product design
approach” to service design) or
▪ Customer perspective
▪ Attempts to achieve high efficiency may
depersonalize service and change customer’s
perception of quality, e.g. reducing consumer
choice by standardizing or bundling as in Cable TV
 Phases in Service Design

1.Conceptualize
2.Identify service package components
3.Determine performance specifications
4.Translate performance specifications
into design specifications
5.Translate design specifications into
delivery specifications
 Characteristics of Well Designed
Service Systems
1. Consistent with the organization mission
2. User friendly
3. Robust if variability is a factor
4. Easy to sustain
5. Cost effective
6. Having value that is obvious to customers
7. Effective linkages between back-of-the-house
ops. and front-of-the-house ops.
8. Single unifying theme: convenience or speed
9. Design need to ensure reliability and high quality
 Guidelines for Successful Service
Design
1. Define the service package
2. Focus on customer’s perspective
3. Consider image of the service package
4. Recognize that designer’s perspective is different
from the customer’s perspective
5. Make sure that managers are involved in
implementation
6. Define quality for tangible and intangibles
7. Make sure that recruitment, training and rewards
are consistent with service expectations
8. Establish procedures to handle exceptions
9. Establish systems to monitor service
 Group Homework
▪ Evaluate any product design using Dieter
Rams’10 golden rules?
▪ Do you think that we can use them to
evaluate a service design? Which rules are
suitable? Choose 01 service that you are
interested in and analyze it based on those
rules you chose.

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 GROUP WORK
▪ You are going to open a new business line. Your
potential customers are pupils or students from primary
schools to universities.
▪ Design and construct a prototype of a school bag/
backpack to meet one of your potential customers’
needs and wants, using Product and Service Design
Activities and Product Development Process.
Remember: Customer’s experience is the first!
▪ Set up the quality goals and cost of the product (Costs
of material are provided in advance)
▪ Evaluate the prototype and do market test

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 GROUP WORK
▪ PHASE 1: Your group of 6 is divided into 2 subgroups:
▪ 3 customers;
▪ 3 market researchers.
Try to gain deeper understanding of customers’ needs,
wants; and experience.
▪ PHASE 2: All members work together as managers in
the org. (concurrent engineering) for designing a
product
▪ PHASE 3: Construct a prototype (whatever you want it
to be). Consider quality and cost goals.
▪ PHASE 4: Test and evaluate the prototype.

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 GROUP WORK
MARKET TEST
▪ Each group has 3-5 minutes to introduce
your product to the market.
▪ Each group assigns one person to be a
customer and rate which product he/she likes
most.
▪ The most favorite product will bring more
credit to your group!!!!

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 GROUP WORK
▪ Presentation
▪ Each group has 10-15 minutes to introduce the
product.
▪ Your group has to introduce your product,
potential customers, costs and profit (if possible).
▪ Assessment
▪ 2 members from other groups act as customer to
evaluate and grade the product.
▪ The best product will contribute more credit to
final score of each group.
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 What do you need after this
chapter?
▪ 1. The reasons, trends, and objectives of Product
and Service Design.
▪ 2. The Design Process (Designing for mass
customization, reliability, robust design, etc.).
▪ 3. Research and Development.
▪ 4. Standardization.
▪ 5. Product Design (concurrent engineering,
computer aided design, remanufacturing).
▪ 6. Service Design.
▪ 7. Quality Function Deployment.
▪ 8. Operations Strategy.
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