DESIGN OF GOODS AND SERVICES

INTRODUCTION
- The design of goods and services play an important role in the degree to
which organizations are able to achieve its goals.
- It is a major factor in customer satisfaction, product and service quality, and
production cost.
- A key factor is manufacturability which refers to the ease with which the
design features can be achieved by production.
- Design affects costs the cost of materials specified by design and labor and
equipment costs.

REASONS FOR PRODUCT AND SERVICE DESIGN

- To be competitive by offering new product or service
- To make the business grow and increase profit
- To develop new products or services as an alternative to downsizing
- Developing new products or services can add jobs and retain people instead
of letting them go
- Sometimes, product and service design is actually redesign
- The desire to achieve cost reduction n labor or materials

TRENDS IN PRODUCT AND SERVICE DESIGN

- Increased emphasis on customer satisfaction and increased pressure to be
competitive
- Increased emphasis on reducing the time needed to introduce a new product
or service
- Increased emphasis on reducing the time needed to produce a product or
provide a service.
- Greater attention to the capabilities of the organization to produce or deliver
the item
- Greater attention to environmental concern, including waste minimization,
recycling parts, disposal or worn-out products and packaging
- Increased emphasis on designing products and service that is user-friendly

OBJECTIVES OF THE PRODUCT AND SERVICE DESIGN

- To satisfy the customer while making a reasonable profit
- Operations people must be involved early in the design process to ensure
that the design will be compatible with the organizations capabilities.
o To design a product or service that will meet or exceed customers
expectations within cost or budget, that takes into account the
capabilities or operations.

THE DESIGN PROCESS

- Motivation for design
- Ideas for new or improved designs
- Production capabilities
- Forecast or future demand

REGULATIONS AND LEGAL CONSIDERATIONS

- PRODUCT LIABILITY
a manufacturer is liable for any injuries or damages caused by a
faulty product because of poor workmanship or design
- UNIFORM COMMERCIAL CODE
Products carry an implication of merchantability and fitness; that is,
a product must be useable for its intended purpose

SAMSUNG GALAXY NOTE 7

- An engineering failure, it shows how important creating a good product is.
- Just one mistake could potentially bring down a multinational conglomerate
such as Samsung, costing them stock value and pole position in a very
competitive space
 - Clearly, a painful lesson to be learned: You can lose everything, but never
lose your reputation.

RESEARCH AND DEVELOPMENT

- It refers to the organized efforts that are directed toward increasing scientific
knowledge or product or processes innovation
- It may involve:
o Basic Research
o Applied Research
o Development
- Benefits of R&D
1. It can lead to patents, licensing and royalties
2. First to bring new products to the market
3. Higher prices because of temporary monopoly

GLOBALIZATIN AND MCDONALDS

- It is known and believed that McDonalds is the symbol of globalization
- It is a global phenomenon
- While many McDonalds restaurants around the world serve the signature
burger and their own spins on the Big Mac, many global outposts offer
completely different items. Many are specific to each countrys cuisines.
- With so many restaurants, McDonalds demand for resources will increase. As
one character of a modern world is the demand for good and efficient service,
McDonalds has contributed in giving greater access to global marketplace of
goods by its strong economic influence as they encourage many enterprises
to offer them different services in order to keep up with the demands of
people.

PRODUCT LIFE CYCLE

- May be any length from a few hours to decades
- The operations function must be able to introduce new products successfully

1. INTRODUCTION
o Fine tuning may warrant unusual expenses for
Research
Product Development
Process modification and enhancement
Supplier development
2. GROWTH
o Product design begins to stabilize
o Effective forecasting of capacity becomes necessary
o Adding or enhancing capacity may be necessary
3. MATURITY
o Competitors now established
o High volume, innovative production may be needed
o Improved cost control, reduction in options, paring down of product line
4. SATURATION
o Market becomes saturated which leads to a decline in demand
5. DECLINE
o Firms adopt defensive research posture whereby they attempt to
prolong the useful life of a product or service by redesigning it or
changing the packaging
o Unless product makes a special contribution to the organization, must
plan to terminate offering.

FOUR ASPECTS OF PRODUCT DESIGN

1. ROBUST DESIGN
- Product is designed so that small variations in production or assembly
do not adversely affect the product
- Typically results in lower cost and higher quality
- The design functions over a broad range of conditions
 - Taguchis Approach
o Approach created by Japanese Engineer Genichi Taguchi
o It is easier to design a product that is insensitive to
environmental factors than to control the environmental factors
o The central feature is the parameter design

2. MODULAR DESIGN
- Products designed in easily segmented components
- Adds flexibility to both production and marketing
- Improved ability to satisfy customer requirements
- Components are subdivided into modules that are easily replaced or
interchanged

Advantages:
- Failures are often easier to diagnose and remedy because there are
fewer pieces to investigate.
- Easy repair and replacement
- Involves simplification: fewer parts are involved, so purchasing and
inventory control become more routine, fabrication and assembly
operations become more standardized and training costs are often less
Disadvantages:
- Decrease in variety: the number of possible configurations of module is
much less than the number of possible configurations based on
individual components.
- Inability to disassemble a model in order to replace a faulty part: the
entire module must be scrapped usually a more costly procedure.

3. COMPUTER-AIDED DESIGN (CAD)

- Using computers to design products and prepare engineering
documentation
- Shorter development cycles, improved accuracy, lower cost
- Information and designs can be deployed worldwide

Benefits:
- Increase in productivity of designer because it eliminates laborious
preparation of mechanical drawings of products and easy to revise
repeatedly to correct errors or incorporate revisions.
- The creation of a database for manufacturing that can supply needed
information on product geometry and dimensions, tolerance, and
material specifications.

4. CONCURRENT ENGINEERING
- Bringing engineering design and manufacturing personnel together
early in the design phase to achieve smoother transition from product
design to production and to decrease product development time.

Advantages:
- Manufacturing personnel are able to identify production
capabilities and capacities
- Early opportunities for design procurement of critical tooling,
some of which might have long lead time
- Early consideration of the technical feasibility of a particular
design or a portion of a design to avoid serious problems during
production.
- More effective resource allocation
- The emphasis can be of problem resolution instead of conflict
resolution
 SERVICE DESIGN
o Service typically includes direct interaction with the customer
o Increased opportunity for customization
o Reduced productivity
o Cost and quality are still determined at the design stage
o Delay customization
o Modularization
o Reduce customer interaction, often through automation
o Service is an act. Something that is done to or for a customer.
o Service typically includes direct interaction with the customer
o Many services are bundled with products.
o Services design involves:
o The physical resources needed
o The goods that are purchased or consumed by the customer
o Explicit services
o Implicit services
o Service delivery system
o The facilities, processes, and skills needed to provide a service
o Product bundle
o The combination of goods and services provided to a customer
o Service package
o The physical resources needed to perform the service

SERVICE DELIVERY SYSTEM

I. SERVICE CULTURE. It is built on elements of leadership principles,
norms, work habits and vision, mission and values. Culture is the
set of overriding principles according to which management
controls, maintains and develops the social process that manifests
itself as delivery of service and gives value to customers. Once a
superior service delivery system and a realistic service concept
have been established, there is no other component as
fundamental to the long-term success of a service organization as
its culture.

II. SERVICE QUALITY. It includes strategies, processes and

performance management systems. The strategy and process
design is fundamental to the design of the overall service
management model. Helping the client fulfil their mission and
supporting them in the pursuit of their organizational purpose, must
be the foundation of any service provider partnership.

III. EMPLOYEE ENGAGEMENT. It includes employee attitude

activities, purpose driven leadership and HR processes. Even the
best designed processes and systems will only be effective if
carried out by people with higher engagement. Engagement is the
moderator between the design and the execution of the service
excellence model.

IV. CUSTOMER EXPERIENCE. It includes elements of customer

intelligence, account management and continuous improvements.
Perception is king and constantly evaluating how both customer
and end-user perceive service delivery is important for continuous
collaboration. Successful service delivery works on the basis that
the customer as a part of the creation and delivery of the service
and then designs processes built on that philosophy this is called
co-creation.

TWO KEY ISSUES IN SERVICE DESIGN

- Degree of variation in service requirement
- Degree of customer contact and customer involvement in the delivery system
 CUSTOMER PARTCIPATION IN THE DESIGN OF SERVICES

CUSTOMER
Customer participation in design such as pre-arranged funeral services or cosmetic surgery.

DESIGN DELIVERY

CUSTOMER in delivery such as stress test for cardiac exam or delivery of a baby
Customer participation

DESIGN DELIVERY

CUSTOMER

Customer participation in design and delivery such as counselling, college education, financial management o

DESIGN DELIVERY

- The lower the degree of customer contact and service requirement variability,
the more standardized the service can be.
- Service design with no contact and little or no processing variability is very
much like product design. Conversely, high variability and high customer
contact generally means the service must be highly customized.

PHASES OF 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

SERVICE BLUEPRINT
It is a method on service design to describe and analyze a proposed service.
The key element is flow chart of the service.

MAJOR STEPS IN SERVICE BLUEPRINT

Establish boundaries for the process and decide on the level of detail that will be
needed
Identify the steps involved and describe them. If this is an existing process, get
input from those who do it.
Prepare a flowchart of major process steps.
Identify potential failure points. Incorporate features that minimize the chances
of failures.
Establish a time frame of service executions and estimate of variability in
processing and time requirements.
Analyze profitability. Determine which factors can influence profitability
positively and negatively and determine how sensitive is these factors.

RELIABILITY
 It is the measure of the ability of a product, part or system to perform its
intended function under a prescribed set of conditions.
The importance of reliability is by its use by prospective buyers in comparing
alternatives and by sellers as one determinant of price.
It can also have impact on repeat sales that reflect on the image of the
product, and if too low, create legal implications.

THREE IMPORTANT ASPECTS OF RELIABILITY

1. Reliability as a Probability
2. Definition of Failure
3. Prescribed Operating Conditions

RELIABILITY AS A PROBABILITY
Item reliability of 90%
Means that the probability that it will function as intended is 90%, but it will
have a probability of 10% that it will fail.
Hence, it is expected that, on average that one for every 10 items will fail.
Similarly, on the average, once in every ten trials will fail
FAILURE
It is used to describe a situation in which a product, part or system does not
perform as intended. It is also includes instances that the items performance is
substandard of its functions in a way that it is not intended.

PRESCRIBED OPERATING CONDITION

Normal operating condition is the set of conditions under which an items
reliability is specified.
It includes load, temperature, and humidity ranges, operating procedures, and
maintenance schedules.
The failure of users to hold these conditions often results in premature failure
of parts or complete system.

QUANTIFYING RELIABILITY
Engineers and designers have a number of techniques at their disposal for
assessing the reliability of parts, products, or system.

PROBABILITY is used in two ways:

1. The probability that the product system will function
on any given trial.
2. The probability that the product or system will
function for a given length of time.