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Production and Operations Management

Synthesis Report:

Karl David Al-Shuwayer
Riangelli Exconde

Submitted to:
Dr. Maria Paz Timbol
Product and Service Design
This section or topic discusses what product and services designers do, the reasons
for design or redesign.

Major factors in design strategy

 Cost- is the value of money that has been used up to produce something or
deliver a service, and your profit
 Quality- The quality of a product or service refers to perception of the degree to
which the product or service meets the customer’s expectation.
 Time to market- or speed to market, is the length of time it takes from
a product being conceived until its being available for sale. It allows to measure
how much businesses can be innovative. It also give as knowledge about
launching the product in the right place and at the right time.
 Customer satisfaction- It comes down to how your customer experiences the
brand – and how that brand makes a person feel.
Example.. in restaurant when a person satisfied on the foods he/she ordered.
 Competitive Advantage- ability to produce a good or service more efficiently than
its competitors, which leads to greater profit.
Example.. Cellphones companies, they have that advantages to each specific
brand to be more competitive like; Oppo to Samsung, Samsung to Iphone.

Product or Service Design Activities

Questions like. Is there a demand for it? Can we do it, What level of quality is
appropriate? Does it make sense from an economic standpoint?
1. Translate customer wants
2. Refine existing products and services,
3. Develop new products and service
4. Formulate quality goals,
5. Formulate cost targets,
6. Construct and test prototypes
7. Document specifications

Reasons for Product or Service Design

1. Economic- The low of demand (the higher the price the lower quantity
demanded), if your product is in demand to the market.
2. Social and demographic- New generation and older generation differences
and population shifts.
Example. Fashion like rip jeans; before we don’t have this kind of style due to
the rise in technology.
3. Political, liability or legal- government changes, safety issues, new
Example. Toy company they have to make their product in fallowing
regulations for the safety of the costumer, like; there are products intended for
use by children under 3 years.
4. Competitive- we should be more competitive because new products are
upgraded every year, like; Cellphone. Also new services, new advertising and
5. Cost or availability- This is about the raw materials that you need, and other
designers need by producing their specific product to able to have the
availability of the product you are producing.
6. Technological- Product components and processes. Especially technological
evolution nowadays is very fast, so you need to adopt faster as a designer.
Example. Nokia - they didn’t want to give up the old design that they have, yet
Nokia failed to respond to the iPhone and the shifting consumer demand that
came with it.
Objectives of Product and Service Design
 Main Focus
 Customer satisfaction
 Secondary focus
 Function of product/service (involves obtaining, developing, and
improving the products.)
 Cost/profit (cost of the product and the profit you will get)
 Quality (standard quality of your customers, to meet their expectation.)
 Appearance (in agriculture commodities like fruits the good-looking
commodities have a higher price. also Packaging beautiful packaging
attracts costumers.

Idea Generation
1. Supply chain- to ensure that their supply chain is efficient and cost effective.
A supply chain is the collection of steps that a company takes to transform
raw materials into product. This is about the availability of your product to
customers, suppliers, distributors employees and maintenance repair
Example. If you are the supplier in repair shop they should have the
necessary parts so you should have stock to avoid material shortage.
2. Competitor- by studying a competitor’s product or services and how the
competitors operates with pricing policies, location strategies etc. For
improving their product.
It is also called Reverse Engineering
Example. Medicines branded to generic, and also cellphone companies, by
discovering and improvement of the products.
3. Research- is another source of ideas for new improved products or services.
Like research and development or (R.D)

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. (ex. in experimenting the
 Applied Research achieves commercial applications. (ex. is applying
the research that you get to achieve commercial application!)
 Development converts results of applied research into commercial
applications. (developing of your product by converting it etc.

Regulations & Legal Considerations

 Product Liability - A manufacturer is liable for any injuries or damages
caused by a faulty product. (ex…like in toy company if they have producing
faulty products) they must pay concomitant cost like the settlements cost,
reputation etc.
 Uniform Commercial Code - Products carry an implication of merchantability
and fitness. (ex. Medicine they must put papers that indicated have to use or
drink it, even some products like toys also.)

Designers Adhere to Guidelines

 Produce designs that are consistent with the goals of the company (ex. when
you are producing high quality products you should focus on producing that
standard by using same raw materials. Even in foods like; condense milk, ice
cream you should put same ingredient even your product is in demand for
customer expectation)
 Give customers the value they expect (to able to get the demand profile that
you want, because customer expectation is important.
 Make health and safety a primary concern (ex…safety of your employees
while producing your product to delivery personnel to customer use)
 Consider potential harm to the environment (ex in agricultural products like in
conventional farming resources. Also, the metal straw products.)

Human Factor
 Human factor issues often arise in the design of consumer products.
 Another issue for designers to take into account is adding new features
“Creeping featurism” to their products or services. (think about the needs
and wants of customers. (ex…cellphones like putting the on-off of the phone
at the back)
Cultural Factors
 Products designers in companies that operates globally also must take into
account any cultural differences of different countries regions related to the
products. This can result in different design for different countries or regions.
(ex…needs of different culture like in Saudi to Philippines foods and cultural
Global Product and Service Design
 Global product design, which uses the combined globally are discovering
advantages in global product design, which uses the combined efforts of a
team of designers who work in different countries. Such Virtual Teams can
provide a range of comparative advantages over traditional teams such as
engaging the best human resources from around the world without the need
to assemble them all in one place, and operating on a 24-hour basis,
thereby decreasing the time to market. (exchange ideas and also exchange
of raw materials and products.

Environmental Factors: Sustainability

Cradle to Grave assessment
 The assessment of environmental impact of a product or service throughout
its useful life. (This is about the waste of every stage while producing the
product not only in the end or disposal time.) focuses global warming, solid
waste generation, etc.

End-of-Life Programs
 Deal with products that have reached the end of their useful lives. (disposal,
the end of his useful life) Reduce the dumping or incineration of products like
in Electronics which may pose hazards to the environments.

The Three Rs: Reduce, Reuse, and Recycle

 Designers often reflect on three aspects of potential cost saving and reducing
environmental impact: reducing the use of materials through value analysis;
refurbishing and then reselling returned goods that are deemed to have
additional useful life, which is referred to as remanufacturing; and reclaiming
parts of unusable products for recycling
Reduce: Analysis
 Examination of the function of parts and materials to reduce cost and improve
product performance. (Think about the item is the item necessary, does it
have value, could it be eliminated? Like; old computers in a company.

Reuse: Remanufacturing
 Refurbishing used products by replacing worn-out or defective components
(reasons for this is, if you can be sold for about 50 % of the cost of a new
products) like in computers if it is okay to upgrade the applications instead of
buying new one.)
 Recycling is sometimes an important consideration for designers. Recycling
means recovering materials for future materials for future use.
Companies recycle for a variety of reasons, including
1. Cost Savings
2. Environmental concerns
3. Environmental regulations
(ex. disassembles a used product to recover the recyclable parts.)
Other Design Considerations

 Product and service life cycles

• From introductory stage to end of life of the product or service
 How much standardization
• Basic purpose of the design
 Product and service reliability
• Reliability in terms of its uses or functions
 Range of operating conditions
• Range of its functions and other uses

Life Cycles of Products or Services

There are 5 stages of life of product and service design
1. Introductory Stage - wherein the product is new and introduce for the first
time in the market.

Examples: Google Glass and Honest Bee

2. Growth Stage wherein the product is developing in the market and more
people are patronizing the product.
Examples: QR Code and Beep Card
3. Maturity Stage - wherein the product or service is well known and used or
avail now by most customers in the market
Examples: Smartphones and Grab
4. Saturation Stage - wherein the product or service is very evident and can
almost be seen anywhere
Examples: Tablets and Sari-sari Stores
5. Decline Stage is the stage where the product or service is facing its
obsolescent age

Examples: Photographers in Luneta and Film Cameras

Extent to which there is an absence of variety in a product, service or process.
Standardized products are immediately available to customers. Standardized service
implies that every customer or item processed receives essentially the same service

Advantages and Disadvantages of Standardization:

1. Fewer parts to deal with in inventory and in manufacturing.
2. Reduced training costs and time.
3. More routine purchasing, handling, and inspection procedures.
4. Orders fillable from inventory.
5. Opportunities for long production runs and automation.
6. Need for fewer parts justifies increased expenditures on perfecting designs
and improving quality control procedures.

1. Designs may be frozen with too many imperfections remaining.
2. High cost of design changes increases resistance to improvements.
3. Decreased variety results in less consumer appeal.

Mass Customization
A strategy of producing standardized goods or services, but incorporating
some degree of customization:
- Delayed differentiation
- Modular design
Delayed differentiation
- is a postponement tactic. Producing but not quite completing a product or
service until customer preferences or specifications are known
- Helps to align supply and demand as well as allow customization of
products and services
Modular Design
- is a form of standardization in which component parts are subdivided into
modules that are easily replaced or interchanged. Delivering wide range of
market good and services that are modified to satisfy a specific customer
needs or wants.
It allows:
 easier diagnosis and remedy of failures
 easier repair and replacement
 simplification of manufacturing and assembly
- Reduces cost due to less customization and shorter learning time. It is
flexible and easily replaceable.
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
Normal operating conditions: The set of conditions under which an item’s
reliability is specified
Improving Reliability
 Component design – design is user friendly
 Production or assembly techniques – Assembly techniques are not complex
 Testing - prototyping
 Redundancy or backup – parts have back ups
 Preventive maintenance procedures - maintenance and inventories
 User education – easy to understand and educating
 System design - systematic and well-functioning

Robust Design
Design that results in products or services that can function over a broad range of
conditions. The more robust a product or service, the less likely it will fail due to a
change in the environment in which it is used or in which it is performed.
Degree of Newness
Newness – design is modified or created in order to introduce a new product or
 Modification of an existing product/service
 Expansion of an existing product/service
 Clone of a competitor’s product/service
 New product/service

Quality Function Deployment

– Voice of the customer
– House of quality – a tool used to identify the importance of customer
desires versus the engineering characteristics of the product or
The House of Quality

1. Customer Requirements - details what the customer wants in the design of

the product or service
2. Design Requirements also known as engineering characteristics – defines
your product or design features and specification, can be method as well.
3. Relationship matrix – most important part as it correlates the engineering
design and the customer preferences.
4. Roof – correlation of the design requirements and identify if the specifications
are interconnected.
5. Competitive Assessment – identifies the company’s performance in
comparison to its competitors in the industry.
6. Basement - shows the evaluation of the design requirements and identifies
how you can fulfill your targets.
Kano Model
– is a theory of product and service design developed by Dr. Noriaki Kano.
Japanese professor, who offered a perspective on customer perceptions of
quality different from the traditional view that “more is better.”

Vertical Axis – represents the customer satisfaction

Horizontal Axis – represents the functionality
4 Categories:
1. Performance – proportional relation of satisfaction over function therefore
giving the basic or standard of the product of the design and at the same time
satisfies the customer with the excellent execution.
2. Basic – this is the “must be” wherein the expectation of the customer is to
deliver the standard product or services but as through time, customers tend
to get dissatisfied if this is solely offer due to the idea that “more is better”
3. Attractive or Excitement - wherein unexpected features were delivered that
gives very satisfactory results from the customers positive feedback. Also
known as the “wow factor”
4. Indifferent – middle and horizontal. It is the phase where it does not make a
real difference and effort does not matter to the customers.
Phases in Product Development Process
 Idea generation
 Feasibility analysis
 Product specifications
 Process specifications
 Prototype development
 Design review
 Market test
 Product introduction
 Follow-up evaluation
Concurrent Engineering
-is the bringing together of engineering design and manufacturing personnel
early in the design phase.
Computer-Aided Design
- is product design using computer graphics. It increases productivity of
designers, 3 to 10 times. Also creates a database for manufacturing information on
product specifications and provides possibility of engineering and cost analysis on
proposed designs.
- is the ease of fabrication and/or assembly which is important for:
 Cost
 Productivity
 Quality
Design for manufacturing (DFM)
The designing of products that are compatible with an Organization’s
Design for assembly (DFA)
Design that focuses on reducing the number of parts in a product and on
assembly methods and sequence.
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
 Service design
• The physical resources needed
• The goods that are purchased or consumed by the customer
• Explicit services
• Implicit services

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

Phases in Service Design

 Conceptualize
 Identify service package components
 Determine performance specifications
 Translate performance specifications into design specifications
 Translate design specifications into delivery specifications

Service blueprinting
A method used in service design to describe and analyze a proposed service. A
useful tool for conceptualizing a service delivery system
Major Steps in Service Blueprinting
 Establish boundaries
 Identify steps involved
 Prepare a flowchart
 Identify potential failure points
 Establish a time frame
 Analyze profitability

Characteristics of Well Designed Service Systems

 Consistent with the organization mission
 User friendly
 Robust
 Easy to sustain
 Cost effective
 Value to customers
 Effective linkages between back operations
 Single unifying theme
 Ensure reliability and high quality

Challenges of Service Design

 Variable requirements
 Difficult to describe
 High customer contact
 Service – customer encounter

Guidelines for Successful Service Design

1. Define the service package in detail. A service blueprint may be helpful for this.
2. Focus on the operation from the customer’s perspective. Consider how
customer expectations and perceptions are managed during and after the
3. Consider the image that the service package will present both to customers and
to prospective customers.
4. Recognize that designers’ familiarity with the system may give them a quite
different perspective than that of the customer and take steps to overcome this.
5. Make sure that managers are involved and will support the design once it is
6. Define quality for both tangibles and intangibles. Intangible standards are more
difficult to define, but they must be addressed.
7. Make sure that recruitment, training, and reward policies are consistent with
service expectations.
8. Establish procedures to handle both predictable and unpredictable events.
9. Establish systems to monitor, maintain, and improve service.

Operational Strategy
1. Increase emphasis on component commonality
2. Package products and services
3. Use multiple-use platforms
4. Consider tactics for mass customization
5. Look for continual improvement
6. Shorten time to market
-Use standardized components
-Use technology
-Use concurrent engineering