Product and Service Design

Graeme Warren
Copyright Graeme Warren 1
Product & Service Design Activities
Product and service activities performed by teams with mixed
backgrounds from marketing, operations, and engineering/research.

Product and service design activities include:
Translating customer wants and needs into product and service
requirements.
Refining existing products and services, developing new products
and services.
Formulating quality goals, cost targets, and supply chain
effectiveness targets.
Building and testing prototypes, performing pilot studies.
Documenting specifications.
Translating product and service specifications into business process
specifications.

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Key Questions
Is there demand for the new or refined product/service?
Will the addition enhance the firms reputation and is it
aligned with the firms mission?
Is the new product/service a feasible addition to the
business portfolio? There are many sub-questions to this:
Is the product manufacturable (i.e., does the business have the
resources, skills, etc. necessary to take a lab prototype and
produce it on a large commercial scale?), or serviceable (in the
case of services)?
Can the goods and services be sustainably produced (i.e., with
minimal environmental impact)?
Can the product/service be profitably offered?
What are the legal, ethical, political, and liability, and safety
issues associated with the proposed offering?

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Heraclitus
Impetus to design new products/services or re-design existing ones
is fundamentally tied to the need to compete.
Continuous SWOT analysis will reveal threats and opportunities in
the market as some competitors bring new offerings to market, and
others disappear. A firms strengths and weaknesses will wax and
wane as time goes by. Technology and research advances are
continually made; we are faced with a world of change.
Paraphrasing the early (6
th
century BCE) philosopher Heraclitus,
observe that it is impossible to step into the same business twice.
In practice, though, we must embrace change, and use change to
align our product/service offerings with our strategies to bolster our
competitive position.
See http://en.wikipedia.org/wiki/Heraclitus for more on Heraclitus.

Disclosure: The image of Heraclitus above is from Wikimeda Commons and is in the public domain.

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Idea Generation
Ideas can be come from a variety of sources:
From customers: via surveys, pilot studies/trials.
From suppliers (especially in design interactions/collaboration),
distributors and employees.
From competitors: observing what works in the market; some
companies reverse-engineer (dismantle and inspect) a competitors
product for ideas for improvement of their own product.
In house, by doing research: basic, applied and commercializing
types. Most focus is upon applied and commercializing research
because basic research does not yield products or services that are
commercializable in the short term. Research is important because
it establishes the intellectual property base of the firm (patents,
trade secrets, copyrights). Both product/service research and
business process research need to be pursued (there is continual
innovation in operations also).

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Design Considerations
A variety of legal and ethical issues need to be
considered:
Regulator (FDA, OSHA, EPA, and state regulators)
requirements must be satisfied.
Product safety liabilities must be factored (possibility
of voluntary and mandatory product recalls, lawsuits,
settlements, reputational damage, impact on
insurance, need to supplement the design with safety
instructions and/or supplementary safety equipment).
Avoid fraudulent behavior (simply deception, and
turning a blind eye to safety concerns or environmental
impacts).

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Design Considerations
Various user and cultural factors need to be
considered:
Usability of the product/service.
Regional/cultural differences among
consumers.
Design team members in diverse locations
may be virtually involved in the design
process, likely via internet technologies.

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Design Considerations: Sustainability
Life cycle analysis identifies the environmental footprint of a good
or service throughout its useful life and beyond, from the energy
and natural resource consumption, pollution, landfill, and global
warming impacts of securing raw materials (via mineral extraction,
harvesting of plants, trees, fish, animals) through manufacturing,
transportation, use in the hands of the original consumer, through
to re-use, recycling, re-furbishing or disposal.
End-of-life (EOL) programs deal with products that have reached
the end of their useful life and must be disposed or recycled. Some
products (particularly batteries and electronic products) are
environmentally hazardous due to the presence of acids and heavy
metals such as cadmium, chromium and nickel) require special
disposal. Designing products to facilitate easy dismantling,
separation of materials, and disposal is increasingly important as
manufacturers are required by potentially costly take-back laws to
help finance recycling of old product.

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Design Considerations: Sustainability
Reverse logistics. Four significant reverse logistics channels:
re-use (selling used product in the pre-owned market),
recycling (usually of base minerals, glass, plastics, lubricants, solvents, etc.) The goal
is to have 100% of all materials stay in reverse logistics channels and to have zero
waste enter the landfill, and some jurisdictions (especially in the EU) have laws on
the books requiring minimum percentage recyclability of product. Some countries
heavily tax (or have outrights bans on) certain products (e.g., plastic shopping bags
are banned in 25% of the worlds countries (See
http://en.wikipedia.org/wiki/Plastic_shopping_bag); many US stores sell re-usable
shopping bags). In recycling channels the design should facilitate easy recovery of the
recyclable materials (design for recycling (DFR)).
refurbishing (replacing key defective/obsolete/worn out components usually
mechanical and cosmetic components - in preparation for resale). In refurbishing
channels the preference is for product that can be easily dismantled/disassembled
(design for disassembly (DFD)).
repair.

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Design Considerations: Sustainability
Value analysis is essential. A zero-waste design may involve significant energy
(and possible carbon footprint/global warning impacts) to implement. Holistic
analysis is needed. Savings can be implemented in many ways: in reduced
packaging (have a look at the packaging at IKEA if/when you are next in the
store), energy consumption, usage of natural resources, shipping, etc.
Alternative procedures, tools, materials, technologies, software, etc. need to
be investigated and considered.

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Source:
http://www.publications.parliament.uk/pa/cm200506/c
mselect/cmenvaud/584/5111706.htm In the public
domain (downloaded from Wikimedia
Other Design Considerations: Lifecycle
Most products and services go through several stages over
their useful life.
Stages:
An introductory phase (during which the product/service is new
to the market, and design imperfections are worked out),
A growth phase (during which demand accelerates),
maturity (during which demand levels off), and
Decline (as the product/service becomes obsolete or becomes
less attractive to consumers due to other offerings).
Consider the timing and targeting of design and re-design
efforts evolving technological and competitive landscape to
ensure that the firm does not end up with a very dated,
declining portfolio.

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Other Design Considerations:
Degree of Customization
Degree of product standardization is key. Standardized parts are
interchangeable, and can typically be produced using non-flexible
automation at very low cost.
Mass production: use in situations where variation can be minimized and
the customer either doesnt care (or wants uniformity) e.g., Tin Lizzie.
Mass production is easy quality concerns, operating procedures, and the
like can all be optimized in great detail due to the large volumes,
repeatability, and lack of variation present in a mass production
environment. Main disadvantage: consumer often wants differentiation.
Mass customization and artistic strategies have been offered as
alternatives to the consumer for product differentiation. Artistic processes
are usually labor intensive, require substantial creativity, expensive. They
are therefore typically employed in the production of luxury goods and
services. Mass customization offers a reasonable middle ground, retaining
some of the advantages of mass production while offering the consumer
some (semblance?) of differentiation and uniqueness.
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Mass Customization Techniques
Delayed differentiation: this involves the postponement of some
elements of a product or service until the wishes of a specific
customer are known, after which the product/service is completed
in accordance with the tastes of that person. Examples: dealer
assembly (or, more generally, channel assembly, i.e., work
performed after the product has been shipped from the factory) is a
prominent example of delayed differentiation, homebuilders, etc.
Delayed differentiation involves customization at point of sale and
usually offers limited opportunities for subsequent customization.
Modular design: use of modules, e.g., computer modules, rims.
Modular design allows the participation of third-party
providers/developers, allows for customization later in the life of a
product (for example, one can use newer modules to update an
older computer), and facilitates easy diagnosis and replacement of
equipment by focusing these activities at the module rather than
component level.

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Other Design Considerations
Reliability: the ability of a product or service to
perform its intended function for an expected
lifetime under normal operating conditions.
Improve reliability of a product/service by
improving the design, materials, and construction
of a product/service, improved consumer
awareness of appropriate maintenance
schedules, and improved installation and
operating guidelines.

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Phases in Product Design
Feasibility analysis is undertaken to determine if there is demand, if
the product can be profitably manufactured, and whether the
proposed product strategically fits the corporate portfolio.
If the product is a go, work commence on product specifications,
followed by
Process specifications (identification of the manufacturing and
distribution resources needed to get the product to market).
Prototypes are then developed, followed by
Reviews and in-house testing.
Market testing is then performed to see whether the anticipated
market will materialize. If there is a market then the product is
Launched.
Reviews and refinements are made as markets respond to the
product.

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Strategies/Techniques for
Product Design
Concurrent Engineering
Computer-aided design & prototyping
Production requirements
Component commonality or substitutability
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Concurrent Engineering
Use of multi-skilled team (engineers,
manufacturing engineers, marketing specialists,
artists) to design a product/service.
Supported by a concurrent engineering software
platform that allows for seamless integration of
their various contributions.
Project basis.
Key idea : get all relevant decision makers and
contributors to the same table to allow for a
collaborative design experience that builds
synergy.

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Computer-Aided Design (CAD)
CAD allows collaborative design.
Incorporate empirical test results, finite element modeling, simulated wind or
stress testing of designs, what-if analysis using alternative and composite
materials, automated cost analysis, simulation of operating scenarios, etc.
Rapid prototyping (see video): stereo lithography, Z corp 3D printing, selective
laser sintering, objet-polyjet modeling, fused deposition modeling, Z Corp
digital light processing, RTV modeling urethane plastic, direct metal laser
sintering.
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Screenshot obtained from Wikimedia Commons, under
presumed free license
Stereo Lithography
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Image describing stereo photo lithography. By Usdabhade (Own work) [CC-BY-SA-3.0
(http://creativecommons.org/licenses/by-sa
Production Requirements
Lab prototypes versus large-scale production:
translation exercise The technologies, resources and
skillsets available on the shop floor often differ
markedly from those of the R&D lab.
Designs have to be manufacturable and assembleable.
Mechanical engineers take design for
manufacturability (DFM) and design for assembly (DFA)
coursework e.g., type of fasteners used, fool-proofing,
etc.
Question of ease of disassembly (for repair,
refurbishment, or recycling) at EOL is always present.

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DFD
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The Goal of Discarded Dreams by
PROJECT LEAD: R. Spencer Steenblik,
ARCHITECTURAL DESIGNER: Aaron
Legendre [CC-BY-3.0
(http://creativecommons.org/licenses/by
/3.0)], via Wikimedia Commons
Component Commonality
Use a part in multiple designs. Limits
variation. Common parts (e.g., the use of the
same water pump in multiple vehicles) save
on design and re-design effort; simplification
of production requirements.
Substitutable parts may be made by third
party suppliers and create competitive
pressures that lower prices.

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Strategies/Techniques/Issues in
Service Design
Differences between goods and services
Service package design
Phases of service design
Characteristics of well-designed systems
Guidelines for service design

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Differences: Goods and Services
Goods are tangible, can often be made without the customer being present, and
can be stored (inventoried).
Easy to measure the quality of goods and the productivity of good-producing
facilities due to standardization/uniformity of the output of a manufacturing
process.
Barriers to entry are often higher in goods-producing industries because of the
capital expenditure required to purchase machinery and equipment.
Services are intangible, pose unique challenges because of extensive customer
involvement (and associated variability of service needs).
Workers in services need to be specially trained to handle customer interactions.
Quality and productivity characteristics of service operations are often hard to
measure because of the variability in customer needs and the dynamic nature of
the service tasks performed.
Cost and efficiency objectives work well in goods production; such de-
personalizing measures may appear hard or non-empathic in service settings
where engagement (and even entertainment) of the customer may be essential.
Customers are often intimately involved in services. This visibility puts significant
pressure on workers in service encounters.

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Service Package
Services are often bundled into a service package. It is the overall
bundle of services that are rated by consumers.
The elements of a service package are: the physical resources
needed (e.g., facilities, employees, etc.), the accompanying goods
that are purchased/consumed by the customer (e.g., the router or
digital receiver needed to receive high-speed internet services), the
explicit services, and implicit services (e.g., courtesy, empathy, etc.).
Service packages need to be carefully contrived to meet the needs
of a significant consumer demographic.
Services are complex. Many elements need to be considered
including the degrees of variation demanded by customers, the
levels of standardization possible, the cognitive requirements
placed workers, skill sets of workers, technologies that can
automate or manage the work flow, etc.


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Phases of Service Design
The phases of service design are:
conceptualization (idea generation, assessment of
customer wants/needs, feasibility assessment),
design the service package,
determine service and process specifications,
translate service specs into design specs and then into
delivery specs.

It is often useful to document the service using a service
blueprint. Theyre useful for understanding customer-server
interactions, contingencies, documenting task time elements,
and as a facilitation tool for re-scripting the design in design
meetings.

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Characteristics of well-designed
service systems
Consistency with the organizational mission,
Having a clearly identifiable competitive priority
(or two),
Valuable to customers (addresses needs),
Reliability,
Robustness (can accommodate different settings
and other variability in customer needs),
Environmental and operational sustainability, and
Cost-effectiveness.

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Guidelines for Service Design
Define the service package in detail. Use a service blueprint.
Address both routine and contingency settings/needs.
Maintain a customer-centric focus in the design process. Solicit
customer input to ensure that customer needs really are targeted.
Consider those elements of the service that are visible to customers
and make sure that they are polished.
Understand the operational demands of the service design and
make sure that resources and managerial interventions will be in
place to sustain provision of the service.
Develop quality and productivity benchmarks, and measure service
performance as part of a continuous improvement program.

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Links from Design to
Competitive Priorities
Cost: e.g., reductions in manufacturing cost and packaging cost.
Quality:
Top/unique quality: luxurious products/services can be designed (top quality).
In addition, Patentable or copyright designs allow a firm to compete on the
basis of unique quality.
Consistent quality: improving the robustness, serviceability, reliability, or
maintainability of a design will increase the competitiveness of a product from
the consistent quality perspective.
Time: building a design team that can move quickly from concept to
market will allow the firm to compete on the basis of development speed
Flexibility:
Customization: e.g., designing goods/services that are more customizable.
Variety: e.g., the design process will produce a larger portfolio of
goods\/services.
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FIN
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