MNGT 3108 Lesson 3 Product and Service Design PDF

MNGT 3108— Lesson 3 Product and Service Design MNGT 3108 — Lesson 3 Product and Service Design Product and Service Design — Major factors in design strategy ▪ Cost ▪ Quality ▪ Time-to-market ▪ Customer satisfaction ▪ Competitive advantage Product and...

MNGT 3108— Lesson 3 Product and Service Design MNGT 3108 — Lesson 3 Product and Service Design Product and Service Design — Major factors in design strategy ▪ Cost ▪ Quality ▪ Time-to-market ▪ Customer satisfaction ▪ Competitive advantage Product and service design – or redesign – should be closely tied to an organization’s strategy. Time to market — is the total length of time it takes to bring a product from conception to market availability. Companies use time-to-market metrics during new product development (NPD) and new product introduction (NPI) as they strive to gain first-mover advantages (e.g., market share, sales revenue). First Mover Advantages 1. Brand name recognition — is the main first-mover advantage. Examples of dominant brand name recognition of a first-mover include soft drink colossus Coca-Cola (NYSE: KO), Kellogg (NYSE: K). 2. Economies of scale — which frequently enables it to establish a more cost- efficient means of producing or delivering a product before it competes with other businesses. 3. Switching costs Disadvantages of First Movers Despite the many advantages associated with being a first mover, there are also disadvantages. Example: other businesses can copy and improve upon a first mover’s products, thereby capturing the first mover’s share of the market. Product or Service Design Activities 1. Translate customer wants and needs into product and service requirements 2. Refine existing products and services 3. Develop new products and services 4. Formulate quality goals 5. Formulate cost targets 6. Construct and test prototypes 7. Document specifications 1|Page  MNGT 3108— Lesson 3 Product and Service Design Product and service design or redesign can be driven by several key reasons: 1. Market Changes: Shifts in consumer preferences, market trends, or competitive landscapes may necessitate redesign to stay relevant and appealing. 2. Technological Advancements: New technologies can enhance functionality, improve efficiency, or enable new features, prompting a redesign to leverage these advancements. 3. Customer Feedback: Insights from users can highlight pain points or desired features, leading to adjustments that enhance user satisfaction and usability. 4. Regulatory Compliance: Changes in laws or standards may require modifications to ensure that products or services meet legal requirements. 5. Sustainability Goals: Increasing focus on environmental impact may drive redesign efforts to make products more sustainable through materials, processes, or end-of-life considerations. 6. Cost Reduction: Redesigning for efficiency can reduce production costs, improve margins, or streamline service delivery without compromising quality. 7. Brand Evolution: As a brand evolves, its products and services may need to be updated to align with new brand values, identity, or positioning. 8. Lifecycle Management: Products have a life cycle; redesign may be necessary as they reach the end of their life or to refresh a product line. 9. Competitive Advantage: To differentiate from competitors, companies may redesign offerings to include unique features or improved user experiences. 10. Integration of Feedback Loops: Implementing continuous improvement practices can lead to iterative redesigns based on ongoing customer feedback and performance metrics. Each of these factors can play a significant role in ensuring that products and services remain competitive, relevant, and aligned with both business goals and customer needs. Objectives of Product and Service Design ▪ Main focus ▪ Customer satisfaction ▪ Understand what the customer wants 2|Page  MNGT 3108— Lesson 3 Product and Service Design ▪ Secondary focus ▪ Function of product/service ▪ Cost/profit ▪ Quality ▪ Appearance ▪ Ease of production/assembly ▪ Ease of maintenance/service Designing for Operations — Taking into account the capabilities of the organization in designing goods and services. — Failure to take this into account can: ▪ Reduce productivity ▪ Reduce quality ▪ Increase costs Regulations & Legal Considerations ▪ Product Liability — A manufacturer is liable for any injuries or damages caused by a faulty product. ▪ Uniform Commercial Code — Products carry an implication of merchantability and fitness. Designers Adhere to Guidelines ▪ Produce designs that are consistent with the goals of the company ▪ 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 — little or no variations ▪ Degree of newness ▪ Cultural differences 3|Page  MNGT 3108— Lesson 3 Product and Service Design Standardization ▪ Standardization ▪ Extent to which there is an absence of variety in a product, service or process ▪ Standardized products are immediately available to customers Robust design — is a systematic methodology to design products whose performance is least affected by variations, i.e. noise, in the system (system variations here means variations due to component size variations, different environmental conditions, etc.) 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 Advantages of Standardization (Cont’d) ▪ 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 standardized goods or services, but incorporating some degree of customization ▪ Delayed differentiation ▪ Modular design Delayed Differentiation Delayed differentiation is a postponement tactic ▪ Producing but not quite completing a product or service until customer preferences or specifications are known. 4|Page  MNGT 3108— Lesson 3 Product and Service 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 Products with Modular Designs Cars, computers, process systems, solar panels, wind turbines, elevators, furniture, looms, railroad signaling systems, telephone exchanges, pipe organs, synthesizers, electric power distribution systems and modular buildings are examples of platform systems using various levels of component modularity. Reliability ▪ Reliability: 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 intended ▪ Normal operating conditions: The set of conditions under which an item’s reliability is specified. Product design — is the process of efficient and effective idea generation and development with the goal of creating new products. Product Life Cycle Stages There are five distinct product life cycle stages: Product Development. When the company finds and develops a new product idea, product development starts. During product development, sales are zero, and the company’s investment costs increase. Introduction. Sales slowly grow as the product is introduced in the market. Profits are still non-existent, because the heavy expenses of the product introduction overweight sales. Growth. The growth stage is a period of rapid market acceptance and increasing profits. Maturity. In the maturity stage, sales growth slows down because the product has achieved acceptance by most potential buyers. Profits level off or decline because marketing outlays need to be increased to defend the product against competition. 5|Page  MNGT 3108— Lesson 3 Product and Service Design Decline. Finally, sales fall off and profits drop. Robust Design: Design that results in products or services that can function over a broad range of conditions. Taguchi Approach Robust Design Systemized statistical approach to product and process improvement developed by Dr. G. Taguchi ▪ Approach emphasizes moving quality upstream to the design phase ▪ Based on the notion that minimizing variation is the primary means of improving quality ▪ Special attention is given to designing systems such that their performance is insensitive to environmental changes Global Product Design Virtual teams ▪ Uses combined efforts of a team of designers working in different countries ▪ Provides a range of comparative advantages over traditional teams such as: ▪ Engaging the best human resources around the world ▪ Possibly operating on a 24-hr basis ▪ Global customer needs assessment ▪ Global design can increase marketability Phases in Product DevelopmentProcess 1. Idea generation 2. Feasibility analysis 3. Product specifications 4. Process specifications 5. Prototype development 6. Design review 7. Market test 8. Product introduction 9. Follow-up evaluation 6|Page  MNGT 3108— Lesson 3 Product and Service Design Idea Generation ▪ Considered ground zero in the product development process, idea generation (or ideation) involves gathering information and creative insights in order to come up with ideas for a new product. ▪ By getting it right, you lay a solid foundation for your new product concept and set it on the path to success Reverse engineering — is the dismantling and inspecting of a competitor’s product to discover product improvements. Research & Development (R&D) ▪ Organized efforts to increase scientific knowledge or product innovation & may involve: ▪ Basic Research advances knowledge about a subject without expectations of commercial applications. ▪ Applied Research achieves commercial applications. ▪ Development converts results of applied research into commercial applications. ▪ Manufacturability — is the ease of fabrication and/or assembly which is important for: ▪ Cost ▪ Productivity ▪ Quality 7|Page  MNGT 3108— Lesson 3 Product and Service Design Designing for Manufacturing Beyond the overall objective to achieve customer satisfaction while making a reasonable profit is: Design for Manufacturing(DFM) — is the process of designing parts, components or products for ease of manufacturing with an end goal of making a better product at a lower cost. — this is done by simplifying, optimizing and refining the product design. — DFMA (Design for Manufacturing and Assembly) is sometimes used interchangeably with DFM The designers’ consideration of the organization's manufacturing capabilities when designing a product. The more general term design for operations encompasses services as well as manufacturing. Some material properties to consider during DFM include: Mechanical Properties — how strong does the material need to be? Optical Properties — does the material to be reflective or transparent? Thermal Properties — how heat resistant does it need to be? Color — what color does that part need to be? Electrical Properties — does the material need to act as a dielectric (act as an insulator rather than a conductor)? Flammability — how flame/burn resistant does the material need to be? Concurrent engineering — is the bringing together of engineering design and manufacturing personnel early in the design phase. Benefits: Concurrent engineering, an approach in which multiple engineering tasks or projects are performed in parallel, provides benefits such as multidisciplinary collaboration, improved productivity, and a faster design process. Computer-Aided Design (CAD) — is product design using computer graphics. ▪ increases productivity of designers, 3 to 10 times ▪ creates a database for manufacturing information on product specifications ▪ provides possibility of engineering and cost analysis on proposed designs 2d Auto cad templates 8|Page  MNGT 3108— Lesson 3 Product and Service Design Product design ▪ Design for manufacturing (DFM) ▪ Design for assembly (DFA) ▪ Design for recycling (DFR) ▪ Remanufacturing ▪ Design for disassembly (DFD) ▪ Robust design Recycling: recovering materials for future use Recycling reasons ▪ Cost savings ▪ Environment concerns ▪ Environment regulations Remanufacturing: Refurbishing used products by replacing worn-out or defective components. ▪ Remanufactured products can be sold for 50% of the cost of a new producer ▪ Remanufacturing can use unskilled labor ▪ Some governments require manufacturers to take back used products 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 ▪ Automakers using internal parts ▪ Engines and transmissions ▪ Water pumps ▪ Etc. ▪ Other benefits ▪ Reduced training for assemble and installation ▪ Reduced repair time and costs 9|Page  MNGT 3108— Lesson 3 Product and Service Design Quality Function Deployment ▪ Voice of the customer ▪ House of quality QFD: An approach that integrates the “voice of the customer” into the product and service development process. Service Design ▪ Service is an act ▪ Service delivery system ▪ Facilities ▪ Processes ▪ Skills ▪ Many services are bundled with products Service design involves: ▪ The physical resources needed (Physical resources, such as raw material, buildings, vehicles, transportation, storage facility, machines and factory) ▪ The goods that are purchased or consumed by the customer ▪ Explicit services: Benefits readily observable by the senses. The essential or intrinsic features. (e.g quality of meal, attitude of the waiter, on-time departure) ▪ Implicit services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. ▪ 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 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 ▪ Range of service systems ▪ Demand variability 10 | P a g e  MNGT 3108— Lesson 3 Product and Service Design 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 (haircut, medical service) ▪ Consumer participation (diet program) ▪ Self-service (supermarket) Service Demand Variability ▪ Demand variability creates waiting lines and idle service resources ▪ Service design perspectives: ▪ Cost and efficiency perspective ▪ Customer perspective ▪ Customer participation makes quality and demand variability hard to manage ▪ Attempts to achieve high efficiency may depersonalize service and change customer’s perception of quality 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 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 1. Establish boundaries 2. Identify sequence of customer interactions Prepare a flowchart 3. Develop time estimates 4. Identify potential failure points Characteristics of Well Designed Service Systems 1. Consistent with the organization mission 2. User friendly 11 | P a g e  MNGT 3108— Lesson 3 Product and Service Design 3. Robust 4. Easy to sustain 5. Cost effective 6. Value to customers 7. Effective linkages between back operations 8. Single unifying theme 9. Ensure reliability and high quality Challenges of Service Design 1. Variable requirements 2. Difficult to describe 3. High customer contact 4. Service – customer encounter 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 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 Operations 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 Shorten Time to Market 1.Use standardized components 2. Use technology 3. Use concurrent engineering 12 | P a g e