Chapter 4 Flashcards
What Does Product and Service Design Do?
The primary focus of product or service design should be on customer satisfaction. The various activities and responsibilities of product and service design include the following (functional interactions are shown in parentheses):
- Translate customer wants and needs into product and service requirements (marketing,
operations) - Refine existing products and services (marketing)
- Develop new products and/or services (marketing, operations)
- Formulate quality goals (marketing, operations)
- Formulate cost targets (accounting, finance, operations)
- Construct and test prototypes (operations, marketing, engineering)
- Document specifications
- Translate product and service specifications into process specifications (engineering,
operations)
Objectives of Product and Service Design
Primary consideration: Customer satisfaction.
Secondary considerations: Cost or profit, quality, ability to produce a product or provide a
service, ethics/safety, and sustainability.
Key Questions
From a buyer’s standpoint, most purchasing decisions entail two fundamental considerations;
one is cost and the other is quality or performance. 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)? - 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 known as serviceability. Also, is outsourcing some or all of the work
an option? - 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 the potential liability
issues, ethical considerations, sustainability issues, costs, and profits? For nonprofits, is
the cost within budget?
Manufacturability The capability of an organization to
produce an item at an acceptable profit.
Serviceability The capability
of an organization to provide
a service at an acceptable
cost or profit.
Product and service design typically has strategic implications for the success and prosperity
of an organization. The main forces that initiate design or redesign are market opportunities and threats.
The factors that give rise to market opportunities and threats can be one or more changes:
- Economic (e.g., low demand, excessive warranty claims, the need to reduce costs)
- Social and demographic (e.g., aging baby boomers, population shifts)
- Political, liability, or legal (e.g., government changes, safety issues, new regulations)
- Competitive (e.g., new or changed products or services, new advertising/promotions)
- Cost or availability (e.g., of raw materials, components, labor, water, energy)
- Technological (e.g., in product components, processes)
Reverse engineering
Dismantling and inspecting a competitor’s product to discover product improvements
Research and development (R&D)
Organized efforts to increase scientific knowledge or product innovation.
Basic research has the objective of advancing the state of knowledge about a subject, without any near-term expectation of commercial applications.
Applied research has the objective of achieving commercial applications.
Development converts the results of applied research into useful commercial applications.
Product liability
is the responsibility of a manufacturer for any injuries or damages caused by a faulty product
because of poor workmanship or design.
Uniform Commercial Code
which says that products carry an implication of merchantability and fitness; that is, a product must be usable for
its intended purposes.
Cradle-to-grave assessment
The assessment of the environmental impact of a product or service throughout its
useful life.
End-of-Life Programs
End-of-life (EOL) programs deal with products that have reached the end of their useful lives.
The products include both consumer products and business equipment. The purpose of these
programs is to reduce the dumping of products, particularly electronic equipment, in landfills or third-world countries, as has been the common practice, or incineration, which converts materials into hazardous air and water emissions and generates toxic ash
Value analysis
Examination of the function of parts
and materials in an effort to
reduce cost and/or improve
product performance.
Remanufacturing
Refurbishing used products by replacing worn-out or defective
components.
Design for disassembly (DFD)
Design so that used products
can be easily taken apart.
Standardization
Extent to which a product, service, or process lacks variety.
Mass customization
A strategy of producing basically standardized goods, but incorporating some degree of
customization.
