California State University, Sacramento



PRODUCT AND SERVICE DESIGN

Characteristics of Product Design

Product design is essential to a company's survival and growth.

The development of new products is a costly and risky business.

The products produced by an organization should complement each other.

A foremost consideration in product design is the market of the product.

Most products have a life cycle -- introduction, growth, maturity, saturation, and decline.

Over 70% of the cost of a product is locked in at the end of the design phase.

The cost of identifying and eliminating a defect during production is ten times the cost during design. The cost is 100 times if the defect is identified after the product is sold to the customers.

Trends in Product and Service Design

Emphasis on customer satisfaction

Reduction of time between new product & service introduction

Improvement in process capability for new product & service

Emphasis on safety, legal, ethical and environment concerns

Simplification of product & service design

Product Strategies

1. Market Leader Strategy -- Strong in research and development.

2. Follow-the-Leader Strategy -- Strong in development and engineering; enter during growth stage.

3. Application-Oriented Strategy -- Strong in engineering; enter during growth or maturity stage.

4. Production Efficiency Strategy -- Strong in operations; enter during maturity or saturation stage.

Team Approach to Product Design (Concurrent Engineering, Simultaneous Engineering)

Experts from different functions (e.g., R&D, engineering, purchasing, accounting, manufacturing, marketing, etc.), as well as key suppliers and customers work together as a team throughout the product design and development process. This approach offers significant benefits to product design.

Consideration in Product Design

Standardization versus customization (delay differentiation, modular design)

Simplification versus suitability

Reliability

Robust design

Design for manufacturability/assembly

Design for recycling and design for disassembly

Design for remanufacturing

Component commonality

Types of Services

One way to classify the various types of services is to consider the extent of customer contact in the creation of services.

High Contact -- Health care, school, retail store

Medium Contact -- Repair shop, branch office of a bank

Low Contact -- Mail order service, postal service

* High-contact systems encounter more uncertainties about the operations.

* High-contact systems are usually less efficient than low-contact systems, but customers receive better services.

The second way to classify services is based on degree of labor intensity.

Capital Intensive -- telephone service, postal services.

Labor Intensive -- teaching, legal services.

The third way to classify services is based on variability in service requirements.

High variability – professional service, high-end hospitality service

Moderate variability – education, routine medical service

Low variability – mass service

Factors for Service-System Design

Efficiency versus sales opportunities

Service-System Design Alternatives

1. Mail contact

2. On-site technology

3. Phone contact

4. Face-to-face tight specifications

5. Face-to-face loose specifications

6. Face-to-face total customization

7. Internet

|Design Alternative |Efficiency |Sales Opportunities |

|Mail Contact | | |

|On-Site Technology | | |

|Phone Contact | | |

|Face-to-Face Tight Specification | | |

|Face-to-Face Loose Specification | | |

|Face-to-Face Total Customization | | |

|Internet | | |

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