Operation management 9e stevenson mcgrwhill chap004

4 Product and Service Design McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc All Learning Objectives  Explain the strategic importance of product and service design  List some key reasons for design or redesign  Identify the main objectives of product and service design  Discuss the importance of standardization  Discuss the importance of legal, ethical, and environmental issues in product and service design 4-2 Learning Objectives        Briefly describe the phases in product design and development Describe some of the main sources of design ideas Name several key issues in manufacturing design Name several key issues in service design Name the phases in service design List the characteristics of well-designed service systems Name some of the challenges of service design 4-3 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 4-4 Product or Service Design Activities Translate customer wants and needs into product and service requirements Refine existing products and services Develop new products and services Formulate quality goals Formulate cost targets Construct and test prototypes Document specifications 4-5 Reasons for Product or Service Design  Economic  Social and demographic  Political, liability, or legal  Competitive  Cost or availability  Technological 4-6 Objectives of Product and Service Design  Main focus  Customer satisfaction  Understand what the customer wants  Secondary focus       Function of product/service Cost/profit Quality Appearance Ease of production/assembly Ease of maintenance/service 4-7 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 4-8 Legal, Ethical, and Environmental Issues  Legal  FDA, OSHA, IRS  Product liability  Uniform commercial code  Ethical  Releasing products with defects  Environmental  EPA 4-9 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 4-10 The Kano Model Figure 4.5 Custom er Satisfaction Kano Model Excitement Expected Must Have Customer Needs 4-45 Service Design  Service is an act  Service delivery system  Facilities  Processes  Skills  Many services are bundled with products 4-46 Service Design  Service design involves  The physical resources needed  The goods that are purchased or consumed by the customer  Explicit services  Implicit services 4-47 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 4-48 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 4-49 Service Systems  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 (hair cut, medical service) Consumer participation (diet program) Self service (supermarket) 4-50 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 4-51 Phases in Service Design Conceptualize Identify service package components Determine performance specifications Translate performance specifications into design specifications Translate design specifications into delivery specifications 4-52 Service Blueprinting  Service blueprinting  A method used in service design to describe and analyze a proposed service  A useful tool for conceptualizing a service delivery system 4-53 Major Steps in Service Blueprinting Establish boundaries Identify sequence of customer interactions • Prepare a flowchart Develop time estimates Identify potential failure points 4-54 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 4-55 Challenges of Service Design Variable requirements Difficult to describe High customer contact Service – customer encounter 4-56 Guidelines for Successful Service Design Define the service package Focus on customer’s perspective Consider image of the service package Recognize that designer’s perspective is different from the customer’s perspecticve Make sure that managers are involved Define quality for tangible and intangibles Make sure that recruitment, training and rewards are consistent with service expectations Establish procedures to handle exceptions Establish systems to monitor service 4-57 Operations Strategy Increase emphasis on component commonality Package products and services Use multiple-use platforms Consider tactics for mass customization Look for continual improvement Shorten time to market 4-58 Shorten Time to Market Use standardized components Use technology Use concurrent engineering 4-59 ... Cost/profit Quality Appearance Ease of production/assembly Ease of maintenance/service 4-7 Designing For Operations  Taking into account the capabilities of the organization in designing goods and services