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Chapter 04 - Product and Service Design
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CHAPTER 04
PRODUCT AND SERVICE DESIGN
In planning the production system, major decisions are made concerning the design of the product or
services as well as the design of the production processes. Entrepreneurs usually formulate new
businesses based on a unique product or a service idea. In existing firms, new products or services are
introduced when the competition for existing products increases or as existing products approach the end
of their product life cycle. Even after a few new products are launched, and even if these products are
successful, because they have limited life cycles, companies always seek and consider new product
possibilities. If a company continuously monitors new product possibilities, and if there is a product
failure among the current products, or if there is a significant change in the product market, then the
company still can be in position to release a new product to fill the void. This chapter focuses on the
design of products and services. The main topics in this chapter include:
1. The reasons, trends, and objectives of Product and Service Design.
2. The Design Process (Designing for mass customization, reliability, robust design, etc.).
3. Research and Development.
4. Standardization.
5. Product Design (concurrent engineering, computer aided design, remanufacturing).
6. Service Design.
7. Quality Function Deployment.
8. Operations Strategy.
There are not many things more important to an organization than its products and/or services and there is
a rather obvious connection between the design of those products and/or services and the organization’s
success. Consequently, organizations are vitally concerned about achieving outstanding product and
service design so that they can compete in today’s global marketplace.
Reading: Do You Want Pickled Beets with That?
1. Cultural differences affect the fast food offerings dramatically, especially in countries where beef
is not served (e.g., India). In addition, some of the countries listed add some unique type of
flavoring to their burgers (e.g., spiced tomato sauce, spicy garlic bulgogi sauce, and yogurt
sauce).
2. Marketing is affected by the differences in product offerings (the salespeople must familiarize
themselves with local favorites). Supply chain management is affected by having to find suppliers
for and transport products different than those sold in the U.S.
Reading: Lego A/S in the Pink
1. Student answers may vary. Dell laptops now are assembled with different color cases. Some
brands of running shoes now are sold in a wider variety of colors also.
Chapter 04 - Product and Service Design
Reading: The Challenges of Managing Services
1. In comparison to manufacturing industry, services have:
a. Less structured jobs.
b. Higher customer contact.
c. Lower worker skills.
2. Because of the factors listed in the answer to question 1, in the service industry it is more difficult
to control costs and quality resulting in lower productivity. In addition, the risk of customer
dissatisfaction is greater and employee motivation is lower.
Answers to Discussion and Review Questions
1. Organizations redesign their products and services for a variety of reasons. Among them are
customer dissatisfaction, government regulation, competition, liability claims, technological
2. Applied research is research with a specific “commercial” application goal; basic research is
intended to increase knowledge about a subject or area.
3. CAD refers to computer-aided design: computer graphics used for product design. A designer can
4. The main advantages of standardization are:
a. Less variety of parts to deal with.
b. Permits standardized training, purchasing, inspection, and material handling. It may also
permit automation.
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10. Research and development can contribute to productivity by helping to uncover new and better
11. Mass customization is a strategy of producing standardized goods or services while incorporating
a certain degree of customization in the final product or service. Mass customization can be
achieved using a couple of different tactics. These tactics are delayed differentiation and modular
design.
12. Differences between service design and product design:
a. Products are generally tangible; services are generally intangible. Consequently, service
design often focuses more on intangible factors (e.g., peace of mind, ambiance) than does
product design.
13. Robust design is a design that results in products or services that can function over a broad range
of conditions. The more robust a product is the less likely it will fail due to a change in the
14. Quality function deployment (QFD) is a structured approach for integrating the “voice of the
15. Reverse engineering is dismantling and inspecting a competitor’s product to discover product
improvements.
