The document discusses the product/service design process. It begins by outlining the importance of designing products/services that satisfy customer needs to ensure business success. It then describes the roles of marketing, engineering, and operations functions in the design process. The rest of the document details the steps in the design process from idea generation to production design to addressing quality and costs. It also compares characteristics of goods versus services.

1. Product/Service
and Design
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2. The Product design process
• The purpose of any organisation is to provide products
and services to its customers. But the success of the
product or service depends on its acceptance on the
market. Therefore products that satisfy the needs of the
customer must be designed, while maintaining quality.
This will ensure long-term success of the organization.
The design process primarily depends on the
relationship between the marketing, design and
operations functions of the organisation for its success.
The cooperation of these functions should facilitate
identification of customer needs, production of a cost-
effective and quality design, which meets customer
needs. Costly designs can result into an overpriced
product that may loose market share.
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3. Roles of the functions
 Marketing function
 To evaluate consumer needs thru market research.
 Provision of a demand forecast in the market, while
taking into account the external environment.
 Understanding the attributes of the product/service life
cycle.
• Engineering
• Carrying out product/service design and re-engineering
Operations
• Production of the good or service as designed using the
specified processes
• Ensuring efficient levels of supply while delivering a high
quality product. 3

4. Product Design
• This specifies which materials are to be used; it
determines the dimensions and tolerances, the
appearance of the product, and sets standards for
performance.
• Service design on the other hand
• Specifies what physical items, sensual benefits and
psychological benefits the customer is to receive from
the service.
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5. Effective process
An effective design process
• Matches product or service characteristics with customer
requirements
• Ensures that customer requirements are met in the
simplest and least costly manner
• Reduces the time required to design a new product or
service
• Minimizes the revisions necessary to make a design
workable.
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6. Product Design Process
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7. Idea generation
Ideas for new products or improvement on already
existing products can be generated from many sources
which may include the co’s Researh&Development dep’t,
customer complaints or suggestions, marketing
research, suppliers, sales persons in the field, factory
workers and new technological developments and
competitors. Perceptual maps (a visual method of
comparing customer perceptions of different products or
services), bench marking (Comparing a product or
process against the best in class product) and reverse
engineering (carefully dismantling competitor’s product
to improve your own product) can help companies learn
from competitors.
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8. Feasibility Study
• This consists of a market analysis, an economic
analysis, and a technical/ strategic analysis.
• Market analysis assesses whether there’s enough
demand for the proposed product to invest in its further
development. It involves carrying out customer surveys,
interviews, focus groups, or market tests so as to
evaluate the product concept (refers to the physical
product and the overall set of expected benefits that a
customer is buying).
• Economic analysis: - consists of developing estimates
of production and development costs and comparing
them with estimates of demand. Estimates of demand
can be derived from statistical forecasts of industry sales
and estimates of market share, in the sector the product
is competing in. 8

9. • Techniques such as cost/benefit analysis, cost- volume-
profit (CVP) model, decision theory and accounting
measures such as net present value (NPV) and Internal
rate of return (IRR) may be used to calculate the
profitability of the product.
• Technical analysis - Involves ensuring whether the
technical capability to manufacture the product exists. It
ensures availability of appropriate materials, machinery,
and skills to work with the materials.
• Strategic analysis involves ensuring that the product
provides a competitive edge for the organisation,
drawing on its competitive strengths and it’s compatibility
with the core business.
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10. Preliminary Design
• It involves testing and revising a prototype, until a viable
design is determined. The engineers take general
performance specifications and translate them into
technical specifications. It includes form design and
functional design.
• Form design
• Refers to the physical appearance of the product, i.e.
how it will look like in terms of shape, colour, size,
image, market appeal, and style
• Functional design
• Is concerned with how the product will perform. The key
characteristics considered here are reliability and
maintainability.
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11. • Reliability: - is the probability that a given part or product
will perform its intended function for a specific period of
time under normal conditions of use.
• Maintainability/ serviceability: -Refers to the ease or cost
with which a product or service is maintained or repaired
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12. Production design
• Refers to how the product will be made. Designs
that are difficult to make always result into poor
quality products. Recommended approaches to
production design include simplification,
standardisation and modularity.
• Simplification reduces the number of parts,
assemblies, or options in a product, whereas
with standardisation, commonly available and
interchangeable parts can be used.
• Modular designing combines standardized
building blocks, or modules, to create unique
finished products.
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13. Final design and process plans
• This design consists of detailed drawings and
specifications for the new product or service. It
also includes process plans, which are
instructions for manufacture, including
necessary equipment and tooling, component
sourcing recommendations, job descriptions and
procedures for workers and computer
programmes for automated machines.
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14. The final product should:
 Satisfy customer needs
 Be able to be produced economically and
efficiently
 Be of quality
 Be simple, safe and reliable to use
 Have good ergonomic features
 Be environmentally friendly both in use
and disposal
 Be economic and simple to maintain
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15. Service X-tics and Operational Issues
• Services
– acts, deeds, or performances
• Goods
– tangible objects
• Facilitating services
– accompany almost all purchases of goods
• Facilitating goods
– accompany almost all service purchases
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16. Characteristics of services
• The unique service characteristics include:
customer influence, intangibility, inseparability of
production and consumption, heterogeneity,
perishability, and labor intensity.
• These six characteristics are not necessarily
independent of one another. They are
interdependent and overlap to some degree.
The combination of these characteristics makes
service industries unique and the management
of service operations complex.
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17. • Customer influence The presence of the customer
in service delivery is one source of complexity not
generally found in manufacturing settings. Customer
influence (contact, interaction, encounters,
participation, and involvement) reflects the impact of
the customer on service operations.
• Intangibility is often cited as a fundamental
difference between goods and services. Services
cannot be touched, seen, and tasted in the same
manner as manufactured goods. Services consist of
facilitating goods, supporting facilities, implicit
services, and explicit services. It is through a mix of
these four elements that customers perceive and
experience service.
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18. • Simultaneity This refers to the inseparability of production and
consumption. This exposes the production process to customer
examination and influence. Most goods are produced in factories
without the presence of customers and then shipped, sold, and
consumed in separate stages and separate places. Services are
usually sold first and then produced and consumed
simultaneously. There is no buffer or clear distinction between
the production stage and the consumption stage.
• Heterogeneity The output of the service can vary from service
provider to service provider, from customer to customer, and
from day to day. To make it more complicated and interesting,
customers' evaluation of the same service performance can be
quite different. The main causes of heterogeneity are:
• The service may be intentionally customized.
• Human involvement of the service provider and the customer,
naturally creates variability.
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19. • Perishability In services, unused capacity is capacity lost
forever. Airline seats not taken, lodge rooms not
occupied, and theater tickets not sold cannot be stored
and sold tomorrow. This characteristic is known as
perishability. It leads to difficulty in demand
management, capacity utilization, production planning,
and personnel scheduling.
• Labour intensity Service organizations are often
characterized as being more labor intensive than
manufacturing organizations. Service management is
seen as being different from manufacturing
management because of the higher labor content in
most service settings.
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20. Differences between Goods and services
It’s important to note that not all differences apply to all
services with equal force, in citing these differences we
are dealing with generalizations which have to be taken
into consideration.
• Nature of the Product While a good is a tangible
product (object, device, thing) a service is an intangible
product (a deed, an act, performance, or an effort). It is
impossible for customer to sample – see, taste, feel,
hear, or smell a service before they buy it unlike for the
good. Like all performances, services are time bound
and experiential, even though they may have lasting
consequences. The person getting a service cannot
know the outcome in advance. The customer has to
have faith in the service provider. Service providers can
do certain things to improve the client’s confidence.
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21. • Customer Involvement in Production Performing a
service involves assembling and delivering the output of
a mix of physical facilities and mental or physical labour.
Often customers are actively involved in helping to
create the service product–either by serving themselves
or by co–operating with service personnel in certain
setting. Thus the customer takes part directly in the
production of a service.
• Services unlike goods can be categorised according to
the degree of contact that the customer has with the
service organisation.
• People as Part of the Product In high–contact services,
customers not only come into contact with service
personnel, they may get in contact with other customers.
Also, the type of customer who patronises a particular
service business helps to define the nature of the service
experience. 21

22. • Quality Control Problems Manufactured goods can be
checked for conformance with quality standards long
before they reach the customer. But when services are
consumed as they are produced, final “assembly” must
take place under real–time conditions. As a result,
mistakes and shortcomings are harder to conceal since
production (provision) takes place in the presence of the
customer.
• No inventories for Services In the goods industry goods
can be preserved to meet future demand. Because a
service is a deed or performance rather than a tangible
item that the customer keeps, it cannot be inventoried.
Services are consumed to a large extent at the same time
as they are produced, thus services cannot be stored or
transported. Of course, the necessary equipment,
facilities and labour can be held in readiness to create the
service, but these simply represent productive capacity,
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not the product itself.

23. • Importance of the Time Factor Many services are delivered in
real time; services are created, dispensed, and consumed
simultaneously. A service is inseparable from its source
whether the source is a person or machine. Moreover,
customers have to be present to receive some service. There
are limits as to how long customers are willing to be kept
waiting for service to be provided (think of a hungry man
waiting at a restaurant).
• Different Distribution Channels Unlike manufacturing firms,
which require physical distribution channels for moving goods
from factory to customers, service businesses either use
electronic channels or else combine other types of channels.
In the latter instance, service firms often find themselves
responsible for managing customer-contact personnel. They
may also have to manage the consumption behaviour of
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24. customers who enter the service factory to ensure that
the operation runs smoothly and that one person’s
behaviour doesn’t irritate other customers who are
present at the same time.
• Potential Entrants Threat Unlike manufacturing, most
service operations require very little in the way of capital
investment, multiple locations, or proprietary technology.
For many services, therefore, barriers to entry are low.
Low barriers to entry imply that service operations must
be very sensitive to potential as well as actual
competitive actions and reactions. Competitors can enter
an industry easily. For this reason service provider
should always act very quickly to counter actions of
competitors and potential entrants.
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25. The Service design process
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26. • Service concept
– purpose of a service; it defines target market and
customer experience
• Service package
– mixture of physical items, sensual benefits, and
psychological benefits
• Service specifications
– performance specifications
– design specifications
– delivery specifications
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27. The Product Life cycle
• The Product Life Cycle (PLC) is based upon the
biological life cycle. For example, a seed is planted
(introduction); it begins to sprout (growth); it shoots out
leaves and puts down roots as it becomes an adult
(maturity); after a long period as an adult the plant
begins to shrink and die out (decline).
• The Product Life Cycle refers to the succession of
stages a product goes through.
• In theory it's the same for a product. After a period of
development it is introduced or launched into the market;
it gains more and more customers as it grows; eventually
the market stabilises and the product becomes mature;
then after a period of time the product is overtaken by
development and the introduction of superior
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28. • competitors, it goes into decline and is eventually
withdrawn.
• However, most products fail in the introduction phase.
Others have very cyclical maturity phases where
declines see the product promoted to regain customers.
• market stabilizes and the product becomes mature; then
after a period of time the product is overtaken by
development and the introduction of superior
competitors, it goes into decline and is eventually
withdrawn.
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29. • However, most products fail in the introduction phase.
Others have very cyclical maturity phases where
declines see the product promoted to regain customers.
• A product is anything that can be offered to
the market for attention, use or consumption
that might satisfy consumer needs and wants.
A product can comprise of a physical object,
service, place, person, ideas etc.
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30. • Once a product has been designed and
commercially launched on the market, a
company must manage it by changing tastes,
technology and competition. Every product goes
thru a life cycle I.e. it grows, matures and
eventually dies as newer products come along
and serve the customers’ needs better. The
product lifecycle describes the stages a new
product idea goes through from the beginning to
the end. It is the course that a product’s sales
and profits take over its lifetime. The PLC is
divided into 5 major stages
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31. 31

32. • Product development stage This stage begins when a
company finds and develops a new idea. During this
stage, sales are zero, and profits are negative.
Introduction stage Is a stage in which the new product
is first distributed and made available for purchase. -
Production costs are high, frequent design changes may
occur, little or no competition for the new product. Low
sales, negative profits
• The operations objective should be to create product
awareness and trial.
• Strategies
• Offer a basic product, use cost-plus price, and use heavy
sales promotion to entice trial by customers, build
selective distribution, and build product awareness
among early adopters and dealers. 32

33. • Growth stage
• This stage is characterized by a rapid increase in
volumes and the possibility of competitors entering the
market. There will be increased sales, profits, an
increase in customer acceptance, declining production
costs resulting from process improvements, and
standardisation.
• Operations objective;
• Maximise the market share.
• Strategies:
• Establish the product in the market as firmly as possible
in order to secure future sales, Improve product quality
and introduce new product features, Lower prices to
penetrate the market, Build awareness and interest in
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34. • the mass market, build extensive distribution, and reduce
sales promotion to take advantage of heavy consumer
demand.
• 4) Maturity stage
• At this stage, competitive pressures will increase, sales
growth slows down, it is characterised by peak sales,
high profits, number of competitors is stable and begins
declining, high customer acceptance (low cost per
customer), middle majority customers.
• Operations objective;
• Maximise profits while defending market share
• Strategies:
• Brand the product to differentiate it from competitors and set
a competitive price
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35. • Design improvement to both the product and process,
Increase advertising techniques to maintain interest and
market share, minimise new investments, build more
intensive distribution, diversify brands and models,
increase promotion to encourage brand switching.
• 5) Decline stage
• This is where the sales of a product decline or reduce.
• Characteristics
• Declining sales, declining number of competitors, low
cost per customer, declining profits.
• Operations objective
• Reduce expenditure and strengthen the brand.
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36. • Strategies
• Phase out weak products and items
• Reduce advertising to the level needed to retain
hardcore loyal customers, reduce price, be selective in
distribution and phase out unstable outlets, and reduce
sales promotion to minimum levels.
• NOTE
• Not all products go thru these stages during their life
cycle.
• Wide variations exist in the length or time a particular
product takes to pass through a given stage of the life
cycle.
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37. Design of production Systems
• This is the preliminary stage of the production process. It
is the art of planning, or creating systems for production
and provision of products and services. In designing
systems for both services and products, various factors
have to be considered and these include:
 Capital requirements
 Required skills for the design of the programme
 Product design
 Demand for the product or service
 Safety requirements etc.
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38. Classification of products in the production design system
• The process or production design system involves the
collecting of human resource, machinery and other factors of
production and organizing them in a process to produce the
needed services or products.
• In designing such a process, products can be classified as
follows:
i) Customized products
These are specifically designed to the specifications and
needs of the clients. Emphasis is placed in uniqueness,
quality, and dependability especially on time of delivery and
flexibility of the process to accommodate the different
clients.
ii) Standardized products
Are uniform products and are readily available in the
inventory. Their prices are also pre determined 38

39. Types of production systems
• Process focused:
• Under this type, the products, people and all other
resources are organised according to the process of
production. The individual product requirements
dictate the flow of the items being processed. The
process-focused system is suitable for customized
products.
• Product focused
• Under this, the products, people and other resources
are organised according to the products to be
produced. This system is suitable for standardized
products.
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40. stages of designing a production system
1. Forming an organizing/ design team
• Designing is more effectively carried in a team than as an
individual. Because of increasing complexity of technology,
customer requirements, material specifications coupled with
speed of development; there is need for teamwork. The
design team can be internal e.g. comprising of the employees
or it may be external i.e. consisting of consultants.
2. Setting objectives
• These are the objectives of designing a production or
operation system and they should be well designed. Designed
objectives can effectively be determined as a result of a
market survey and customer specifications to come up with a
system that will enable an organisation to produce what will
be required by the customers
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41. 3) Conceptual stage
• Is a stage where all ideas and proposals carefully discussed by
the design team to agree on how the production system
should be set or organized. At this stage the design team and
the marketing function decide on the products to be
produced, the nature of production system requirements,
cost estimates etc.
4) Embodiment stage
• In this stage the design team establishes how the production
system will operate and the necessary requirements for its
operation. The team then tries to match the designed
production system with the product design. The team also
has to establish if the key designed objectives can be met and
then re-examines the possibilities of change if necessary
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42. 5) Detailing
• Here the details in terms of shape, size, materials, costs etc
are set and analyzed to see if they conform to the quality
standards required for the operation system. The success of
this stage depends greatly on how well each of the preceding
stages have been completed particularly in respect of the
information feedback to the design team and the results of
tests and other findings.
6) Pre-production batch stage
• A pre-production batch needs to be successfully made i.e
meeting all the costs, quality criteria and includes any
feedback from the market, the information must then be
evaluated and adjustments made prior to full and normal
production.
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43. 7) Customer feedback
• Designing of a production or operating system
can only be considered if the finalized version
of the system has been in general use for
sometime and the feedback from the
customers carefully analyzed and forwarded
to the appropriate departments of the
organization.
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44. Reading assignment one
• Make notes on variety management and its
importance.
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45. The end. Thank you
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