Ch. 4 Product and Service Design
STUDY OUTLINE FOR CHAPTER 4
PRODUCT and SERVICE DESIGN
1. Why is product or service design strategically important?
For the success and prosperity of an organization. It has an impact on future activities. Consequently decisions in this area of the most fundamental that managers must make.
2. List some of the things that product and service design does.
1) Translates customer wants and needs into product and service requirements. (marketing, operations)
2) Develop new products and services. (marketing)
3) Formulate cost targets (accounting, finance, operations)
4) Document specifications
3. Give a few examples for each of these major reasons for design or redesign:
Economic- low demand, excessive warrant claims, the need to reduce cost
Social and Demographic- aging baby boomers, population shifts
Political, liability, legal- government changes, safety issues, new regulations
Competitive- new or changed products or services, new advertising/promotions
Cost or availability- of raw materials, components, labor, water, energy
Technological- in product components, processes
4. What are the key questions of product and service design?
1) Is there a demand for it? What is the potential size of the market, and what is the expected demand profile (long/short term, will it grow slowly/quickly?
2) Can we do it? Do we have the necessary knowledge, skill, equipment, capacity, and supply chain capability? For products, this known as MANUFACTURABILITY; for services, this is known as SERVICEABILITY. Also, is outsourcing some or all of the work an option?
3) What level of quality is appropriate? Customers expect? What level of quality do competitors provide for similar items? How would it fit with our current offerings?
4) Does it make sense from an economic standpoint? What are the potential
PRODUCT and SERVICE DESIGN
1. Why is product or service design strategically important?
For the success and prosperity of an organization. It has an impact on future activities. Consequently decisions in this area of the most fundamental that managers must make.
2. List some of the things that product and service design does.
1) Translates customer wants and needs into product and service requirements. (marketing, operations)
2) Develop new products and services. (marketing)
3) Formulate cost targets (accounting, finance, operations)
4) Document specifications
3. Give a few examples for each of these major reasons for design or redesign:
Economic- low demand, excessive warrant claims, the need to reduce cost
Social and Demographic- aging baby boomers, population shifts
Political, liability, legal- government changes, safety issues, new regulations
Competitive- new or changed products or services, new advertising/promotions
Cost or availability- of raw materials, components, labor, water, energy
Technological- in product components, processes
4. What are the key questions of product and service design?
1) Is there a demand for it? What is the potential size of the market, and what is the expected demand profile (long/short term, will it grow slowly/quickly?
2) Can we do it? Do we have the necessary knowledge, skill, equipment, capacity, and supply chain capability? For products, this known as MANUFACTURABILITY; for services, this is known as SERVICEABILITY. Also, is outsourcing some or all of the work an option?
3) What level of quality is appropriate? Customers expect? What level of quality do competitors provide for similar items? How would it fit with our current offerings?
4) Does it make sense from an economic standpoint? What are the potential