OM/U2 Topic 2 Product and Service Design

The starting point for any business or organization is to cater to the desires or wants of humans (like us), which keep changing with time, cultural changes and any developments in a country. For example, demand for different cell phones or choice of network connectivity. Human wants are characterized with wants or desires which are multiple and grow continuously, while businesses cater to these wants, can provide (potential) satisfaction, can create employment opportunities and can improve the standard of living. Accordingly, organizations conduct thorough planning on producing or servicing a product or service thus preparing a suitable design reflective of their customers’ wants or desires. Key basic principles followed by organizations which translate customers’ wants or desires that can cater to or create demand for product or service includes the following:

  1. Refine existing products/services: Based on recommendations or changes suggested by customers’ in accordance to the changing tastes and preferences could lead businesses to change or improve existing products
  2. Develop new products/services: Businesses can develop new products or services in accordance to changes in technology, tastes and preferences and develop or create new products/services (Refer to Demand-pull and Invention-Push Innovations)
  3. Formulate quality goals: Organizations should plan quality standards, assurances and specifications to create quality-driven products/services
  4. Construct prototypes for trials and tests: To target towards the right audience, specifications for trials and testing of products/services should be maintained (and mentioned)
  5. Create document specifications: Documentation of production and operations related activities should be maintained by the organization
  6. Translate product/service specification into process specifications: Documentation of product/services in accordance to their usage and utility should be provided by the organizations
  7. Formulate Cost targets: With reference to the above mentioned points, organizations should take costs into consideration for identifying relevant risks, benefits or consequences.

Design for a product and service can be created innovatively based on “Demand-Pull” or “Invention-Push” theories. Demand-pull theories emerged from innovation studies conducted in Europe during the 1960s. Demand-pull studies have characterized with conducting Research and Development (R&D) and improving project management. These two characteristics enabled understanding the needs of the customers and implementing manageable and measurable business practices, which encouraged efficiency during production (or provisions) and were further marketed as per the needs of the market. Alternatively, invention-push (also known as technology push) pushed a new invention through R&D, production, sales functions onto the market without considering whether it satisfies a customer’s need. The origins of technology push can be linked with the Austrian economist, Joseph Schumpeter who argued that development was the result of innovative ability of the entrepreneur and the introduction of new methods of production. (Identify real-life examples for demand-pull and invention-push)

Design Choices

There are significant differences between product and service design. Service design is an intangible aspect while product design is tangible. Services are generally created and delivered at the same time and cannot be held in inventory like actual products. Also, services are relatively visible to customers than products (with reference to actual production). Based on the requirements or innovations introduced in the market there are multiple design choices in products and services available for entrepreneur/s.

Choices in Product Design include

  1. Standardization: The process of developing and implementing standards to produce or provide a particular product or service is called standardization. Accordingly, standardization involves establishing and formalizing guidelines to interact with people and/or to bring about modernization, centralization and/or homogenization of products/services
  2. Customization: A process involved to make or alter something as per the customers’ needs and requirements is called customization. In addition, a large-scale system that produces these customized products/services is called mass customization (Are Apple products mass customized or simply customized?). These processes include producing multiple product items in large-scale to cater to needs of different customers. (Any resemblance with the automobile or food industry?)
  3. Delayed Differentiation: A generic or family product that is later differentiated into a specific end-product is called delayed differentiation or postponement. For example, knitted sweaters by Benetton were initially white and then dyed into different colours only as per changes in seasons or customer preferences. Another example, colour of iPods, different apps in existing mobile phones, etc.
  4. Modular Design: Modular design is to organise a complex system as a set of distinct components that can be developed independently and then plugged together. For example, a personal computer consists of a monitor, CPU, keyboard, mouse and other accessories whose functionalities are different but are connected together for its relevant use. Similarly, an organisational set up can also have complex systems like a hydro-electric set up has complex components like the dam with water-run turbines generating heat in generators, transformed into transformers (that are separate units placed at a designated place away from the turbines) to create electricity in different voltages.
  5. Robust Design: This design was formulated by Dr. Genichi Taguchi who defined it as a process that reduces variation in a product without eliminating the causes of the variation (also referred to as noise). There are three types of variations – Internal, external and unit-to-unit variations. Internal variation can be caused due to wear and tear of a machine and aging of materials whereas external variation can be caused by factors relating to environmental conditions such as temperature, humidity and dust and unit-to-unit variation are variations caused in between certain processes like variations in material, processes and equipment. (Identify examples from your projects and explain?)

Choices in service design are based on communication and interaction with individuals supported by relevant media tools like newspapers, television, radio, Internet, face-to-face interactions, etc. Key factors that influence communication and interaction in services are the degree of variation and degree of customer contact. Degree of variation refers to the potential deviations in requirements of customers while degree of customer contact determines the level of standardization required in a service to be able cater to the needs of diverse type of customers (in terms of demographic characteristics, socio-economic environment, technology adaptation, etc).

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