Subway Example of Continuous Intermittent Batch

LESSON 3: SERVICE PROCESS DESIGN

1. Strategic Product and Service Design

The essence of a business organization is the products

and services it offers, and every aspect of the

organization and its supply chain are structured around

those products and services. Organizations that have

well-designed products or services are more likely to

realize their goals than those with poorly designed

products or services. Hence, organizations have a

strategic interest in product and service design. Pr o d u ct

o r ser v i ce d esi g n should be closely tied to an

organization's strategy. It is a major factor in cost,

q u al i ty , ti m e - to - m ark et , custo m er sati sfac ti o n , a n d

co m p et i ti v e ad v an tage. Co n s equ entl y, m arke t i n g ,

fi n an ce, o p erati o n s, acc o u n ti n g , IT, an d H R n ee d t o b e

in v o l v ed. Demand forecasts and projected costs are

important, as is the expected impact on the supply chain.

It is significant to note that an important cause of

operations failures can be traced to faulty design.

Designs that have not been well thought out, or

incorrectly implemented, or instructions for assembly or

usage that are wrong or unclear, can be the cause of

product and service failures, leading to lawsuits, injuries

and deaths, product recalls, and damaged reputations.

The introduction of new products or services, or changes

to product or service designs, can have impacts

throughout the organization and the entire supply chain.

Some processes may change very little, while others may

have to change considerably in terms of what they do or

how and when they do it. New processes may have to be

added, and some current ones may be eliminated. New

suppliers and distributors may need to be found and

integrated into the system, and some current suppliers

and distributors may no longer be an appropriate fit.

Moreover, it is necessary to take into account projected

impact on demand as well as financial, marketing, and

distribution implications. Because of the potential for

widespread effects, taking a "big picture" systems

approach early and throughout the design or redesign

process is imperative to reduce the chance of missing

some implications and costs, and to understand the time

it will take. Likewise, input from engineering, operations,

marketing, finance, accounting, and supply chains is

crucial.

This section discusses what product and service

designers do, the reasons for design (or redesign), and

key questions that management must address.

W h a t Does P r od u ct & Se r vic e De si g n Do?

The various activities and responsibilities of

product and service design include the following

(functional interactions are shown in

parentheses):

1. Translate customer wants and needs into

product and service requirements (marketing,

operations)

2. Refine existing products and services

(marketing)

3. Develop new products and/or services

(marketing, operations)

4. Formulate quality goals (marketing, operations)

5. Formulate cost targets (accounting, finance,

operations)

6. Construct and test prototypes (operations,

marketing, engineering)

7. Document specifications

8. Translate product and service specifications into

process specifications (engineering, operations)

Pro d u c t an d ser v i ce d e si g n in v o l v es o r affe cts n ea rl y

ev er y fu n cti o n al ar ea o f an o rg an i z ation. However,

marketing and operations have major involvement.

From a buyer's standpoint, most purchasing decisions

entail tw o fu n d a m ental c o n si d erati ons; one is c o st a n d

the other is qu al i t y o r p erf o r m ance. From the

organization's standpoint, the key questions are:

1. Is there demand for it? What is the potential size

of the market, and what is the expected demand

profile (will demand be long term or short term,

will it grow slowly or quickly)?

2. Can we do it? Do we have the necessary

knowledge, skills, equipment, capacity, and

supply chain capability? For products, this is

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? What do

customers expect? What level of quality do

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Source: https://www.studocu.com/ph/document/lyceum-of-the-philippines-university/operations-management/operations-management-lesson-3-4/18416198

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