Service Design

1. 4 Service Design

2. Learning Objectives • Explain the strategic importance of service design. • List some key reasons for design or redesign. • Identify the main objectives of service design. • Discuss the importance of standardization. • Discuss the importance of legal, ethical, and environmental issues in service design.

3. Learning Objectives • Describe some of the main sources of design ideas. • Name several key issues in service design. • Name the phases in service design. • List the characteristics of well-designed service systems. • Name some of the challenges of service design.

4. Service Design • Major factors in design strategy • Cost • Quality • Time-to-market • Customer satisfaction • Competitive advantage Service design – or redesign – should be closely tied to an organization’s strategy

5. Service Design Activities • Translate customer wants and needs into service requirements • Refine existing services • Develop new services • Formulate quality goals • Formulate cost targets • Construct and test prototypes • Document specifications

6. Reasons for Service Design • Economic • Social and demographic • Political, liability, or legal • Competitive • Cost or availability • Technological

7. Objectives of Service Design • Main focus • Customer satisfaction • Understand what the customer wants • Secondary focus • Function of service • Cost/profit • Quality • Appearance • Ease of service operation

8. Designing For Operations • Taking into account the capabilities of the organization in designing services. • Failure to take this into account can: • Reduce productivity • Reduce quality • Increase costs

9. Legal, Ethical, and Environmental Issues • Legal • FDA, OSHA, IRS • Product / service liability • Uniform commercial code • Ethical • Releasing products with defects • Environmental • EPA

10. Regulations & Legal Considerations • Product Liability - A manufacturer is liable for any injuries or damages caused by a faulty product. • Uniform Commercial Code - Products carry an implication of merchantability and fitness.

11. Designers Adhere to Guidelines • Produce designs that are consistent with the goals of the company • Give customers the value they expect • Make health and safety a primary concern • Consider potential harm to the environment

12. Other Issues in Service Design • Service life cycles • How much standardization • Mass customization • Service reliability • Robust design • Degree of newness • Cultural differences

13. Life Cycles of Services Saturation Maturity Decline Demand Growth Introduction Time Figure 4.1

14. Standardization • Standardization • Extent to which there is an absence of variety in a product, service or process • Standardized services are immediately available to customers

15. Advantages of Standardization • Design costs are generally lower • Reduced training costs and time • More routine purchasing, handling, and inspection procedures • Quality is more consistent

16. Advantages of Standardization (Cont’d) • Opportunities for long production runs and automation • Need for fewer components justifies increased expenditures on perfecting designs and improving quality control procedures.

17. Disadvantages of Standardization • Designs may be frozen with too many imperfections remaining. • High cost of design changes increases resistance to improvements. • Decreased variety results in less consumer appeal.

18. Mass Customization • Mass customization: • A strategy of producing standardized services, but incorporating some degree degree of customization • Delayed differentiation • Modular design

19. Delayed Differentiation • Delayed differentiation is a postponement tactic • Producing but not quite completing a service until customer preferences or specifications are known

20. Modular Design Modular design is a form of standardization in which service component are subdivided into modules that are easily replaced or interchanged. It allows: • easier diagnosis and remedy of failures • easier repair and replacement • simplification of manufacturing and assembly • rapid customization

21. Reliability • Reliability: The ability of a system to perform its intended function under a prescribed set of conditions • Failure: Situation in which a system does not perform as intended • Normal operating conditions: The set of conditions under which an item’s reliability is specified

22. Improving Reliability • Component design • Production/assembly techniques • Testing • Redundancy/backup • Preventive maintenance procedures • User education • System design

23. Robust Design Robust Design: Design that results in services that can function over a broad range of conditions

24. Degree of Newness • Modification of an existing service • Expansion of an existing service • Clone of a competitor’s service • New service

25. Global Product Design • Virtual teams • Uses combined efforts of a team of designers working in different countries • Provides a range of comparative advantages over traditional teams such as: • Engaging the best human resources around the world • Possibly operating on a 24-hr basis • Global customer needs assessment • Global design can increase marketability

26. Phases in Product Development Process • Idea generation • Feasibility analysis • Product specifications • Process specifications • Prototype development • Design review • Market test • Product introduction • Follow-up evaluation

27. Reverse Engineering Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product improvements.

28. Research & Development (R&D) • Organized efforts to increase scientific knowledge or product innovation & may involve: • Basic Research advances knowledge about a subject without near-term expectations of commercial applications. • Applied Research achieves commercial applications. • Development converts results of applied research into commercial applications.

29. Component Commonality • Multiple products or product families that have a high degree of similarity can share components • Automakers using internal parts • Engines and transmissions • Water pumps • Etc. • Other benefits • Reduced training for assemble and installation • Reduced repair time and costs

30. Quality Function Deployment • Quality Function Deployment • Voice of the customer • House of quality QFD: An approach that integrates the “voice of the customer” into the product and service development process.

31. The House of Quality Correlation matrix Design requirements Customer require- ments Relationship matrix Competitive assessment Specifications or target values Figure 4.3

32. Correlation: Strong positive X Positive X X Negative X X X Strong negative * Engineering Characteristics Competitive evaluation Energy needed to close door Check force on level ground Energy needed to open door Accoust. Trans. Window Door seal resistance Water resistance X = Us A = Comp. A Importance to Cust. B = Comp. B Customer Requirements (5 is best) 1 2 3 4 5 AB X Easy to close 7 X AB Stays open on a hill 5 Easy to open 3 XAB A X B Doesn’t leak in rain 3 10 6 6 9 2 3 No road noise 2 X A B Importance weighting Relationships: Strong = 9 Medium = 3 Reduce energy level to 7.5 ft/lb Reduce energy to 7.5 ft/lb. Target values Reduce force to 9 lb. Maintain current level Maintain current level Maintain current level Small = 1 5 BA BA B B BXA X Technical evaluation (5 is best) B 4 X A X A 3 A X 2 X 1 House of Quality Example Figure 4.4

33. Service Design • Service is an act • Service delivery system • Facilities • Processes • Skills • Many services are bundled with products

34. Service Design • Service design involves • The physical resources needed • The goods that are purchased or consumed by the customer • Explicit services • Implicit services

35. Service Design • Service • Something that is done to or for a customer • Service delivery system • The facilities, processes, and skills needed to provide a service • Product bundle • The combination of goods and services provided to a customer • Service package • The physical resources needed to perform the service

36. Differences Between Product and Service Design • Tangible – intangible • Services created and delivered at the same time • Services cannot be inventoried • Services highly visible to customers • Services have low barrier to entry • Location important to service • Range of service systems • Demand variability

37. Service Systems • Service systems range from those with little or no customer contact to very high degree of customer contact such as: • Insulated technical core (software development) • Production line (automatic car wash) • Personalized service (hair cut, medical service) • Consumer participation (diet program) • Self service (supermarket)

38. Service Demand Variability • Demand variability creates waiting lines and idle service resources • Service design perspectives: • Cost and efficiency perspective • Customer perspective • Customer participation makes quality and demand variability hard to manage • Attempts to achieve high efficiency may depersonalize service and change customer’s perception of quality

39. Phases in Service Design • Conceptualize • Identify service package components • Determine performance specifications • Translate performance specifications into design specifications • Translate design specifications into delivery specifications

40. Characteristics of Well Designed Service Systems • Consistent with the organization mission • User friendly • Robust • Easy to sustain • Cost effective • Value to customers • Effective linkages between back operations • Single unifying theme • Ensure reliability and high quality

41. Challenges of Service Design • Variable requirements • Difficult to describe • High customer contact • Service – customer encounter

42. Guidelines for Successful Service Design • Define the service package • Focus on customer’s perspective • Consider image of the service package • Recognize that designer’s perspective is different from the customer’s perspecticve • Make sure that managers are involved • Define quality for tangible and intangibles • Make sure that recruitment, training and rewards are consistent with service expectations • Establish procedures to handle exceptions • Establish systems to monitor service

43. Operations Strategy • Increase emphasis on component commonality • Package products and services • Use multiple-use platforms • Consider tactics for mass customization • Look for continual improvement • Shorten time to market

44. Shorten Time to Market • Use standardized components • Use technology • Use concurrent engineering