Transcript Chapter 3
Products and Services
To Accompany Russell and Taylor, Operations Management, 4th Edition,
2003 Prentice-Hall, Inc. All rights reserved.
Design of Products
Humor in Product Design
As the customer wanted it.
As Marketing interpreted it.
© 1984-1994 T/Maker Co .
As Operations made it.
© 1984-1994 T/Maker Co .
As Engineering designed it.
© 1984-1994 T/Maker Co.
© 1984-1994 T/Maker Co.
What is a Product?
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Need-satisfying offering of an organization
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Example
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P&G does not sell laundry detergent
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P&G sells the benefit of clean clothes
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Customers buy satisfaction, not parts May be a good or a service
Product and Service Design
Major factors in design strategy
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Cost
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Quality
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Time-to-market
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Customer satisfaction
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Competitive advantage
Product and service design – or redesign – should be closely tied to an organization’s strategy
Product or Service Design Activities
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Translate customer wants and needs into product and service requirements
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Refine existing products and services
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Develop new products and services Formulate quality goals
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Formulate cost targets Construct and test prototypes Document specifications
Product Life Cycle, Sales, Cost, and Profit
Cost of Development & Manufacture Sales Revenue Cash flow Profit
Loss
Introduction Growth Maturity Decline Time
Products in Various Stages of Life Cycle
Sales Introduction Growth
CD-ROM Internet
Maturity Decline
Jet Ski, fax machines Flat screen monitors Boeing 727 3 ½ Floppy disks
Time
Degree of Newness of a Product/Service
1.Modification of an existing product/service 2.Expansion of an existing product/service 3.
Clone of a competitor’s product/service 4.New product/service
Degree of Design Change Type of Design Change Modification Expansion Clone New Newness of the organization Low Low High High Newness to the market Low Low Low High
Trends in Product & Service Design (1 of 2)
Increased emphasis on or attention to:
Customer satisfaction (by translating customer wants and needs into product and service requirements)
Reducing time to introduce new product or service
Reducing time to produce product
Trends in Product & Service Design (2 of 2)
Increased emphasis on or attention to:
The organization’s capabilities to produce or deliver the item
Refining existing products and services
Environmental concerns
Designing products & services that are “user friendly”
Designing products that use less material
Why Companies Design New Products and Services
To be competitive
To increase business growth and profits
To avoid downsizing with development of new products
To improve product quality
To achieve cost reductions in labor or materials
Main Reasons for Product or Service Design
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Economic
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Social and demographic
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Political, liabili
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Cost or availability
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Competitive
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Technological
Objectives of Product and Service Design
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Main focus
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Customer satisfaction Secondary focus
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Function of product/service
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Cost/profit
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Quality
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Appearance
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Ease of production/assembly
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Ease of maintenance/service
An Effective Design Process
Matches product/service characteristics with customer needs
Meets customer requirements in the simplest, most cost-effective manner
Reduces time to market
Minimizes revisions
Few Successes
2000 Number of Ideas 1750 1500 1000 500 0 Market requirement 1000 Functional specifications 500 Design review, Testing, Introduction Product specification 100 25 One success!
Development Stage
Stages in the Design Process
1. Idea Generation — Product Concept 2. Feasibility Study — Performance Specifications 3. Preliminary Design — Prototype 4. Final Design — Final Design Specifications 5. Process Planning — Manufacturing Specifications
The Design Process
Idea generation Product or service concept Feasibility study Suppliers Customers Marketing R&D Competitors New product or service launch Final design & process plans Performance specifications Form design Functional design Revising and testing prototypes Design specifications Production design Manufacturing or delivery specifications Pilot run and final tests
Step 1: Idea Generation
Suppliers, distributors, salespersons, competitors Trade journals and other published material Warranty claims, customer complaints, failures Customer surveys, focus groups, interviews Field testing, trial users Research and development
Research & Development (R&D)
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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 .
More Idea Generators
Perceptual Maps Visual comparison of customer perceptions Benchmarking Comparing product/service against best-in-class Reverse engineering Dismantling and inspecting a competitor’s product to discover product improvements
Perceptual Map of Breakfast Cereals (1 of 2)
GOOD TASTE LOW NUTRITION HIGH NUTRITION BAD TASTE
Perceptual Map of Breakfast Cereals (2 of 2)
GOOD TASTE Cocoa Puffs LOW NUTRITION Rice Krispies BAD TASTE Wheaties Cheerios HIGH NUTRITION Shredded Wheat
Step 2: Feasibility Study
Market Analysis
Economic Analysis
Technical / Strategic Analysis Performance Specifications are written for product concepts that pass the feasibility study
Step 3: Preliminary Design
Create form & functional design
Build prototype
Test prototype
Revise prototype
Retest
3.1. Form Design (How the Product Looks)
Cellular Personal Safety Alarm Personal Computer
3.2. Functional Design (How the Product Performs )
Reliability: The ability of a product, part or system to perform its intended function under a prescribed set of conditions over a specified length of time. It is expressed as the probability that the product performs intended function for a specified length of time
Normal Operating Conditions
: the set of conditions under which an item’s reliability is specified
Maintainability: Ease and/or cost of maintaining/ repairing product
How to improve Reliability
Component design
Production/assembly techniques
Testing
Redundancy/backup
Preventive maintenance procedures
User education
System design
3.3. Production Design
Part of the preliminary design phase
Simplification Standardization Mass customization
3.3.1. Design Simplification (1 of 3)
(a) The original design Assembly using common fasteners
3.3.1. Design Simplification (2 of 3)
(b) Revised design (a) The original design Assembly using common fasteners One-piece base & elimination of fasteners
3.3.1. Design Simplification (3 of 3)
(a) The original design (b) Revised design (c) Final design Assembly using common fasteners One-piece base & elimination of fasteners Design for push-and-snap assembly
3.3.2. Standardization
Standardization
Extent to which there is absence of variety in a product, service or process
Standardized products are immediately available to customers
Advantages of Standardization (1 of 2)
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Fewer parts to deal with in inventory & manufacturing
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Design costs are generally lower
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Reduced training costs and time
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More routine purchasing, handling, and inspection procedures
Advantages of Standardization (2 of 2)
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Orders fillable from inventory
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Opportunities for long production runs and automation
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Need for fewer parts justifies increased expenditures on perfecting designs and improving quality control procedures.
Disadvantages of Standardization
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Designs may be frozen with too many imperfections remaining.
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High cost of design changes increases resistance to improvements.
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Decreased variety results in less consumer appeal.
3.3.3. Mass Customization
Mass customization: A strategy of producing basically standardized goods or services, but incorporating some degree of customization by:
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Delayed differentiation
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Modular design
3.3.3.1. Delayed Differentiation
Delayed differentiation is a postponement tactic
Producing but not quite completing a product or service until customer preferences or specifications are known
3.3.3.2. Modular Design
Modular design is a form of standardization in which component parts are subdivided into modules that are easily replaced or interchanged. It allows:
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easier diagnosis and remedy of failures
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easier repair and replacement
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simplification of manufacturing and assembly And it adds flexibility to both production and marketing
Steps 4&5: Final Design & Process Plans
Produce detailed drawings & specifications
Create workable instructions for manufacture
Select tooling & equipment
Prepare job descriptions
Determine operation & assembly order
Program automated machines
Improving the Design Process
Design teams & concurrent design
Design for manufacture & assembly
Design for disassembly
Design to prevent failures and ensure value
Design for environment
Measure design quality
Utilize quality function deployment
Utilize Computer Aided Design
Design for robustness
Engage in collaborative design
Organizing for Product Development (1 of 2)
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Historically – distinct departments
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Duties and responsibilities are defined
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Difficult to foster forward thinking Today – team approach
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Representatives from all disciplines or functions
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Concurrent engineering – cross functional team
Organizing for Product Development (2 of 2)
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Traditional Approach
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“We design it, you build it” or “Over the wall”
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Concurrent Engineering
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“Let’s work together simultaneously
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“Over the Wall” Approach
New Product
Mfg Design
Breaking Down Barriers to Effective Design
Design Teams
Marketing, manufacturing, engineering
Suppliers, dealers, customers
Lawyers, accountants, insurance companies
Concurrent Engineering
Defined
Concurrent engineering is the bringing together of personnel from various functions together early in the design phase. CE can be defined as the simultaneous development of project design functions, with open and interactive communication existing among all team members for the purposes of reducing time to market, decreasing cost, and improving quality and reliability Time savings are created by performing activities in parallel
Concurrent Design
Improves quality of early design decisions
Scheduling and management can be complex as tasks are done in parallel
Design for Manufacture and Assembly
Design a product for easy & economical production
Incorporate production design early in the design phase
Taking into account the manufacturing capabilities of the organization in designing goods
The more general term “design for operations” encompasses services as well as manufacturing
Improves quality, productivity and reduces costs
Shortens time to design and manufacture
DFM Guidelines
1. Simplify products by reducing the number of separate parts 2. Minimize the number of parts, tools, fasteners, and assemblies 3. Use standard parts and repeatable processes 4. Design parts for many uses 5. Incorporate modularity in design 6. Design for ease of assembly, minimal handling 7. Allow for efficient testing and parts replacement
Design for Assembly (DFA)
Procedure for reducing the number of parts
Evaluate methods for assembly
Determine the sequence of assembly operations
Design for Disassembly
Designing products so that they can be more easily taken apart.
Includes fewer parts and less material and using snap-fits where possible instead of screws or nuts and bolts
Value Analysis/Value Engineering (VA/VE) ( 1 of 4)
Achieve equivalent or better performance at a lower cost while maintaining all functional requirements defined by the customer
Ratio of value / cost
Value analysis focuses on design improvements during production
Value Analysis/Value Engineering (2 of 4)
Assessment of value : 1. Can we do without it?
2. Does it do more than is required 3. Does it cost more than it is worth?
4. Can something else do a better job 5. Can it be made by less costly method, tools, material?
6. Can it be made cheaper, better or faster by someone else?
7. Does the item have any design features that are not necessary?
8. Can two or more parts be combined into one?
Benefits of VA/VE (3 of 4)
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Benefits:
simplified products
additional standardization of products
improved functional aspects of product
improved job design and job safety
improved maintainability of the product
robust design
Cost Reduction of a Bracket via Value Engineering (4 of 4)
Design for Environment
Design safe and environmentally sound (eg. recyclable) products
Design from recycled material
Use materials which can be recycled
Design for ease of repair
Minimize packaging
Minimize material & energy used during manufacture, consumption & disposal
Recycling: Recovering materials for future use
“Green Manufacturing”
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Make products recyclable Use recycled materials Use less harmful ingredients Use lighter components Use less energy Use less material
Design for Environment
Quality Function Deployment (QFD)
QFD is an approach that integrates the “voice of the customer” into the product and service development process. Translates customer preferences into specific product characteristics
Enables to design for the customer
Displays requirements in matrix diagrams
First matrix called “house of quality”
Series of connected houses
Quality Function Deployment Process
Identify customer wants
Identify how the good/service will satisfy customer wants
Relate customer wants to product hows
Identify relationships between the firm’s hows
Develop importance ratings
Evaluate competing products
House of Quality
1 Customer requirements 5 Correlation matrix 3 Design requirements 4 Relationship matrix 2 Competitive assessment 6 Target values
House of Quality Example
Engineering Characteristics Customer Requirements Easy to close Stays open on a hill Easy to open Doesn’t leak in rain No road noise Importance weighting 7 5 3 3 2 10 X X 6 Target values X 6 X X 9 2 3 Correlation: X * Strong positive Positive Negative Strong negative Competitive evaluation X = Us A = Comp. A B = Comp. B (5 is best) 1 2 3 4 5 X AB X AB XAB A X B X A Relationships: Strong = 9 Medium = 3 Small = 1 B Technical evaluation (5 is best) 5 4 3 2 1 B A X BA X B A X B X A BXA BA X
Customer requirements information forms the basis for this matrix, used to translate them into operating or engineering goals.
Technology in Design: Computer Aided Design (CAD)
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Designing products at a computer terminal or work station
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Design engineer develops rough sketch of product
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Uses computer to draw product Often used with CAM
© 1995 Corel Corp.
Benefits of CAD
Produces better designs faster
Builds database of designs and creates documentation to support them
Shortens time to market
Reduces time to manufacture
Enlarges design possibilities
Enhances communication and promotes innovation in design teams
Provides possibility of engineering and cost analysis on proposed designs
Design for Robustness
Product can fail due to poor design quality
Products subjected to many conditions
Robust Design results in products or services that can function over a broad range of conditions
A robust product is to be designed that is insensitive to environmental factors either in manufacturing or in use
Robust design studies
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Controllable factors -
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under designer’s control Uncontrollable factors - from user or environment
Design products for consistent performance
Consistency is Important
Consistent errors are easier to correct than random errors
Parts within tolerances may yield assemblies which aren’t
Consumers prefer product characteristics near their ideal values
Remanufacturing
Refurbishing used products by replacing worn out or defective components and reselling the products.
Reverse Engineering
Reverse engineering is the dismantling and inspecting of a competitor’s product to discover product improvements.
The Kano Model
Kano Model
Excitement Expected Must Have
Customer Needs
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
Design Guidelines (1 of 2)
Produce designs that are consistent with the goals of the company
Take into account the operations capabilities of the organization in order to achieve designs that fit with those capabilities
Take into account the cultural differences related to product design (for multinationals)
Give customers the value they expect
Make health and safety a primary concern
Consider potential harm to the environment
Design Quidelines (2 of 2)
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Increased emphasis on components commonality Package products and services Use multiple-use platforms Consider tactics fodr mass customization Look for continual improvement Shorten time to market
Design of Services
Characteristics of Services (1 of 2)
1. Services are acts, they are intangible but highly visible to the customers 2. Services are idiosyncratic 3. Services are created and delivered at the same time and are not consumed but experienced, cannot be inventoried.
4. Service requirements are variable 5. Service have customer contact 6. Services are perishable
Characteristics of Services (2 of 2)
7. Services have low barriers to entry 8. Location is yimportant for service 9. Service inseparable from delivery 1. Tend to be decentralized and dispersed 2. Consumed more often than products 3. Services can be easily emulated
Service Businesses
Defined
A service business is the management of organizations whose primary business requires interaction with the customer to produce the service •
Facilities-based services: Where the customer must go to the service facility
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Field-based services: Where the production and consumption of the service takes place in the customer’s environment
Internal Services
Defined
Internal services is the management of services required to support the activities of the larger organization. Services including data processing, accounting, etc Internal Supplier Internal Customer External Customer Internal Supplier
Differences Between Product and Service Design (1 of 2)
Service design often focuses more on intangible factors
Less latitude in finding and correcting errors before the customer, so training & process design are important
As services are noninventoriable, capacity issues are very important
Differences Between Product and Service Design (2 of 2)
Services are highly visible to consumers and must be designed with that in mind
Some services have low barriers to entry and exit, so service design has to be innovative and cost-effective
As convenience is a major factor, location is important to service design
Service design with high customer contact generally requires inclusion of the service delivery package
Service Delivery System
Components of service delivery system:
Facilities
Processes
Skills
Service Design
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Service design involves
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The physical resources needed
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The goods that are purchased or consumed by the customer
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Explicit services
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Implicit services
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
Phases in Service Design
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Determine performance specifications Translate performance specifications into design specifications
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Translate design specifications into delivery specifications
Service Systems
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Service systems range from those with little or no customer contact to very high degree of customer contact such as:
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Insulated technical core (software development)
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Production line (automatic car wash)
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Personalized service (hair cut, medical service)
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Consumer participation (diet program)
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Self service (supermarket)
Service-System Design Matrix
High Sales Opportunity Degree of customer/server contact Buffered core (none) Permeable system (some) Reactive system (much) Face-to-face loose specs Face-to-face total customization Face-to-face tight specs Mail contact Internet & on-site technology Phone Contact Low Production Efficiency Low High
Phases in Service Design
1.Conceptualize
2.Identify service package components 3.Determine performance specifications 4.Translate performance specifications into design specifications 5.Translate design specifications into
delivery specifications
Service Blueprinting
Service blueprinting
A method used in service design to describe and analyze a proposed service
A useful tool for conceptualizing a service delivery system
Major Steps in Service Blueprinting
1. Establish boundaries 2. Identify sequence of customer interactions
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Prepare a flowchart 3. Develop time estimates 4. Identify potential failure points
Example of Service Blueprinting
Standard execution time 2 minutes Total acceptable execution time 5 minutes 30 secs Brush shoes Seen by customer Clean shoes 45 secs Line of visibility Not seen by customer but necessary to performance 30 secs Apply polish Buff 45 secs Collect payment 15 secs Fail point Wrong color wax Materials (e.g., polish, cloth) Select and purchase supplies
Service Fail-safing Poka-Yokes (A Proactive Approach)
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Keeping a mistake from becoming a service defect
Task Tangibles •
How can we fail safe the three Ts?
Treatment
Have we compromised one of the 3 Ts?
1. Task 2. Treatment 3. Tangible
Characteristics of a Well Designed Service System (1 of 2)
1. Each element of the service system is consistent with the operating focus of the firm 2. It is user-friendly 3. It is robust and easy to sustain 4. It is structured so that consistent performance by its people and systems is easily maintained
Characteristics of a Well-Designed Service System (2 of 2)
5 . It provides effective links between the back office and the front office so that nothing falls between the cracks 6. It manages the evidence of service quality in such a way that customers see the value of the service provided 7. It is cost-effective 8. It ensures reliability and high quality
Challenges of Service Design
1. Variable requirements 2. Difficult to describe 3. High customer contact 4. Service – customer encounter
Guidelines for Successful Service Design
1. Define the service package 2.
Focus on customer’s perspective 3. Consider image of the service package 4.
Recognize that designer’s perspective is different from the customer’s perspecticve 5. Make sure that managers are involved 6. Define quality for tangible and intangibles 7. Make sure that recruitment, training and rewards are consistent with service expectations 8. Establish procedures to handle exceptions 9. Establish systems to monitor service