Goods and

Service Design
By: Weezie Kay O. Manucan
And
Bernie Joseph A. Jiao
How important are design and
style in your purchasing
decisions?
 Designing Goods and Services
O To design and improve goods and
services, most companies use some
type of structured process. Generally,
the design of both goods and services
follow a similar path
Figure 1:Integrated
Framework for Good
and Service Design
 2. Robust Design and the
Taguchi Lost Function

Robust goods that are sensitive to

external sources of variations.

Robust design is an engineering

methodology for improving productivity
during research and development so that
high-quality products can be produced
quickly and at low cost
Taguchi Quality Loss
Function

Genichi Taguchi
- a Japanese engineer who
made numerous
contributions to the field of
quality management,
explained the economic
value of reducing variation
in manufacturing.
 Taguchi Loss Function Definition
Taguchi defines Quality as the loss imparted by the
product to society from the time the product is shipped.

LOSS = Cost to operate, Failure to function, maintenance

and repair cost, customer satisfaction, poor design.

Product to be produced being within specification

Taguchis loss function explains that quality does not
suddenly plummet and private and social costs do not rise
suddenly when products are not in conformance to
specifications. Instead, the losses to the manufacturer and
the society are a function of the deviance or variability
from the target value or best quality level. The private and
social loss is zero at the target value, and the losses
gradually increase as the product specifications deviate
from the target value.
3. Reliability
- Is the probability that a manufactured good, piece of equipment, or
system performs its intended function for a stated period of time under
specified operating conditions.

-Generally defined as the ability of a product to perform as expected

over time

- Formally defined as the probability that a product, piece of equipment,

or system performs its intended function for a stated period of time
under specified operating conditions
4. Quality Function Deployment

Is both a philosophy and a set of planning and

communication tools that focuses on customer
requirements in coordinating the design,
manufacturing and marketing of good or
services.

Customer requirements, as expressed in the

customers own terms, are called the voice of
the customers.
The House of Quality

Interrelationships

Technical Requirements

Customer
Voice of the Customer Relationship Matrix Competitive
Requirement
Evaluation
Priorities

Technical Requirement
Priorities
 5. Product and Process Design in Manufacturing

Prototype Testing - process by which a model (real

or simulated) is constructed to test the goods physical
properties or use under actual operating conditions as
well as consumer reactions to prototypes.
5.1 Quality Engineering - refers to a process of designing
quality into a manufactured good based on a prediction of
potential quality problems prior to production.

Value Engineering - refers to cause avoidance or cost

prevention before the good or services is created.
Value Analysis - refers to cost reduction of the
manufactured good or services process

Failure - mode - and - effects - analysis (FMEA)

- is a technique in which each component of a
product is listed along with the way it may fail, the
cause of failure, the effect or consequence of failure
and how it can be corrected by improving the design.
5.2 Product and Process Simplification

- is the process of trying to simplify designs to

reduce complexity and cost and thus improve
productivity, quality, flexibility and customer
satisfaction.
5.3 Designs for Environmental Quality

Green Manufacturing or Green Practices - a focus on

improving the environment by better good or service design

Design for Environment (DfE) - is the explicit consideration of

environmental concerns during the design of goods, services, and
processes and include such practices as designing for recycling and
disassembly.
Service Design
How important is the
uniqueness of service in your
purchasing decisions?
-Performed -Rendered -Not a Thing -Intangible, physically possessed

-Dynamic and a living process -The raw materials of service is time and
motion

-Not something built in a factory, shipped to a store and put on a shelf

and taken home by a consumer
 I. Service Delivery Design
O Includes facility location and layout, the
servicescape, service process and job
design, technology and information support
systems and organizational structure
 Facility Location and Layout

O Location affects a
customers travel time and
is an important
Competitive priority in a
service business.
O Any type of service
depends on good location
decisions.
 Servicescapes
O The physical evidence a
customer might use to form an
impression. The servicescape
also provides the behavioral
setting where service
encounter take place.
 Three Principal dimensions of
Servicescapes
O Ambient conditions- made
manifest by sight, sound,
smell, touch and
temperature. These are
designed into a
servicescape to please
the five human senses.
 Three Principal dimensions of
Servicescapes
O Spatial Layout and
Functionality- how furniture,
equipment and office
spaces are arranged. This
includes facades, parking
spaces, footprints and etc.
 Three Principal dimensions of
Servicescapes
O Signs, Symbols and artifacts-
the more explicit signals that
communicate an image about
the firm
 Types of Servicescapes:
O Lean Servicescape Elaborate Servicescape
Environment- very simple environment- more
and provide services from complicated design and
one simple design. service system.
 Service Process and Job Design

O Is the activity of
developing an efficient
sequence of activities to
satisfy both internal and
external customer
requirements
 Technology and Information Systems
O Hard and soft technology is
an important factor in
designing services to ensure
speed, accuracy,
customization and flexibility.
 Organizational Structure
O The performance of a service
delivery system depends on how
work is organized.
O Process based organization is
vital to a good service design
because services are generally
interdisciplinary and cross
functional.
 II. Service Encounter Design
O Focuses on the interaction. Directly or indirectly
between the service providers and the customers.
O During these points of contact with the customer
that the perceptions of the firm and its goods and
services are created
O The principal elements of service encounter design
are: a. Customer contact behavior and skills, b.
Service provider selection, development and
empowerment, c. Recognition and reward and d.
Service recovery and guarantee.
 II. Service Encounter Design
OService encounter design and job
design are frequently done in iterative
improvement cycles.
OThese elements are necessary to
support excellent performance and
create customer value and satisfaction.
 Customer contact behavior skills
O Customer contact-refers to the physical or virtual presence of
the customer in the service delivery system during a service
experience.
O Systems in which the percentage( percentage of time the
customer must be in the system relative to the total time it takes
to provide the service) is high are called high contact systems.
Examples are Estate Planning, Hotel check in and etc. While low
percentage are called low contact systems. Examples are
Construction Services, Distribution and etc.
 Customer contact behavior skills
O Customer Contact requirements- are measurable
performance levels or expectations that define the
quality of customer contact with representative of the
organization.
O --> Includes technical requirements as response
time(answering phone calls in 2 rings)
O -->Service Management skills
Customer contact behavior skills
 Service-Provider Selection, Development

O Carefully select customer

contact employees, train
them well and empower
them to meet and exceed
customer expectations.
 Empowerment
O Empowerment simply means
giving people authority to
make decision based on
what they feel is right, to
have control over their work,
to take risks and learn from
mistakes and promote
change.
 Recognition and Rewards
O After hiring, training and empowering the next challenge is how to
motivate and keep them.
O According to research motivational factors includes recognition,
advancement, achievements, rewards and promotions.
O A good compensation system can help to attract, retain and
motivate employees.
 Service Recovery and Guarantee
O Despite all efforts to satisfy customers, every business
experience unhappy customers. These can adversely
affect business if not dealt properly.
O This involves Service Upsets, Service Recovery and
Service Guarantee
 Service Upsets
O is any problem a customer
has. Either real or
perceived with the service
delivery system and
includes term such as
service failure, error,
defect, mistake or crisis.
 Service Recovery
O is the process of
correcting a service
upset and satisfying
customer
 Service Guarantee
O is a promise to reward and
compensate a customer if a
service upset occurs during the
service experience.
Questions?
?