CHAPTER 4

GOODS AND SERVICE

DESIGN
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LEARNING OBJECTIVES
Describe the steps involved in designing goods and services.

Explain the concept and application of quality function deployment.

Describe how the Taguchi loss function, reliability, design for

manufacturability, and design for sustainability are used for designing

manufacturing goods.

Explain the five elements of service encounter design.

Describe the four elements of service encounter design.

STEPS INVOLVED IN DESIGNING GOODS AND
SERVICES
STEPS 1 AND 2 STEP 3

STRATEGIC MISSION

CUSTOMER BENEFIT

ANALYSIS AND

COMPETITIVE
PACKAGE DESIGN AND

PRIORITIES CONFIGURATION

Based on:

◦ A solid understanding of customer needs and target markets

◦ The value that customers place on time, place, information,
entertainment, exchange, and form
STEPS INVOLVED IN DESIGNING GOODS
AND SERVICES
STEP 4

DETAILED GOODS, SERVICES,

AND PROCESS DESIGN

STEP 5 STEP 6

Market
Marketplace
Introduction/Deployment Evaluation
 Quality Function Deployment (QFD)

Guides the design, creation, and marketing of goods and services by

integrating the voice of the customer into all decisions.

Applied to a specific manufactured good or service, or to the entire

customer benefit package.

Voice of the customer: Customer requirements as expressed in

customers’ own terms.

 EXAMPLE:
House of Quality
 Tolerance Design and the Taguchi loss Function

Taguchi measured quality as the variation from the target value of

a design specification and then translated that variation into an

economic "loss function"

Design for Reliability

Reliability - is a probability that is a value between 0-1

Design for Manufacturability
Design for Manufacturability (DFM) is the process of designing a
product for efficient production at a higher level of quality

Product Simplification
It is the process trying to simplify designs to complexity and cost thus
improving productivity, quality, flexibility and customer satisfaction

Design for Sustainability

Design for environment (DfE) is the explicit consideration of

environmental concerns during the design of goods, services,

and includes such practices as designing for recycling and

disassembly.
 SERVICE-DELIVERY SYSTEM

DESIGN ELEMENTS

Facility location
◦ Affects a customer’s travel time
◦ Important competitive priority in a service business

Facility layout
◦ Affects process flow, costs, and customer perception and satisfaction
 SERVICE-DELIVERY SYSTEM DESIGN ELEMENTS

SERVICESCAPE
TYPES

◦Physical evidence that a customer ◦ Lean servicescape

uses to form an impression. environments
◦Provides the behavioral setting ◦ Elaborate servicescape
where service encounters take place environments
◦Principal dimensions - Ambient
conditions, spatial layout and
functionality, and signs, symbols,
and artifacts.
 SERVICE PROCESS

DESIGN

Process of developing an efficient sequence of

activities to satisfy internal and external customer

requirements

Technology and information support systems

◦Ensure speed, accuracy, customization, and
flexibility in designing services
 SERVICE-ENCOUNTER DESIGN
Focuses on the interaction, directly or indirectly, between the service provider(s)

and the customer.

Elements
◦ Customer contact behavior and skills
◦ Service provider selection, development, and empowerment
◦ Recognition and reward
◦ Service recovery and guarantees
CUSTOMER CONTACT BEHAVIOR AND SKILL

CUSTOMER CONTACT

Physical or virtual presence of

Types
customers in the service delivery

system during a service

◦ High-contact systems
experience ◦ Low-contact systems
Measured by the percentage of

time customers must be in the

system relative to the total time it

takes to provide the service

 CUSTOMER-CONTACT REQUIREMENTS

Measurable performance
Include:
levels that define the
◦ Response time
quality of customer
◦ Service management

skills such as cross-selling

contact with

other services
representatives of an
◦ Behavioral

organization. requirements
SERVICE-PROVIDER SELECTION, DEVELOPMENT,

AND EMPOWERMENT

Focus on meeting and exceeding customer expectations.

Empowerment:
Gives people the authority to:
◦ Make decisions based on intuition
◦ Control their work
◦ Take risks and learn from mistakes
◦ Promote change
 RECOGNITION AND REWARD

Help motivate and retain excellent service providers.

Key motivational factors:

◦ Recognition
◦ Advancement
◦ Achievement
◦ Nature of the work
◦ Good compensation system
 SERVICE GUARANTEE AND RECOVEY

Promise to reward and compensate a customer if a service upset occurs

during the service experience.

Service upset: Problem that a customer faces with the service delivery

system.
◦ Referred to by terms such as service failure, error, defect, mistake, and
crisis
 SERVICE GUARANTEE
TYPES

EXPLICIT SERVICE GUARANTEE IMPLICIT GUARANTEE

◦Given in writing ◦Not given in writing

◦Included in service provider
◦Implied in everything a service

publications and advertisements provider does

 SERVICE RECOVERY

Steps
PROCESS OF
◦ Begin immediately after a service upset occurs.

CORRECTING A

◦ Document the process and train employees to use

them
SERVICE UPSET AND
◦ Listen to the customer and respond
sympathetically.
SATISFYING

◦ Resolve the problem quickly, provide an apology,

CUSTOMERS and offer compensation if necessary.
 THANK YOU!

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