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2. 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 manufactured goods

3. Explain the five elements of service delivery system design
Describe the four elements of service encounter design
Explain how goods and service design concepts are integrated at LensCrafters

4. Every design project is a series of trade-offs between:
Introduction
Every design project is a series of trade-offs between:
Technology and functionality
Ambition and affordability
Desires of the people creating the object and needs of the people using it

5. Steps Involved in Designing Goods and Services
Strategic mission and vision
Strategic and market analysis, and understanding competitive priorities
Customer benefit package design and configuration

6. Steps Involved in Designing Goods and Services
Detailed goods, service, and process design
For manufactured goods
Manufactured design and development
Process selection and design
For services
Service and service delivery design
Service encounter design
Market introduction/deployment
Marketplace evaluation

7. Customer-Focused Design
Customer requirements - Wants and needs are reflected through the design of good or service
Voice of the customer: Customer requirements, as expressed in the customer’s own terms
Quality function deployment(QFD): Approach to guide the design, creation, and marketing of goods and services by:
Integrating the voice of the customer into all decisions

8. Building the House of Quality
Determine customer requirements through the voice of the customer (VOC)
Define technical requirements of the product
Determine interrelationships between the technical requirements

9. Building the House of Quality
Relationship matrix defines what technical requirements satisfy VOC needs
Customer priorities and competitive evaluation help select which VOC requirements the product should focus on

10. The House of Quality

11. Tolerance Design
Determining the acceptable tolerance
For manufactured goods, design blueprints specify a target dimension (nominal), along with a range of permissible variation (tolerance)

12. 6.3 Traditional Goal Post View of Conforming to Specifications

13. Taguchi Loss Function
Genichi Taguchi, a Japanese engineer, maintained traditional practice of setting design specifications is flawed
Argument – The smaller the variation about the nominal specification, the better the quality
In turn, products are more consistent, fail less frequently, and will be less costly in the long run

14. Taguchi Loss Function L(x) = k(x – T )2 Where
L(x) - Monetary value of the loss associated with deviating from the target, T
x - Actual value of the dimension
k - Constant that translates the deviation into dollars

15. 6.4 Nominal-Is-Best Taguchi Loss Function

16. Design for Reliability
Reliability: Probability that goods and services performs its intended function for stated period of time under specified operating conditions
Probability - Value between 0 and 1

17. Design for Reliability
Series system - If one component fails, the entire system fails
Reliability of a series system - Product of the individual probabilities of each process in a system
Rs = (p1)(p2)(p3). . . (pn)

18. 6.7 Structure of a Serial System

19. Design for Reliability
Parallel systems - Functions are independent and the entire system will fail only if all components fail
Rp = 1 – (1 – p1)(1 – p2)(1 – p3). . . (1 – pn)

20. 6.8 Structure of a Parallel System

21. Design for Manufacturability (DFM)
Process of designing a product for efficient production at the highest level of quality
Product simplification: Process of trying to simplify designs to reduce complexity and costs
Improves:
Productivity
Quality
Flexibility
Customer satisfaction

22. Design for Sustainability
Design for environment (DfE): Explicit consideration of environmental concerns during the design of goods, services, and processes
Designing for recycling
Disassembly

23. Service Delivery System Design
Includes
Facility location and layout
Servicescape
Process and job design
Technology and information support systems

24. Facility Location and Layout
Location affects a customer’s travel time
Important competitive priority in a service business
Layout affects process flow, costs, and customer perception and satisfaction

25. Physical evidence that customer can use to form an impression
Servicescape
Physical evidence that customer can use to form an impression
Provides the behavioral setting where service encounters take place
Standardization - Enhances efficiency, especially for multiple site organizations

26. Dimensions and Types of Servicescape
Ambient conditions
Spatial layout and functionality
Signs, symbols, and artifacts
Types
Lean servicescape environment: Provide service using simple designs
Elaborate servicescape environment: Provide service using more complicated designs and service systems

27. Service Process Design
Activity of developing an efficient sequence of activities to:
Satisfy internal and external customer requirements
Develop procedures to ensure that:
Things are done right the first time
Interactions between customers and service providers are simple and quick
Human error is avoided

28. Technology and Information Support Systems
Hard and soft technology is an important factor in designing services
Ensure:
Speed
Accuracy
Customization
Flexibility

29. Service Encounter Design
Focuses on the interaction, directly or indirectly, between the service provider and the customer
Principal elements
Customer contact behavior and skills
Service provider selection, development, and empowerment
Recognition and reward
Service recovery and guarantees

30. Customer Contact Behavior
Physical or virtual presence of the customer in the service delivery system during a service experience
Measured by the percentage of time the customer must be in the system relative to the total time it takes to provide the service
High-contact systems
Low-contact systems

31. Customer Contact Requirements
Measurable performance levels that define the quality of customer contact with representatives of an organization
Technical requirements as response time
Service management skills such as cross-selling other services
Behavioral requirements

32. Service Provider Selection, Development, and Empowerment
Recruit and train employees to exceed customer expectations
Empowerment: Giving people authority to make decisions based on:
Intuition
Control over the work
Taking risks and learning from mistakes
Promoting change

33. Recognition and Reward
Key motivational factors
Recognition
Advancement
Achievement
Nature of the work
Good compensation system can help to attract, retain, and motivate employees

34. Service Guarantees
Promise to reward and compensate a customer if a service upset occurs during the service experience
Service upset: Problem that a customer has faced with the service delivery system
Service failure
Error
Defect
Mistake
Crisis

35. Process of correcting a service upset and satisfying the customer
Service Recovery
Process of correcting a service upset and satisfying the customer
Steps
Begin immediately after a service upset
Document the process and train employees
Listen to the customer and respond sympathetically
Resolve the problem quickly, provide an apology, offer compensation

36. An Integrative Case Study of LensCrafters
Steps 1 and 2 - Strategic mission, market analysis and competitive priorities
Step 3 - Customer benefit package design and configuration
Steps 4a and b - Manufactured good design and process selection
Step 4c - Service-delivery system design

37. An Integrative Case Study of LensCrafters
Step 4d - Service encounter design
Steps 5 and 6 - Market introduction/deployment and evaluation

38. An Integrative Case Study of LensCrafters
Mission statement - Focused on being the best by:
Creating customers for life by delivering legendary customer service
Developing and energizing associates and leaders in the world’s best work place
Crafting perfect quality in about an hour
Delivering superior overall value to meet each customer’s individual needs

39. 6.11 One Example View of LensCrafters’ Customer Benefit Package

40. An Integrative Case Study of LensCrafters
Manufactured good design and process selection
Manufacturing process is integrated into the service facility to provide rapid order response, yet not sacrifice quality
Equipment used in labs is technologically advanced in the industry
Eyewear is manufactured to specifications in a clean, modern and professionally run facility

41. 6.12 A Schematic View of a Typical LensCrafters Store Layout

42. An Integrative Case Study of LensCrafters
Service encounter design
Each job requires both technical and service management skills
Associates are well trained, friendly, and knowledgeable about their jobs
Lab technicians are certified in all work tasks and processes

43. An Integrative Case Study of LensCrafters
Market introduction/deployment and evaluation
Develop processes to introduce changes into all existing locations
To maintain operational consistency and achieve its strategic objectives

44. To design and improve goods and services, most companies use the steps involved in designing goods and services
Taguchi loss function: L(x) = k(x – T )2
Essential to know the elements of service delivery system design and elements of service encounter design
LensCrafters’ manufacturing and service design depends on a variety of operations management concepts

45. Customer contact
Design for environment (DfE)
Design for manufacturability (DFM)
Elaborate servicescape environment
Empowerment
High-contact systems
Lean servicescape environment
Low-contact systems
Product simplification
Prototype testing

46. Quality function deployment (QFD)
Reliability
Service delivery system design
Service encounter design
Service guarantee
Service process design
Service recovery
Service upset
Servicescape
Voice of the customer