3. DESIGNING PRODUCTS
AND SERVICES
Lecture 3
1
3.1. Introduction
❑ Design is important
❑ It involves a lot of money
❑ It is not easy, and also costly to make design changes
❑ Design sets the limits of the operation’s capability
❑ Design means satisfying the needs of the customer
❑ Product and service design should start and end with the
customer.
❑ The lifeblood of any organization is new products and
services
❑ Good design provides a competitive edge for an organization
❑ New products or services can rejuvenate an organization,
define new markets and inspire new technologies
❑ Product and service design provide a natural venue for
learning, breaking down barriers, working in teams, and
integrating across functions
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3.1. Introduction
❑ Design capitalizes on the organization's core
competences
❑ It also determines what new competences need to be
developed
❑ Product or service design is therefore a critical process
for an organization
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3.1. Introduction
• Design is a major factor in:
– Cost
– Quality
– Time-to-market
– Customer satisfaction
– Competitive advantage
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3.1. Introduction
❑ Reasons for Product and Service Design or
Redesign
❖ Economic (e.g., low demand, excessive warranty claims, the
need to reduce costs).
❖ Social and demographic (e.g., aging baby boomers, population
shifts).
❖ Political, liability, or legal (e.g., government changes, safety
issues, new regulations).
❖ Cost or availability (e.g., of raw materials, components, labor,
water, energy).
❖ Competitive (e.g., new or changed products or services, new
advertising/promotions).
❖ Technological (e.g., in product components, processes).
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3.2.1 Benefits of Effective Design
1. New products rejuvenate an organisation and even an
industry (Apple’s i-phone rejuvenated the phone
industry; Ford’s Taurus, GM’s Saturn, Chrysler’s
minivan saved the automobile industry)
2. It encourages organisations to look outside their
boundaries
i. The research and prototype stages of the design process can generate new
product ideas
ii. It encourages organisations to challenge conventional thinking
iii. It encourages organisations to experiment
3. increased sales/demand of your products or services
4. improved market position relative to your competitors
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3.2.1 Benefits of Effective Design
5. Enhanced customer loyalty and fewer customer
complaints
6. Stronger business identity
7. Ability to create new products and services and open up
new markets
8. Reduced time to market for new products and services
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3.2.2 Consequence of Ineffective
Design
❑ Consequences of poor design
❑ The quality of a product depends to a great extent on its design.
❖product may not meet customer needs and leads to dissatisfied
customers
❖it may be so difficult to make that quality suffers
❑ Consequences of costly designs
❖ products may be overpriced
❖ products may lose market share
❑ Consequence of lengthy designs
❖ a competitor may capture the market by being the first to enter
the market
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3.2.2 Consequence of Ineffective
Design
❑ Consequences of rushing to be first to the market
❖ design flaws may occur
❖ could result in product poor performance
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3.3. The Design Process
❑ Characteristics of an effective design process
❖ Matches product or service characteristics with customer
requirements.
❖ Ensures that customer requirements are met in the
simplest and least costly manner.
❖ Reduces the time required to design a new product or
service
❖ Minimizes the revisions necessary to make the design
workable
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3.3. The Design Process
❑ The design process
consists of the following
steps
1. Idea generation
2. Feasibility study
3. Preliminary design
1. Form design
2. Functional design
3. Production design
4. Final design
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3.3. The Design Process
3.3.1. Idea Generation
❑ This begins with understanding the
customer and identifying customer needs
❑ Sources of ideas for new products or
improving existing products include
❖ company’s own R&D department
❖ customer complaints or suggestions
❖ marketing research
❖ suppliers
❖ salespersons in the field
❖ Factory workers
❖ new technological development
❖ competitors
➢ perceptual maps
➢ benchmarking
➢ reverse engineering
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3.3. The Design Process
3.3.2. Feasibility study
❑ Marketing formulates
alternative product and
service concepts from the
first step
❑ The promising concepts
undergo
❖ Market analysis
❖ Economic analysis
❖ Technical/Strategic analysis
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3.3. The Design Process
Market Analysis
❑ Market researchers design customer surveys, interviews,
focus groups, or market tests
❑ The data collected are then evaluated to assess whether
there is enough demand for the proposed product to
invest in developing it further
❑ If the results are positive, then the next analysis is
undertaken
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3.3. The Design Process
Economic Analysis
❑ This looks at estimates of production and development costs
❑ It then compares these to estimated sales volume
❑ A price range (compatible with market segment and product
image) is discussed
❑ A combination of the following techniques are typically used
to evaluate the profit potential of the product
❖ Cost/benefits analysis
❖ Decision theory
❖ Net present value
❖ Internal rate of return
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3.3. The Design Process
❑ Proceed to the next stage if analysis is favourable
Technical/Strategic Analysis
❑ Answers questions related to competences
❖ Does the new product require new technology?
❖ Is the risk or capital investment excessive?
❖ Does the company have enough labour and management skills to
support required technology?
❖ Is sufficient capacity available for production?
❖ Does the new product provide a competitive advantage for the
company?
❖ Does it draw on corporate strength?
❖ Is it compatible with the core business of the company?
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3.3. The Design Process
❑ At the end of the feasibility
study, a performance
specification is then
prepared for the product
concepts that pass the
study
❑ These describe what the
product should do to
satisfy customer needs
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3.3. The Product design process
3.3.3. Preliminary
Design
❑ Design engineers take
the performance
specifications and
Seeks to meet
translate them into design specs.
technical specifications
❑ This involves
❖ building a prototype
❖ testing the prototype
❖ revising the design
❖ retesting and so on until
a viable design is
determined
The three
are done
concurrently
Concerns
with how the
product will
be made
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3.3. The Product design process
3.3.4. Form Design
❑ This refers to the physical appearance of the product
❖ its shape
❖ its colour
❖ its size
❖ its style
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3.3. The Product design process
Functional Design
❑It seeks to meet the performance
specifications of fitness for use by the
customer.
❑Three characteristics considered here are
❖reliability
❖maintainability.
❖usability
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3.3. The Product design process
Reliability
❑ It is the chance (i.e. probability) that a given product will
perform its intended function for a specified length of
time under normal conditions of use.
❑ A product's reliability is a function of the reliabilities of its
component parts.
❑ A product’s reliability can be estimated via two types of
components arrangement
❑ Serial arrangement and Parallel arrangement
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3.3. The Design Process
A. Serial arrangement
If all parts must function for the product to operate, then
the product's reliability is the product of the component
part reliabilities.
R1
R2
R3
❑For serial arrangement, the product reliability, Rs, is
R s = R1 * R 2 * ... * R n
What does the equation implies about the system reliability as the number of
serial components increases?
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3.3. The Design Process
A. Serial arrangement
❑ As the number of serial components increases, system
reliability will continually reduce or deteriorate.
❑ This makes a good argument for simple designs with
fewer components
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3.3. The Design Process
B. Parallel arrangement
❑ To increase the reliability of
R2
individual parts (and thus the system
as a whole), redundant parts can be
built in to back up a failure
R1
❑ Providing emergency brakes for a car is
an example.
Product reliability, Rp, is
R p = 1 − (1 − R 1 )* (1 − R 2 )* ... * (1 − R n )
or
R p = R 1 + (1 − R 1 )* R 2 (for a component and a backup)
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3.3. The Design Process
Example Parallel arrangement
Suppose if the original component fails (a 5% chance), the
backup component will automatically kick in to take its place—
but only 90% of the
time.
System reliability in this two-component parallel
arrangement is given as:
R p = R 1 + (1 − R 1 )* R 2
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3.3. The Design Process
1. Determine the reliability of the system of components shown
below
0.92
0.96
0.90
0.97
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3.3. The Design Process
2. Mr. Peter Asare, a production supervisor for Melkon, is committed to the
company’s new quality efforts. Part of the program encourages making
product components in-house to ensure higher quality levels and instill
worker pride. The system seems to be working well. One assembly, which
requires a reliability of 0.95, is normally purchased from a local supplier.
Now it is being assembled in-house from three components that each boast
a reliability of 0.96.
(a) Customer complaints have risen in the three months since Melkon
started doing its own assembly work. Can you explain why?
(b) What level of component reliability is necessary to restore the product to
its former level of quality?
(c) Peter cannot increase the reliability of the individual components;
however, he can add a backup with a reliability of 0.90 to each
component. How many backups will be needed to achieve a 0.95
reliability for the assembly?
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3.3. The Design Process
Three companies have submitted designs to build a new mobile
telephone tower for MTN to serve its customers within the Takoradi
Metropolis. The three designs are as shown below.
i. Calculate the system reliability for each design. (Round your answer to
the nearest 2 decimals places)
ii. Which design should MTN select purely based on system reliability?
Design 2
Design 1
Design 3
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3.3. The Product design process
❑ Reliability can also be expressed as the length of time a
product or service is in operation before it fails
❑ This is called mean time between failures (MTBF)
𝑇𝑖𝑚𝑒
1
𝑀𝑇𝐵𝐹 =
=
𝑁𝑜. 𝑜𝑓 𝑓𝑎𝑖𝑙𝑢𝑟𝑒𝑠
𝑓𝑎𝑖𝑙𝑢𝑟𝑒 𝑟𝑎𝑡𝑒
❑ If your laptop battery fails four times in 20 hours of
4
operation, its failure rate is = 0.2 per hour, and its
𝑀𝑇𝐵𝐹 =
1
0.2
20
= 5 hours
❑ MTBF is the length of time a product or service is in
operation before it fails. It is a basic measure for quantifying
reliability of a repairable system or product.
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Lecture 3
3.3. The Product design process
For non-repairable product, reliability is quantified using
MTTF (Mean Time To Failure)
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3.3. The Product design process
Maintainability
❑ It is the ease and/or cost with which a product or service
is maintained or repaired.
❑ Provide instructions that teach consumers how to
anticipate malfunctions and correct them themselves
❑ Specify regular maintenance schedules.
❑ One quantitative measure of maintainability is mean time
to repair (MTTR)
❑ MTTR is the average time required to repair a failed
component or device.
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3.3. The Product design process
❑ We can combine MTTR with the product reliability measure
MTBF to derive the system’s average availability (SAA)
measure as
MTBF
SAA =
MTBF + MTTR
MTBF
Available
Lecture 3
MTTR
Next availability
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3.3. The Product design process
Rose must choose a service provider for her company’s ecommerce site. Other factors being equal, she will base her
decision on server availability. Given the following server
performance data, which provider should she choose?
Provider
A
B
C
Lecture 3
MTBF(hr)
60
36
24
MTTR(hr)
4.0
2.0
1.0
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3.3. The Product design process
Usability
❑ We have all encountered products and services that are
difficult or cumbersome to use (salt shakers, doors that
you cannot tell whether to push or pull)
❑ Usability is what makes a product or service easy to use
and a good fit for its targeted customer
❑ It is a combination of the following factors
❖ user’s experience with a product
❖ ease of learning
❖ ease of use
❖ ease of remembering how to use
❑ Usability engineers are important these days in the areas
of electronics, computer software, and Web site design
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3.3. The Product design process
Production Design
❑ This refers to how the product will be made
❑ Designs that are difficult to make (overdesign) often
result in poor-quality products
❑ This is often a result of lack of knowledge of manufacturing
capabilities
❑ As a result, production personnel sometimes find
themselves redesigning products on the factory floor
❑ This is costly and disruptive
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3.3. The Product design process
❑Recommended approaches to production
design include
❖Simplification
❖Standardisation
❖Modularity
❖Design for manufacture
❖Concurrent engineering
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3.3. The Product design process
Simplification
❑ The aim here is to reduce the number of
❖parts in a product
❖subassemblies in a product
❖options in a product
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3.3. The Product design process
Standardisation
❑ For this, commonly available and interchangeable parts
are used
❑ This brings about
❖ Higher-volume production and purchasing
❖ lower investment in inventory
❖ fewer quality inspections
❑ Thus standardisation leads to a great cost advantage
❑ What about being different?
❑ The dilemma is combining cost advantage with variety
and uniqueness
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3.3. The Product design process
Modularity
❑This is a solution to the problem of variety and
uniqueness with standardisation
❑Here standardised building blocks are combined in
variety of ways to create unique finished products
❑It is common in the electronics and the automobile
industries
❑Examples include
❖Toyota’s Camry, Corolla, and Lexus share the same body
chassis
❖Campbell’s Soup Company uses four basic broths (beef,
chicken, tomato, and seafood bisque) to produce 125
varieties of final soup products
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3.3. The Product design process
Design for Manufacture
❑ It is the process of designing a product so that it can be
produced easily and economically.
❑ It has the benefits of
❖ improving the quality of product design
❖ reduces time of product design and manufacture
❖ reduces the cost of product design and manufacture
❑ Design for manufacture combines the principles of all the
other three discussed above
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3.3. The Product design process
Concurrent Engineering
▪ Concurrent engineering, also known as simultaneous
engineering, is a method of designing and developing
products, in which the different stages run
simultaneously, rather than consecutively.
▪ It decreases product development time and also the time
to market, leading to improved productivity and reduced
costs.
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3.3. The Product design process
▪ Concurrent Engineering removes the need to have
multiple design reworks, by creating an environment for
designing a product right the first time round.
▪ By engaging in multiple aspects of development
concurrently, the amount of time involved in getting a
new product to the market is decreased significantly.
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3.3. The Product design process
Final Design
❑This is detailed drawings and specifications
for the new product or service.
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3.4. Technology in design
❑ Good design is aided by the use of technology
❑ Technology is important in design because nowadays,
changes in product design are frequent
❑ Also, product lifecycles are shorter
❑ Some of the technology include
❖ Computer-aided design (for creating, modifying, and analysis of
design)
❖ Computer-aided engineering (retrieves the description and
geometry of a part from a CAD database and subjects it to
testing and analysis on a computer without a prototype)
❖ Computer-aided manufacturing (automatic conversion of CAD
design data into processing instructions for computer controlled
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3.4. Technology in design
equipment and the subsequent manufacture of the
part as it was designed
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3.5. Collaborative Product Design
Systems
❑ Great value is derived from the CAD system when
product-design files can be shared and worked on in real
time from physically separate locations
❑ This could take place within the same organisation,
between manufacturers and suppliers, or between
manufacturers and customers
❑ The Web is a facilitator of Collaborative Product Design
❑ Software systems that enable collaborative design are
referred to as collaborative product design
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3.6. Techniques for improving the
design process
❑Many companies known for creativity and
innovation in product design are slow and
ineffective at getting new products to the market
❑Poor manufacturing practices may create
problems in converting ideas to finished
products
❑The main cause of these is poor design
❑Improving the design process is very crucial
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3.6. Techniques for improving the
design process
❑ The following are ways of improving the design
process
a) Establish multifunctional design teams (include
participants from marketing, manufacturing, and
engineering, customers, dealers, suppliers;
b) Make design decisions concurrently rather than
sequentially; reduces the length and cost of the
design process
c) Design for manufacture and assembly;
d) Review designs to prevent failures and ensure
value;
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3.6. Techniques for improving the
design process
e)
f)
g)
h)
i)
Lecture 3
Design for the environment;
Measure design quality;
Use Quality Function Deployment (QFD);
Design for robustness;
Engage a collaborative design.
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3.7.Quality Function Deployment
(QFD)
❑ QFD is a formal method for making sure that everyone
working on a design project
❖ knows the design objectives
❖ is aware of the interrelationships of the various parts of the
design
❑ It therefore translates the voice of the customer into
technical design requirements
❑ QFD uses a series of matrix diagrams which resemble
connected houses
❑ Hence these series of matrix diagrams is often referred
to as house of quality
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3.7.Quality Function Deployment
(QFD)
❑ The parts of the house
of quality are
1. Customer requirements
and their importance
2. Competitive assessment
3. Design requirements
4. Relationship matrix
5. Correlation matrix
6. Specifications or target
values
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3.7.Quality Function Deployment
(QFD)
1. Obtain customer
requirements and their
respective importance on
the product
2. Obtain customer
assessment on these
requirements for your
company and other
competitors (reveals gaps)
3. Translate the customer
requirements to
measurable design
requirements
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3.7.Quality Function Deployment
(QFD)
4. Obtain a relationship between
the customer requirements and
the design requirements (this
relationship could be positive,
negative (strong or weak) or
none). Gives a clue as to how to
satisfy the customer
5. Establish any relationships
between the design requirements
which must be taken into account
when designing
6. Finally, add quantitative
measures to your design
requirements
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3.7.Quality Function Deployment (QFD)
Relationship
can be +ve
or -ve
Lecture 3
Strong
relationships
are
designated
with circles
with plus, or
minus
54
3.7.Quality Function Deployment (QFD)
▪ Iron X excels on the attributes of
presses quickly, removes wrinkles,
provides enough steam, automatic
shutoff, and doesn’t break when
dropped. So there is no critical need
to improve those factors.
▪ Iron X, is rated poorly on ‘doesn’t
stick, doesn’t spot, heats quickly,
quick cool-down, and not too
heavy’. These are order qualifiers.
Thus, the company need to improve
these factors just to be considered
for purchase by customers.
▪ None of the irons perform well on
‘doesn’t scorch fabric, or doesn’t
burn when touched’. Perhaps the
company could win some orders if it
satisfied these requirements.
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3.8. Designing Services
3.8.1. Characteristics of Services
❑ Services are acts, deeds, performance or relationships
that produce
❖ time (cleaning service saves the customer time)
❖ place (department stores)
❖ form (online broker puts together information in a form more
suitable for the investor)
❖ psychological (a night out at a restaurant or movie in the middle
of a busy workweek)
❑ Services are intangible and perishable
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3.8. Designing Services
3.8.1. Characteristics of Services
❑ Service output is variable
❑ Services have higher customer contact
❑ The service and the service delivery are inseparable
❑ Services tend to be decentralized and geographically
dispersed
❑ Services are consumed more often than products
❑ Services can be easily emulated
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3.8. Designing Services
The Service design process
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3.8. Designing Services
3.8.2. Service Design Process
❑ It is more comprehensive and
occurs more often than product
design
1. The first stage is the service
concept (the purpose of the
service). This defines
❖ the target customer and the
desired customer experience
❖ how our service is different from
others
❖ how it will compete in the
marketplace
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3.8. Designing Services
2. Create a service package
consisting of a mixture of
physical items, sensual benefits
and psychological benefits.
❑ For a restaurant, these components
are identified as
❖ Physical items: facilities, food,
drinks, tableware, napkins, and
other touchable commodities
❖ Sensual benefits: taste and aroma
of the food, and sights and sounds
of the people
❖ Psychological benefits: rest and
relaxation, comfort, status, and a
sense of well-being
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3.8. Designing Services
• From the service package,
service specifications are
developed for performance,
design, and delivery.
3. Develop performance
specifications for general
and specific customers
❖ customer requirements
❖ customer expectations
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3.8. Designing Services
• Performance specifications are
converted into design specifications
4. Develop design specifications
which must describe the service in
sufficient detail for the desired
service experience
❑ This usually consists of
❖ activities to be performed
❖ skill requirements
❖ guidelines for service providers
❖ cost and time estimates
❖ facility size, location, and layout
❖ equipment needs
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3.8. Designing Services
5. Finally, develop
delivery specifications
which should outline
the steps required in
the work process
❑ This should normally
include the
❖ work schedule
❖ deliverables
❖ locations at which the
work is to be performed
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3.8. Designing Services
3.8.3. Tools for service design
❑Tools for designing services include the
following
1.
2.
3.
4.
5.
Lecture 3
Quality Function Deployment
Service blueprints (a specialised flow chart used for service
processes)
Service scripting (front office and back-office activities: best
is mass customisation)
Servicescapes (design of the physical environment in which
a service takes place)
Waiting line analysis
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