Service design is the activity of organising people, planning, infrastructure, communication and material components of a service, to improve its quality and the interaction between customers and service providers.
The purpose of service design methodologies is to design according to the needs of participants or customers so that the service is competitive, user-friendly, and relevant to the customers.
In service design, one can observe the process of collecting service needs, aligning them with integrated service requirements, and developing design specifications for the essential service assets. A particular feature of this approach is a strong emphasis on reuse during design.
Service design helps create new services or improve existing services. It helps to make the service interfaces usable, practical, and desirable from the client’s perspective. Utilising the available resources, and service design helps connect organisations, suppliers, and service providers to their clients in a desirable way. Service design helps create an experience for its users and thereby helps improve everyday life. It therefore helps create brand affinity. Service design helps gain a true understanding of the consumer market, its users and their experiences and expectations.
Elements of Service Design
The elements of service design can be categorised as follows:
- Structural
- Managerial
1) Structural
i) Capacity Planning
Capacity planning is the process of determining the production capacity needed by an organization to accurately assess and allocate the production capacity required to effectively meet the ever-evolving demands for their products. In the context of capacity planning, “capacity” is the maximum amount of work that an organization can accomplish within a specific timeframe.
Capacity = (number of machines or workers) (number of shifts) x (utilisation) x (efficiency).
ii) Delivery System
The delivery of services differs significantly from that of manufactured goods. Goods production precedes distribution, while services are frequently indivisible from the service provider. Because of this inseparability characteristic, the channels for most services are short and simple. The distribution of services concerns the service’s availability, specifying when and where it is obtainable.
iii) Facility Design
Servicescape and a landscape bear a resemblance to each other. It includes facilities exterior (landscape, exterior design, signage, parking, surrounding environment) and facilities interior (interior design and decor, equipment, signage, layout, air quality, temperature and ambience). Servicescape along with other tangibles like business cards, stationary, billing statements, reports, employee dress, uniform brochures, web pages and virtual servicescape form the ‘Physical Evidence’ in the service marketing.
iv) Location
A location-based service (LBS) is an information or entertainment service that can be accessed using mobile devices through the mobile network. LBS utilizes geographical information to determine the position of the mobile device. It can be used in a variety of contexts, such as spanning health, indoor object search, entertainment, work, personal life etc. LBS encompass a range of services aimed at determining the location of a person or object. They facilitate locating the nearest banking cash machine or the whereabouts of a friend or employee.
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2) Managerial
i) Quality
Even in the case of products, defining the quality of a product is challenging because it is highly dependent on customer perception. Quality is a word that enjoys widespread usage, yet it lacks a universally accepted definition.
ii) Service Encounter
The service encounter stage often begins with the act of applying, requesting a reservation, or placing an order. Contacts may take the form of personal exchanges between service employees and customers, or impersonal interactions with computers or machines. Customers may become actively involved in one or more service processes in high-contact services, such as restaurants, healthcare, hotels, and public transportation.
iii) Information
Keeping information on patients allows the service organisations to build a loyal customer base, which is an effective word-of-mouth advertising medium. Providing free services and other services also allows the companies to build a unique database on its procedure.
iv) Managing Capacity and Demand
One of the key challenges in managing supply and demand management in services is the lack of inventory capability. Unlike manufacturing firms, service firms cannot build up inventories during periods of slow demand for future utilization when demand eventually increases. This lack of inventory capability is due to the perishable nature of services and their simultaneous production and consumption. An airline seat that is not sold on a given flight cannot be resold the following day: the productive capacity of that seal has perished. Similarly, an hour of a lawyer’s billable time cannot be carried over from one day to the next. Services cannot be transported or transferred between locations or individuals.
Approaches to Service Design
There are some generic approaches to service design, which are as follows:
1) Customer as Co-Producer
For most service systems, the customer is present when the service is performed. Instead of being a passive bystander, the customer represents productive labour just when needed, and opportunities exist for increasing productivity by involving the customer in certain service activities, effectively transforming them into a co-producer.
Further, customer participation can increase the degree of customisation. For example, Pizza Hut’s lunch buffet permits customers to make their salads and select pizza-by-the-slice while the cooks work continuously at re-stocking only the pizzas that are selling rather than filling individual orders. Thus, involving the customer in the service process can support a competitive cost leadership strategy with some customisation if it is focused on customers interested in serving themselves.
Depending on the degree of customer involvement, a spectrum of service delivery systems, from self-service to complete dependence on a service provider, is possible. For example, consider the services provided by a real estate agent. A homeowner has the option of selling the home personally as well as staying away from any involvement by engaging a real estate agent for a significant commission. An intermediate option is the Gallery of Homes approach. For a flat fee (e.g., $500), the homeowner lists the home with the Gallery.
Home buyers visiting the Gallery are interviewed concerning their needs and are shown pictures and descriptions of homes that might be of interest. Appointments for visits with homeowners are scheduled, and an itinerary is developed. The buyers provide their transportation, the homeowners show their own homes, and the Gallery agent conducts the final closing and arranges financing, as usual. Productivity gains are achieved by a division of labour. The real estate agent focuses on duties requiring special training and expertise, while the homeowner and the buyer share the remaining activities.
2) Production-Line Approach
The production-line system-to-service system design attempts to translate a successful manufacturing concept into the service sector, and several components contribute to its success. People tend to see service as something personal it is performed by individuals directly for other individuals. This humanistic perception can be overly constraining, however, and therefore can impede the development of an innovative service system design.
For example, People sometimes might benefit from a more technocratic service delivery system. Manufacturing systems are designed with a primary focus on process control. The output often is machine-paced, and jobs are designed with explicit tasks to be performed. Special tools and machines are provided to enhance worker productivity. A service adopting this production-line approach could achieve a competitive advantage with a cost leadership strategy.
McDonald’s provides the ideal example of this manufacturing-in-the-field method of service. Raw materials (eg, hamburger patties) are measured and pre-packaged off-site, leaving the employees with no discretion as to size, quality, or consistency. In addition, storage facilities are designed expressly for the predetermined mix of products. No extra space is available for food and beverages not called for in the service.
3) Information Empowerment
Information Technology (IT) is no longer exclusive to computer “nerds.” touches all of us every day. Essential services such as police and fire protection demand the use of information technology, and the electricity and running water in our homes are brought to us by IT. Information technology is such a fundamental part of daily life worldwide that the challenge is finding some aspects not touched by it. Certainly, no service today could survive without the use of IT, and successful managers will see that IT offers much more than simply a convenient way to maintain records. Indeed, one of its most essential functions is empowering employees and customers.
4) Customer Contact Approach
The manufacture of products is completed in a controlled environment. The process design is focused on creating a continuous and efficient conversion of inputs into products without consumer involvement. Using inventory, the production procedure is decoupled from variations in customer demand and, thus, can be scheduled to operate at total capacity. How can service managers design their functions to achieve the efficiencies of manufacturing when customers participate in the process? Richard B. Chase has argued persuasively that service delivery systems can be separated into high and low-contact customer operations.
The low-contact, or back-office, operation is managed like a well-oiled machine, where all the production management concepts and automation technology are applied. This separation of activities can result in customer perception of personalised service while achieving economies of scale through volume processing. The success of this approach depends on the required amount of customer contact in the creation of the service and the ability to separate a technical core consisting of operations with minimal customer involvement. In our taxonomy of service processes, this approach to service design is most appropriate for the processing-of-goods category (e.g., dry cleaning, where the service is performed on the customer’s property).
5) Customer Empowerment
Customers, too, can be directly empowered by IT. The internet, which links people together worldwide, is one example of a potent tool. Customers are no longer dependent entirely on local service providersCustomers are no longer entirely dependent on local service providers. It provides customers with other ways of actively participating in the service process. For example, Customers can go to FedEx’s home page, enter the airbill number of a package sent through FedEx, and find out exactly where the package is at that moment. If it has been delivered, they can find out who signed for it. They also can make their travel reservations.
6) Employee Empowerment
The earliest use of IT was in record-keeping. A business might have had a computerised database of customer names and addresses, and perhaps another database of the names and addresses of suppliers of essential goods and services. These various databases made keeping the shareholders and the IRS happy more manageable. They made record-keeping faster and more accurate. However, secretaries still just entered data, procurement clerks just ordered supplies or services, line service people smiled a lot, and production-floor workers still performed their routine duties. Management carried the task of juggling these various activities.