HOW SERVICE DESIGN SUPPORTS MANUFACTURING SERVITIZATION

Ion Iriarte, Daniel Justel, Ester Val, Itsaso Gonzalez

Mondragon UnibertsitateaMondragon Goi Eskola Politeknikoa

Diseinu Berrikuntza Zentroa

3rd International Business Servitization Conference - Bilbao

Objective:

This presentation aims to discuss the potential contributions of Service Design to manufacturing servitization

Index:

- Some words about servitization- Service Design approach- Potential benefits of Service Design for a manufacturer- Practical cases- Discussion and further research

i.e.: industrial services in the european machine tool industry:

Servitization is an ongoing transformation in several manufacturing sectors

99%

94%

93%

80%

78%

64%

61%

49%

33%

17%

30%

0% 20% 40% 60% 80% 100%

At least one industrial service offered

Type of services o�ered:

Repairs and maintenance on request

Installation and commissioning

Retrofit/modernization

Remote maintenance

Reconfiguration/reconstruction

Process optimization for client

Comprehensive service contracts

Condition Monitoring

Rental of machine tools

Other services

Share of user companies

Types of services offer ed:

Source: DEMAT (2013)

Adding or integrating services to products: benefits

Adapted from Kujala et al. (2013)

1. Strategic benefits Differentiation and creation of entry barriers for competitors.

2. Financial benefits Stabilization and increasing of revenues.

3. Marketing and Sales benefits Increasing of the familiarity, credibility and trust with the custumer.

4. Learning and Innovation benefits Access to useful information about the client.

5. Implementation Efficiency benefits Improving delivery efficiency through information exchange and cooperation.

Adding or integrating services to products: challenges

1. Customer relationships: value proposition What are we offering?

2. Pricing and financial flows uncertainties Why/How are our customers paying us? Which are our revenue channels?

3. Organisational and cultural shifts Who are we? What are we doing? How are we delivering value?

4. Changes on design, development and delivery processes. How do we do?

The servitization phenomenon has been studied by several knowledge communities(Services marketing, Service management, Service operations, Operations management, Product-service systems, Service science, etc.)

The design community has developed a new discipline: “Service Design”.

Service Design has influenced rapidly the way that services are conceived in some service sectors (healthcare, financial services, assurances or telecommunication, etc.)

Service Design has been proposed as a potential method to support product oriented companies towards service logic positions.

However, there are still few cases where Service Design has been implemented and subsequently analyzed for supporting manufacturers to servitize.

What is Service Design?

In a few words:

Service Design is the application of design principles, processes, tools and techniques to the design of services.

Service Design Principles:

1. User centered: User experience is at the center of the service proposition.

2. Co-creative All the stakeholders of the value network should be involved in the design of the service.

3. Sequencing Services are dynamic processes that take place over a certain period of time, so service’s aaaarhythms and cadences must be planned.

4. Evidencing Service actions are evidenced by several “Touchpoints”(artifacts, physical spaces, digital aaaainterfaces, people, etc.).

5. Holistic aaaaCustomers perceive service environment with all their senses as a whole; so, services aaaashould be designed showing the wider context in which their processes take place.

Stickdorn & Schneider (2010)

1. User centered: User experience is at the center of the service proposition.

2. Co-creative All the stakeholders of the value network should be involved in the design of the service.

3. Sequencing Services are dynamic processes that take place over a certain period of time, so service’s aaaarhythms and cadences must be planned.

4. Evidencing Service actions are evidenced by several “Touchpoints”(artifacts, physical spaces, digital aaaainterfaces, people, etc.).

5. Holistic aaaaCustomers perceive service environment with all their senses as a whole; so, services aaaashould be designed showing the wider context in which their processes take place.

Can this principles support manufacturing servitization?

Service Thinking could be understood as a framework for innovation that has its roots in a new way of thinking about value (Service Dominant Logic), that affects the way products and services are conceived (Service Design).

Service designers could facilitate manufacturers to a new understanding of value, activating company transformation towards more servitized logics.

Sangiorgi et al. (2012)

Potential benefits of Service Design for a manufacturerPotential benefits of Service Design for a manufacturer

Benefit 1 Service Design’s user centered techniques allow a better comprehension of customers and other actors involved in the value network.

Benefit 2 The use of service system representation techniques helps to understand how the value network and the service process work, and the experiences that each actor lives during the service provision.

Benefit 3

Service Design's holistic perspective helps to create and visualize value propositions that are not centered in technological artefacts but in customer experiences. This helps to ideate interconnected and combined product-service solutions, including intangible actions and tangible elements.

Benefit 4 Service Design can facilitate the cultural change towards service logic positions, via communication, co-creation and motivation techniques.

Benefit 5 Service Design makes tangible the service offering. This evidences the service value to the customer (external) and helps the organization to understand how value is co-created (internal).

Benefit 6 The use of service prototypes enhances the ability to foresee future situations preventing failures in service’s delivery.

Show the innovation potential of Service Thinking to manufactu-rers (Make me care and Show me something new).

Make industrial companies ex-periment with Service Design (Tell me what’s missing and Show me opportunities).

Implement Service Design (Make it tangible). Integrate it in the company supported by mana-gement and Service Design experts.

3. IMPLEMENT SERVICE DESIGN

SERVICE DESIGN

MANUFACTURINGCOMPANY

1. SHOW THE POTENTIAL OF SERVICE THINKING

2. EXPERIMENT WITH SERVICE DESIGN

Introducing Service Design in manufacturing companies

Adapted from Beckman & Barry (2007)

Business-University collaboration frameworks: REAL LIVE LEARNING LABS

“multidisciplinary teams of students, under mentorship of professionals from universities and industry work on Real Life assignments from the business sector”

Benefits to both industry and education:

- Students are integrated within a professional environment, learning and teaching are combined with practical work experience and exposure to the needs of industry.

- Enterprises seed ground for new ideas, experimenting with innovative approaches with a limited expenditure of resources.

Make me care and Show me something new

SHOW ME SOMETHING NEW

25 Master students showed new service concepts, along with the process and tools used to 40 companies innovation heads & staff.

Make me care and Show me something new

MANUFACTURINGCOMPANY

SHOW THE POTENTIAL OF SERVICE THINKING

BACBusinessAccelerationCenter deMONDRAGON

DESIGNERS

RESEARCHTEAM

Actions to generate curiosity, create interest and show the potential through examples of the application of Service Design methods and tools

EXPLORE

DEVELOP

IDEATE

SHOW

EXPERIMENT

INGINEERING

EXPERIMENT WITHSERVICE DESIGN

MANUFACTURINGCOMPANY

MARKET

MANAGEMENT

RESEARCHTEAM

Students work on real problems, supported by teachers and researchers under the guidance of company staff.

Tell me what’s missing and Show me opportunities

DESIGNERS

INNOVATION

Students were asked to design new service concepts based on participant companies’ products or manufacturing capabilities

4 cases:

- Household Appliances manufacturer- Sporting goods manufacturer (SME) - Automotive components manufacturer - Locking System manufacturer (SME)

A simplified design process was used for the REAL LIVE LEARNING LABS:

Exploration Ideation Development

Design Brief Service concept Detailed Service concept

Adapted from DBZ (2014)

Specific Design tools were selected for each design stage: Exploration

Phase Service Design Tools What for? Explore System Maps

Actors Maps Experience Maps Business Model Canvas Case studies Trendwatching Mood boards Interviews (user, experts and contextual interviews) Cultural surveys Personas Empathy Maps Design Scenarios Design requisites

Internal analysis Analysis of the current products and services offered by the company. Customer relationships, involved actors, internal competences and capabilities, company’s values, etc. External analysis Market analysis, global and sectorial trends, similar services, successful market cases, etc. User analysis Understanding of the realities and the motivations of all the actors involved in the value eco-system, focusing in each actor’s service experiences. Service vision and Design Brief Customer Insights, Service Scenarios, Service specifications.

Phase Service Design Tools What for? Ideation Brainstorming

Co-creation techniques Focus Group Role Playing Sketching Storyboarding Actos Maps Customer Journey Maps Blueprints Motivation Matrix Desktop Walkthrough Rapid Prototypes

Service concept generation Idea generation via co-creation sessions. Representation of service concepts Identification of the involved actors, its relationships and representation of their service experiences in narratives. Service sequential visualizations. Definition of customer experience Customer interaction definition, service evidences, touchpoints’ preliminary prototypes. Preliminary tests

Specific Design tools were selected for each design stage: Ideation

Specific Design tools were selected for each design stage: Development

Phase Service Design Tools What for? Development Actors Maps

System Maps Business Model Canvas Customer Journey Maps Blueprints Prototyping Service staging Validation interviews (user, experts, contextual interviews)

Design of the new offer before, during and after the service experience Detailed design of the customer interaction. Business Model definition & Back-stage planning Detailed definition of the internal actions and infrastructure needed for the service provision. Service evidence’s Design Detailed design and development of the service touchpoints. Including physical products’ design, digital interfaces and other service evidences. Prototyping and testing Validation of the service and its evidences with potential users and other stakeholders. Implementation plan definition Partnership building, feasibility testing, cost analysis, etc.

Some preliminary findings:Although, the inputs are in a conceptual level, and the application has been carried out in business-academic frameworks:

Companies saw a well-structured method to create combined product-service solutions centered on their customers’ needs (Benefit 1).

Service solutions were not focused on technological artefacts but on customer experiences (Benefit 3). This helps to visualize more holistic market opportunities that go beyond technological innovation.

Principles and concepts like “touchpoints” and “service moments” as well as visualization techniques (narratives, systems maps and customer journeys), supported by co-creation techniques, help manufacturers to visualize how the new value is delivered; they “make the service tangible” (Benefit 2 and Benefit 4). This helps to change the employees’ value perspective (Benefit 5).

Some difficulties emerge (1):

1. Misunderstandings due to the unfamiliarity of the manufacturers with the lexicon used by the designers.

Service Design talks about value co-creation, customer journeys, user centered design, and narratives, while manufacturers talk about technology, quality, operations, standardization, and artifacts.

Until the first visual narratives and system’s maps where shared, the process was perceived as a confused and a fuzzy process.

2. In the case of B2B companies, it was difficult to “see the service through the customer eyes” because it was not possible to implement some user research tools (Benefit 1) because of the difficulty on accessing to some users inside customer’s organization.

This make more difficult to identify relevant customer Insights and have a proper understanding of customer’s needs.

Some difficulties emerge (2):

Further research is needed:The results, even if they are encouraging, they are just “service concepts”.

In order to study the impact of Service Design, the validation and the implementation of these concepts are compulsory. This will also allow analyzing which is the impact of service prototyping in servitization processes (Benefit 6).

Further research is needed; more practical cases must be implemented and analyzed in different industrial sectors in order to evaluate completely the potential contribution of Service Design in manufacturing servitization.

ESKERRIK ASKO!!THANK YOU!!

iiriarte@mondragon.edu