[DOCUMENT SUBTITLE]

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SERVICE OPERATIONS MANAGEMENT
BO6032
Written literature review
EXECUTIVE SUMMARY:

This report provides a literature overview on Designing and Delivery new services concepts,
principles and frameworks. Firstly, the report explains the importance of Designing services
to keep up with economical changes and to aid competitive advantage. It also highlights
factors such as customer contact and demand and supply management that should be taken
into consideration when designing new services. Additionally, the report examines the
Design Thinking Approach which is a human-centred approach that takes in to account the
users’ needs and critically analyse the approach strengths and weaknesses. The Design
Thinking approach is applied to a real-life case example of Virgin Atlantic departure lounge
in Barbados to further understand the principles of the Design Thinking approach. Secondly,
the paper describes and explains the four stages in the New Service Development (NSD)
process cycle. This process is good for innovation and growing and sustaining a business.
Additionally, the paper analyses the strengths and weakness of the NSD process and
highlight that it is generic and can be used for both service and product design. Also,
Kingston University new registration system is used as an example of a service design that
follows the NSD four stage process, this example aids a deeper understanding of the stages
needed to produce a new service. Moreover, the report explores the important of Service
delivery to create or add value to customers which consequently enhances the customer’s
journey and experience. The service Delivery system model focus on how to engage
frontline employees to deliver the best customer service. The NSH is used a real-life
example to understand how the organisation manages their service delivery through service
culture, service quality, employee engagement and good customer service. Finally, the
report examines the comparisons and differences with service and product design for
example both processes has customer involvement. Product design is about enriching
quality of life by producing desirable products that customers want and need.

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Table of Contents
EXECUTIVE SUMMARY: ........................................................................................................................... 1
1.0 INTRODUCTION: .............................................................................................................................. 3
1.1 Definitions: .................................................................................................................................. 3
1.2 History: ........................................................................................................................................ 3
2.0 WHY IS SERVICE DESIGN IMPORTANT? ........................................................................................... 3
2.0 Innovation: .................................................................................................................................. 3
2.1 Social and demographics: ........................................................................................................... 4
2.3 Economical: ................................................................................................................................. 4
3.0 FACTORS TO CONSIDER WHEN DESIGNING NEW SERVICES: .......................................................... 5
4.0 DESIGN THINKING APPROACH: ....................................................................................................... 6
4.1 What Is Design Thinking? ................................................................................................................ 6
4.2 Designing thinking approach: Principles ..................................................................................... 6
4.3 Virgin Holidays: Design Think Approach ..................................................................................... 7
Design Thinking Principles Virgin Atlantic Beach Lounge: .............................................................. 7
5.0 NEW SERVICE DEVELOPMENT (NSD) PROCESS CYCLE: ................................................................... 8
5.2 Kingston University new Check-in system .............................................................................. 9
...................................................................................................................................................... 10
NSD 4 key stages applied to Kingston University new design: ..................................................... 10
5.4 NSD Process Cycle: Critical analysis .......................................................................................... 10
6.0 DELIVERING NEW SERVICES: WHY IS SERVICE DELIVERY IMPORTANT? ....................................... 11
7.0 FACTORS TO CONSIDER WHEN DELIVERING SERVICES: ................................................................ 11
8.0 SERVICE DELIVERY SYSTEM (SDS): ................................................................................................. 12
8.1 SDS four elements: .................................................................................................................... 12
8.2 NHS: Service delivery system .................................................................................................... 13
9.0 Designing and delivering Products: ............................................................................................... 14
Designing & Delivery Products vs Design and Delivery Services: ..................................................... 15
.......................................................................................................................................................... 15
.............................................................................................................................................................. 15
10.0 Conclusion: .................................................................................................................................. 16
11.0 REFERENCES: ............................................................................................................................... 17
12.0 APPENDIX: ................................................................................................................................... 19

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1.0 INTRODUCTION:

1.1 Definitions:
Designing services is a creative process that begins with the service concept and strategy to
provide a service with features that differentiate it from competition, (Fitzsimmons,
Fitzsimmons and Bordoloi, 2014). Designing new services involves the user experience and
feedback, marketing and project management in order to produce new services.

Delivering services is the set of activities that take place to produce a service. Producing a
service involves the interactions of both providers and clients. Delivering services is the
process after the service is designed and is available to clients or customers.

1.2 History:
The term “service design” was first recognized in 1982 by Lynn Shostack. Service design was
a responsibility of marketing and management. It was proposed that a business should
develop a “service blueprint” that specify the processes within a company and how each
process interacts with other processes to produce services. Additionally, this blueprint was
initially only used for service design; however, it has also become a tool for managing
operational efficiency. Then in 1991, Prof. Dr. Michael Erlhoff proposed that service design
be considered a design discipline. (The Interaction Design Foundation, 2018)

2.0 WHY IS SERVICE DESIGN IMPORTANT?

2.0 Innovation:
Innovation is the process of uncovering new ways to do things which lead to new designs
and new ideas which can ultimately improve services. Design innovation can aid competitive
advantage and improve a business’s position in the market; as a result, generate revenue
and profitability. A great example of a service innovation is Uber with its innovative new
service UberEATS. This service innovation utilises Uber’s already established resources such
as the Uber app to prove a new service of food delivery.

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2.1 Social and demographics:
Service design helps organisations to keep up with external environmental changes that
may affect customers using the service. Changes in consumer’s habits and need will affect
customers using service, if this problem was to transpire; businesses will have to design a
new service to entice customers. For example, Pubs in the UK i.e. ‘The Castle’ in Tooting
Broadway. From personal experience pubs became very old and dated and in recent years
many pubs have been renovated to look modern and contemporary. Pubs now have new
food menus, games and social activities that appeal to the new generation of customers
using that service. Therefore, service design is vital to keep up with changes to meet
customer needs; as a result, this will generate revenue and profitability.

2.3 Economical:
Service design can assist business to keep up with economic changes and uncertainty. For
example, Political issues of Brexit’s uncertainty has caused many consumers in the UK to
spend less because, “Brexit is largely responsible for the rising inflation that is weakening
households’ spending power”, (Academic.mintel.com, 2019). In this situation, designing
services will be useful to take these factors into consideration when designing services. By
doing this they can insure the service is price efficient to attract and retain customers who
are cost conscious.

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3.0 FACTORS TO CONSIDER WHEN DESIGNING NEW
SERVICES:

From my readings I have summarised factors businesses should consider when designing
services because various matters such as location and layout should be decided while
designing service process.

1. Customer contact- customers can offer suggestions to how the service can be
improved and redesign.
2. Employees- how many staff are needed to provide a good service?
3. Location of service consumption- will the customer come to a service facility or will
the service be mobile and go to the customer?
4. Demand and supply management- need to balance ratio of supply and demand e.g.
McDonalds must ensure that restaurants have enough food and drink to serve
customers.
5. Design of service facility and accessories- what layout design will be used? What
type of furnishing? Colour scheme etc.

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4.0 DESIGN THINKING APPROACH:

4.1 What Is Design Thinking?

Design thinking is a human-centred

approach to innovation that uses the
designer’s toolkit to accommodate the
needs of people and the requirements for
the business’s success. Design thinking
brings together what is desirable from a
human’s prospects with what is
technologically and economically feasible,
(Kurokawa, T. 2015). Design thinking
approach focus on the user’s needs and
ways they can improve the users Figure Source: (Kurokawa, T. 2015)
experience. Design thinking = Business +
Human aspects + Technology, (Kurokawa, T. 2015). This formula summarises the definition
of Design Thinking. It connects all the elements in Figure 1.

4.2 Designing thinking approach: Principles

1. Services should be designed based on customer needs rather than the internal needs
of the business, (The Interaction Design Foundation, 2019). Therefore, the user is
more important than the aspects of the business for example, profit and growth.
2. Services should be designed based on a genuine comprehension of the purpose of
the service, the demand for the service and the ability of the service provider to
deliver that service, (The Interaction Design Foundation, 2019).
3. Services should be designed based on creating value for users and customers and to
be as efficient as possible, (The Interaction Design Foundation, 2019). In order to
create value for customer’s organisations but first understand what drives value for
their customers and what the customer need.

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 4. Services should always be designed with input from the users of the service, (The
Interaction Design Foundation, 2019). This is because users can offer valuable
feedback that can help business to improve service and can also assist them to
design future services. Therefore, it is vitally important that service providers listen,
understand and take on board their customer’s opinions, feedback and reviews.

4.3 Virgin Holidays: Design Think Approach

The Virgin Holiday Beach Longue is the world’s first beach departure lounge, (Holidays,
2019). This fantastic new service was designed to ensure the last day of customer’s holiday
is equally good to other days. The holiday provider does that by offering a service that allow
customers to relax on a beach while waiting for flight rather than in an airport. This service
allows customers to check in to the flight from the beach and to also check in their luggage
which is taken to the airport thus, is a great added value because customers do not have to
struggle with luggage. Instead they can chill luggage and hassle free and enjoy exclusive
facilities, drinks and food. Additionally, most hotels require customers to check out at
midday and often customer’s flights home are later down in the evening or even in the
night. Consequently, this shortens the customer’s holiday. Therefore, Virgin Atlantic Beach
Lounge provides a solution to this and accommodates the customers need.

Design Thinking Principles Virgin Atlantic Beach Lounge:

Firstly, this service was designed based on the customer needs because the service creates
value for customer because they access to the beach, food and drinks while they wait for
their flight. This design uses emotional innovation because customers are often left at
airports for hours. Virgin has exploited this issue by designing a service that is human
centred and is ultimately based on what their users desire and need. As a result, giving
customers what their desire makes them happy and will prompt them to reuse the service
thus, generate revenue and profitability.

From reading various literatures on Design thinking, I have used my own analytical thinking
to summarise some strengths and weakness for the design model. (See appendix 4)

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5.0 NEW SERVICE DEVELOPMENT (NSD) PROCESS CYCLE:

The NSD model identifies four key stages and 13 tasks that must be produced to launch a
new service as well as the components of the organisation which are involved in the process
(see figure 3). The combination of processes, human skills, technology and materials must
be appropriately integrated to design and produce a product or service, (Fitzsimmons et. al,
2014). Additionally, the NSD process is important for organisations planning to sustain and
grow using innovation, (Smith et. al, 2007).

Figure 3 Source: Fitzsimmons et. al, 2014)

1. Design stage:
The design stage starts with the idea generation and screening. Service innovation ideas can
generate from many sources such as customer and staff suggestions. After which new ideas
are screened to find the best one and the winning on is developed and tested. Finally, at this
stage the objective and strategy for the new service is formed.

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 2. Analysis stage:
The Analysis stage is where the business analysis takes place and the new service concept is
critically evaluated considering the strategic, financial and market potential. If the concept
has potential, the project will be authorised, and it will continue to the development stage.
3. Development stage
In the development stage the idea concept is transformed in to a new service. The new
concept is designed and tested. The internal infrastructures of the company’s competences
and resource e.g. employees, administrative support system and technology work together
to produce the new service. For example, the people element consists of employees who
must be trained to effectively deliver the new service.

4. Full launch stage:

This is the final stage of the NSD process cycle. At this stage the new service is offered and
available to market. At this stage the service feedback is gathered from customers. After
the launch is completed gathering post launch information i.e. customer feedback can help
to further develop the new service using the NSD process again.

5.2 Kingston University new Check-in system

Kingston University has recently designed and launch a new technological system that
allows students to use their ID cards and smart phones to register in class. Registering has
become easier and quicker with just a tap of the ID card or smart phone on the reader. This
new service design replaces the old paper registration which required students to sign the
sheet. The old method was time consuming to retrieve and calculate data accurately and
students would often miss the sheet even though they were present in class, as a result this
method was not dependable.

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NSD 4 key stages applied to Kingston University new design:
1. Design Stage: Firstly, the idea for a new registration system is
generated. This idea generated from the users which are the student and staff
feedback and suggestions. For example, end of module review forms.
2. Analysis stage: In this stage the idea is past to decision makers such as board for the
business analysis to determine if the new concept is good.
3. Design stage:
➢ The best design is chosen and tested by students and staff to see if it is more
effective and quicker to record attendance.
➢ Admin staff are trained how to retrieve information from the system
➢ IT technicians are trained to maintain the new system.
➢ Information about the new system is sent out to students and staff to make
them aware of how to use it.
4. Full launch: The product is launched in each class and lecture rooms and feedback is
gather from module review forms.

5.4 NSD Process Cycle: Critical analysis

The NSD process overall is very useful when designing new services because the model is
generic therefore, it can be used for any designing and service or product. Secondly this
process is easy to use for both Service and Product development which is important for
organisations planning to sustain and grow. On the other hand, the NSD process has
weaknesses that hinder its success. According to (Smith et. al, 2007), the NSD process can
be complex to use as some people may find the process over complicated. Also, the process
is time consuming because service providers may not have enough time to complete all four
stages. Finally, the NSD process can costly and often unsuccessful which would be a waste of
money and time for organisations (Smith et. al, 2007).

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6.0 DELIVERING NEW SERVICES: WHY IS SERVICE DELIVERY
IMPORTANT?

Customers and employees are two important stakeholders in an organisation. It is

imperative for employees to have good customer service skills in order to deliver a superb
provide service. Service delivery is important because it create and add value for customers,
i.e. receiving what is desired, or receiving quality for what is paid, Lodorfos, Kostopoulos and
Kaminakis, 2015). A good example of adding value for customers is booking a table at a
restaurant and you are gifted a free bottle of wine. This added value is delightful to the
customer, they enjoy the service and will book again. As a result, delivering excellent service
delivery is imperative to enhances the customers journey and experience and can further
create customer loyalty.

7.0 FACTORS TO CONSIDER WHEN DELIVERING SERVICES:

➢ Planning: Service organisations need to plan the delivery of their services and
to ensure the successful implementation of the actual plan.
➢ Good customer service: for example, train staff to improve their customer
service skills
➢ Customer involvement: Services should listen, understand and response to
customers. Customers are valuable stakeholders who can help to generate
new ideas, designs and ways to improve the service. The customers use the
service therefore; they have the most important feedback and suggestions
that should be taken on board.
➢ Total Quality Management (TQM): This involves monitoring the delivery of
services. This can be done by conducting regular staff appraisals every 3
months to ensure staffs are performing at their best.

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8.0 SERVICE DELIVERY SYSTEM (SDS):

The service delivery system should focus on what creates value for the organisation,
(Servicefutures.com, 2019). The SDS is a model that consists of four elements; service
design, service quality, employee engagement and customer experience. This model focuses
on how to engage frontline employees to deliver the best customer service. Service delivery
is most effective when all four elements are considered and in place because it is designed
to keep employees engage so that they can deliver a good quality customer service which
would encourage customers to use the service again, (Servicefutures.com, 2019).

8.1 SDS four elements:

Service Culture is elements of Figure 4 Source: (Servicefutures.com, 2019).

leadership principles, norms, work

habits and vision, mission and values. Management controls, maintains and develops the
social process that manifests itself as delivery of service and gives value to customers,
(Servicefutures.com, 2019).
Service Quality includes strategies, processes and performance management systems. The
strategy and process design are fundamental to the design of the overall service
management model, (Servicefutures.com, 2019).
Employee Engagement includes employee attitude, activities, purpose driven leadership
and HR processes. It is important for employees to have high engagement,
(Servicefutures.com, 2019).
Customer Experience includes elements of customer intelligence, account management and
continuous improvements. Successful service delivery works on the basis that the customer

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is a part of the creation and delivery of the service and then designs processes built on that
philosophy – this is called co-creation, (Servicefutures.com, 2019).

8.2 NHS: Service delivery system

This is an example of the NSH that illustrations how the NSH engage and motivates their
frontline staff to deliver a outstanding service to patients. I have applied my own knowledge
of the NHS to the SDS model.

NHS Service Culture:

▪ Executive and non-executive leaders create and install values, missions to employees
to create a strong organisational culture which influences the level of service
delivery
▪ Values: Trust – Innovation – Collaboration – Respect- Compassion
▪ Values and culture are installed at the beginning of the recruitment process because
at interviews applicants are asked ‘what are the Trust’s values. As a result, these
values are installed early into potential employees, so they already know what high
quality of service delivery is expected from them.

Employee Engagement:
▪ The NSH staff survey is designed to gather staff feedback to see how thing can be
improved, by respecting staffs feedback it keeps them engage and thus motivates
them.
▪ Additionally, weekly communication sent to staff emails to inform them of things
taken place with the trust or their area of work. Again. this is a fantastic technique to
keep staff engage
▪ Clinical and non-clinical staffs are members of the board which allows a wide
representation of staff members to voice feedbacks or concerns, this also involves
staff in decision making which ultimate keeps them in engaged at work.
▪ Moreover, engaged employees perform 20% better than employees who are not
engaged at work, (Search-proquest-com.ezproxy.kingston.ac.uk, 2019).

Customer Experience:

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 ▪ The customer experience is very important to all service providers. Patient surveys
are designed to gather feedback from patients. This allow service providers to see
what needs improving make the patient experience better.
▪ Co-Creation allows patients to be a part of the service delivery by asking them for
feedback, taking them on board, redesigning the service and improving the service
delivery.
Service quality:
▪ The NSH maintain high service quality with regular audits from the Care Quality
Commission (CQC). This ensures that services are operating with high quality care
and patients and staff are safe.
▪ Also, with regular Staff Appraisals manager can monitor staff performance to ensure
they are delivering a high standard service to patients.

9.0 Designing and delivering Products:

Product design process helps businesses to produce items, create and sell products that
appeal to customers. According to (Rodgers and Milton, 2011), product design is about
enriching quality of life by producing desirable products. Additionally, the creation of a new
product begins with an idea and ends with the production of a physical artifact. Rodger and
Milton describe some key stages involved in the product design process. Firstly, the process
starts with conducting research. After research is gathered the process moves on to the
brief stage where the customer needs are identified. The concept design is the third stage
that involves sketches, drawings, and renderings, (Rodgers and Milton, 2011). The next
stage is design development which produces prototypes. This allows the design detail stage
to follow; decision makers explore materials, manufacturing techniques and test them. This
allows them to find the best material to suit the product that has good quality and price
efficient. The final stage is production, this comprises of marketing and supply strategies to
distribute final products.

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 Designing & Delivery Products vs Design and Delivery Services:

Product design and service design both relay on process and extreme planning to produce
and delivery desirable high-quality products to customers. Services are created and
delivered at the same time whereas products can be stored and kept on shelves for long.
Also, services cannot be an inventory because services are intangible. Therefore, services
are more difficult to sell because customers can not touch and see them, most services are
experiences for example holidays. (see appendix 3)

Figure 5 Source: (Lopez-Ona, 2019)

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10.0 Conclusion:

To conclude, Designing and delivering services are significant to businesses. Designing new
services is an innovative tool that can assist business to have advantages over competitors
by having better designs and services that are desirable. Service design and delivery is
important to keep up with Social, demographics and external environment changes, e.g.
consumers spending habits. When designing and delivering services many factors should be
considered in order to prompt the success of the service. For example, the location of
service consumption. The Design Thinking and New Service Development (NSD) process
cycle are two good design processes that support business to be innovative and sustainable.
This report also depicts the prominence of good service delivery. The service delivery
system creates value for customers which attract and retain customer. For this reason, the
service delivery system focusses on how to engage frontline employees to deliver the best
customer service. Employee perform better when they are engaged, as a result, they will
deliver a better customer service and enhance the customers journey and experience.
Finally, the report examines the comparisons and differences with service and product
design for example products are tangible whereas, services are intangible. Therefore,
services are more difficult to sell because customers can not touch them; most services are
experiences for example holidays. This report illustrates the significance of service design
and delivery to sustain and grow a business and processes and models that can be used to
design and delivery exceptional services.

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11.0 REFERENCES:

Academic.mintel.com.ezproxy.kingston.ac.uk. (2019). Shibboleth Authentication Request.

[online] Available at:
http://academic.mintel.com.ezproxy.kingston.ac.uk/display/843035/?highlight#hit1
[Accessed 6 Feb 2019].
Fitzsimmons, J., Fitzsimmons, M. and Bordoloi, S. (2014). Service management. 8th ed. New
York: McGraw-Hill.
Holidays, V. (2019). The world’s first Departure Beach | Barbados | Virgin Holidays. [online]
Virginholidays.co.uk. Available at:
https://www.virginholidays.co.uk/destinations/caribbean/barbados-holidays/departure-
beach [Accessed 6 Feb. 2019].
Kurokawa, T. (2015). Service design and delivery: how design thinking can innovate business
and add value to society. New York: Business Expert Press Creation.
Lodorfos, G., Kostopoulos, G. and Kaminakis, K. (2015). The impact of service delivery system
effectiveness on service quality: a hierarchical approach. International Journal of Business
Performance Management, 16(2/3), p.169.
Lopez-Ona, J. (2019). Service Design vs. Product Design - 5 Key Differences | Qualtec's
Business Performance Improvement Blog. [online] Blog.ssqi.com. Available at:
http://blog.ssqi.com/2011/12/19/service-design-vs-product-design-difference/ [Accessed
12 Feb. 2019].
Rodgers, P. and Milton, A. (2011). Product design. London: Laurence King Pub.
Saleeth, H. (2019). Similarities Between Goods and Services. [online] Tutebox. Available at:
https://www.tutebox.com/2624/business/management/similarities-between-goods-and-
services/ [Accessed 12 Feb. 2019].
Servicefutures.com. (2019). Four Key Elements of a Service Delivery System. [online]
Available at: https://www.servicefutures.com/four-key-elements-service-delivery-system
[Accessed 3 Jan. 2019
Search-proquest-com.ezproxy.kingston.ac.uk. (2019). Shibboleth Authentication Request.
[online] Available at: https://search-proquest-
com.ezproxy.kingston.ac.uk/docview/1836963021?accountid=14557&rfr_id=info%3Axri%2F
sid%3Aprimo [Accessed 11 Feb. 2019].

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Smith, A., Fischbacher, M. and Wilson, F. (2007). New Service Development: From
Panoramas to Precision. European Management Journal, 25(5), pp.370-383.
The Interaction Design Foundation. (2018). Service Design - Design is Not Just for Products.
[online] Available at: https://www.interaction-design.org/literature/article/service-design-
design-is-not-just-for-products[Accessed 13 Dec. 2018].
The Interaction Design Foundation. (2019). The Principles of Service Design Thinking -
Building Better Services. [online] Available at: https://www.interaction-
design.org/literature/article/the-principles-of-service-design-thinking-building-better-
services [Accessed 3 Feb. 2019].

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12.0 APPENDIX: APPENDIX 1

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 APPENDIX 2

Video links:
https://www.youtube.com/watch?v=BeEUemtdoJQ
https://www.youtube.com/watch?v=ojqN3tZqcew
https://www.youtube.com/watch?v=svCG_3QgBys

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 APPENDIX 3 Source: (Saleeth, 2019)

Similarity Differences
Customer involvement Production

Starts with idea generation Manufacturing

Use of technology Prototypes

Concern for quality Raw materials

Location choice Distribution

Design layouts and production facilities Products can be invented

APPENDIX 4 Critical Analysis of Design Thinking Approach

Strengths Weaknesses

• Increases innovation • Does not guarantee successful design, service

or business.

• Useful for finding new ideas • Ideas obtained through the design thinking
process may not be useful.

• If successful increases competitive edge • Does not guarantee services will be delivered
or made available on time

• Puts the organisation in a good position to

generate revenue and profitability

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