The product development process of an enterprise from an SSME perspective

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<ul><li><p>EMPI RICAL ARTICLE</p><p>The product development process of an enterprisefrom an SSME perspective</p><p>Liang-Chuan Wu Ivan Shih</p><p>Received: 1 August 2012 / Accepted: 4 February 2013</p><p> Springer-Verlag Berlin Heidelberg 2013</p><p>Abstract This study empirically explores a real-world manufacturer productdevelopment process from a service science perspective. In this era of keen global</p><p>competition, the process of product development is crucial for companies before the</p><p>final product is launched to the market. The poor development of a product can fail</p><p>to meet customer needs and result in product failure, which can even lead to sig-</p><p>nificant losses for manufacturers. However, traditional product development pro-</p><p>cesses are much more manufacture-oriented rather than customer-involved. In this</p><p>paper, we aim to use the Service science, management, and engineering (SSME)</p><p>perspective, proposed by IBM, to improve product demand asymmetries by dis-</p><p>covering true user requirements in order to enhance customer involvement and lead</p><p>to better product development. We show how SSME is applied in the context of</p><p>product development and in the discovery of customer needs, and propose a</p><p>modified process based on SSME to the product development process.</p><p>Keywords Service science Product development Process design Customer demand</p><p>1 Introduction</p><p>With intense commercial competition, the value and quality of services have</p><p>significantly increased and surpassed any tangible product (Boix et al. 2012; Hau</p><p>and Thuy 2012). Consequently, customer perceptions of and satisfaction with</p><p>services are crucial. Consider the economic development of advanced countries as</p><p>an example. In Europe, the United States, and Japan, the industrial structure is</p><p>L.-C. Wu (&amp;) I. ShihInstitute of Technology Management, National Chung Hsing University, 250, Kuo Kuang Road,</p><p>Taichung 402, Taiwan, ROC</p><p>e-mail: arthurwu@nchu.edu.tw</p><p>123</p><p>Serv Bus</p><p>DOI 10.1007/s11628-013-0185-y</p></li><li><p>highly service-oriented insofar as regardless of the scale or number of employees,</p><p>the service industry plays a central role in their national economy (Hartwig 2008).</p><p>From the perspective of business and competitive strategies, because traditional and</p><p>current business management theories and strategies are increasingly becoming</p><p>obsolete or unable to provide competitive advantages, new business concepts and</p><p>practices must be developed. Thus, the concept of Service Science, Management,</p><p>and Engineering (SSME) (Maglio et al. 2006; Spohrer et al. 2010), which was</p><p>initially introduced by IBM, has become a popular school of thought (Hidaka 2010).</p><p>A service involves an interaction between particular entity types, either person to</p><p>person or product to person, and has a value creation outcome. In recent decades,</p><p>globalization and enhanced communication has increased service interactions (Jallat</p><p>2004) resulting in todays service-oriented environment in which providing services</p><p>that fully satisfy customer needs is an important task for enterprises. For this reason,</p><p>this study employs the concept of SSME to develop an approach that enables</p><p>enterprises to remain close to customers.</p><p>The primary purpose of this study is to redesign the Treadmill Service Blueprint</p><p>to improve the service processes and systematically and effectively satisfy customer</p><p>demands from a service science perspective. Since academic discussion of the</p><p>benefits of SSME is still in the early stages (Voss and Hsuan 2011), this study</p><p>explores how SSME generates economic potential from an enterprise perspective.</p><p>As case studies are one of the recommended research approaches for investigating</p><p>how and why effects occur in the real world, this study uses a real-world case of a</p><p>fitness equipment manufacturer to identify the benefits of using an SSME</p><p>perspective and analyze its application in real life.</p><p>For this case study, we first interviewed an international fitness equipment</p><p>manufacturer to understand their product development process from a company</p><p>perspective. Next, we distributed questionnaires among customers of gymnasiums,</p><p>analyzing the returned results using the analytic hierarchy process (AHP) method</p><p>(Saaty 1988; Saaty and Vargas 2012) to determine the customers implicit</p><p>requirements. We then used the customers demands to redesign the product</p><p>development process and create a new service blueprint.</p><p>2 Theoretical background</p><p>In the twenty-first century, the service industry has become the main component of</p><p>international economic activity (Schneider and Bowen 2010). The SSME system,</p><p>originally introduced by IBM, has the following three purposes (Maglio and Spohrer</p><p>2008): (1) to provide a scientific method for measuring services, enabling the</p><p>maximization of service productivity through engineered production processes; (2)</p><p>to provide effective solutions when confronting a difficult problem; and (3) to</p><p>develop a framework that can automatically develop innovation. SSME is employed</p><p>as a knowledge base to integrate different innovation types, including technological</p><p>innovation, business innovation, social/organizational innovation, and demand-side</p><p>innovation (Hidaka 2006).</p><p>L.-C. Wu, I. Shih</p><p>123</p></li><li><p>Service science and business operations are closely related (Yu and Willoughby</p><p>2012). From the providers perspective, service science is expected to increase</p><p>service productivity, enhance business forecasts, and reduce business risks. From</p><p>the customers perspective, service science is expected to balance product</p><p>development and customer demand to develop products that can fully satisfy</p><p>customer needs (Abe 2005). SSME is a concept that integrates numerous related</p><p>fields, such as medical treatment, law and economics, industrial engineering,</p><p>computer science, web services, information management, business strategies,</p><p>cognitive science, and others (Maglio et al. 2010). In this way, SSME can be defined</p><p>as a multidisciplinary approach for examining, creating, and improving the value</p><p>co-creation process (Maglio and Spohrer 2008).</p><p>At present, the service industry accounts for *75 % of the U.S. economy(Schneider and Bowen 2010). To fully appreciate the substantial output of services,</p><p>the term service must be clarified. A service is the utilization of specialized</p><p>competences through actions, processes, and performances for the benefit of the</p><p>company or another entity (Vargo and Lusch 2004). Services are ideas, disciplines,</p><p>and concepts, whereas products are tangible items. Customers experience tangible</p><p>products differently than intangible services. Additionally, increasing competition</p><p>in the sports and fitness industry has heightened demands for better quality services</p><p>(Thompson 2011). To remain competitive, providers must be able to identify and</p><p>meet the expectations of their target consumers (Papadimitriou and Karteroliotis</p><p>2009), and as such, services are valuable co-creation processes conducted by the</p><p>provider and with the customer (Vargo et al. 2008). In other words, services are no</p><p>longer peripheral activities, but are instead an essential part of our society and form</p><p>the core of most national economies. The demand for services, particularly</p><p>innovative services, is endless (Crevani et al. 2011).</p><p>Since manufacturers are increasingly facing slower growth, diversification of</p><p>competitive products, and an inability to sustain product profitability, they have</p><p>begun adopting service-based strategies to avoid these problems and maintain</p><p>competitiveness (Anna 2011). Consequently, manufacturers are likely to become</p><p>increasingly service- and customer-oriented. Manufacturers experiencing pressure</p><p>to move closer to customers, improve product development processes, and create</p><p>new products that meet customer demands must allow better communication among</p><p>top management, marketing staff, designers, and engineers, to create better product</p><p>development processes (McCain et al. 2004). Additionally, manufacturers have</p><p>begun developing product-related services for their customers, providing the range</p><p>of services required to use the product to increase customer loyalty.</p><p>In the past two decades, obesity has increased dramatically (Flegal 2012).</p><p>Currently, *50 % of adults and 25 % of children in the U.S. are overweight(French et al. 2001). Thus, effective weight loss has become an important task for</p><p>people in modern society. The solution to obesity involves increasing peoples</p><p>participation in exercise and improving their physical fitness. Fitness equipment</p><p>allows people to exercise indoors, eliminating weather concerns and potential</p><p>embarrassment. In the U.S., gyms and health and fitness clubs generate $25 billion</p><p>annually (IBISworld 2011). The services provided by the recreational sports</p><p>industry can be defined by their characteristics. In this industry, customers not only</p><p>The product development process of an enterprise</p><p>123</p></li><li><p>purchase services, but also actively participate in service production and consump-</p><p>tion. Human performance is the primary product and customer experience is a major</p><p>output (Ko and Pastore 2004). Since the fitness equipment industry involves</p><p>substantial interaction with customers, we selected a fitness equipment provider as a</p><p>case study to explore the service science approach.</p><p>Previous studies have shown that service evaluations are related to customers</p><p>behavioral intentions and habits (Backman and Veldkamp 1995; Baker and</p><p>Crompton 2000; Chang et al. 2013). It is the goal of this study, therefore, to analyze</p><p>customers implicit requirements. Among the various demands and questionnaires</p><p>developed to analyze service processes, the AHP method proposed by is an</p><p>excellent tool for prioritizing a set of alternatives and determining the relative</p><p>importance of attributes of multiple criteria decision-making problems. Thus, the</p><p>various aspects of the AHP method have been widely discussed (Schniederjans and</p><p>Wilson 1991). Given that this method employs pairwise comparisons of hierarchi-</p><p>cally organized elements to produce a set of priorities (Saaty 1988), AHP assists</p><p>decision makers in solving problems in establishing a hierarchical structure and</p><p>determining the weights of each element to simplify complex decision-making</p><p>assessments into a series of simple comparisons. The AHP method can thus enable</p><p>decision makers to make optimum decisions (Ounnar and Pujo 2012). Specifically</p><p>in this study, AHP in the form of questionnaires to determine customers implicit</p><p>requirements can provide clear data for each element, which enables us to better</p><p>distinguish customer demands and extend the applications of SSME.</p><p>Service blueprinting is a process analysis method proposed by Shostack (1982)</p><p>that is included in SSME to demonstrate the design of services. Since todays firms</p><p>have evolved to be more customer-based, service blueprinting has become a useful</p><p>tool for service process analysis (Zeithaml et al. 2009). This method of process</p><p>analysis involves the description of all activities involved in the designing and</p><p>managing of services, including schedules, project plans, detailed design represen-</p><p>tations, and service platforms. Service blueprints comprise the following five</p><p>components (Bitner et al. 2008): (1) customer actions: this includes all the steps</p><p>that customers conduct as part of the service delivery process; (2) onstage/visible</p><p>contact employee actions: these are the actions performed by frontline employees as</p><p>part of a face-to-face interaction with customers; (3) backstage/invisible contact</p><p>employee actions: these are invisible employee-customer interactions and other</p><p>activities that employees undertake to serve customers; (4) support processes: all</p><p>activities conducted by individuals within a company who are not contact</p><p>employees, but whose functions are important to completing the services processes;</p><p>(5) physical evidence: this represents all the tangibles that customers are exposed to</p><p>or collect during their contact with a company. This study uses service blueprints to</p><p>represent the interaction between customers and treadmills to identify customer</p><p>actions, the support processes provided by onstage and backstage employees, and</p><p>other support processes.</p><p>The primary objective of this study is to apply the service science approach in an</p><p>industry case. We employ a real-world case as an example to clarify the service</p><p>science approach and identify users demands of treadmills. By applying the tools</p><p>L.-C. Wu, I. Shih</p><p>123</p></li><li><p>supported by SSME, we develop an improved process to satisfy treadmill users,</p><p>thereby providing a systematic SSME method.</p><p>3 Case study and research methodology</p><p>3.1 Introduction</p><p>This study aims to improve user satisfaction for a real-world fitness equipment</p><p>manufacturer (Company A) by conducting a case study. Company A manufactures</p><p>fitness equipments, and given that among these the treadmill is the most popular, it</p><p>will be the target of our investigation. Company A was founded in 1975 when it</p><p>mainly produced and sold dumbbells and barbells. After 3 years, Company A</p><p>became the worlds largest supplier of weightlifting equipment, demonstrating its</p><p>success as a manufacturing enterprise. However, to obtain a greater brand edge,</p><p>Company A developed its own brand X in 1995, which was primarily targeted to the</p><p>fitness equipment store market. In 1999, they then founded their second brand Y,</p><p>which was sold directly to the discount store market in 60 countries around the world</p><p>through 65 dealers. Company A expanded rapidly after the creation of its brand X, its</p><p>earnings and profit increasing by 30 % for five consecutive years. By 2001, Company</p><p>A had become a worldwide fitness group that owned four brands. In 2004, Company</p><p>A created its own research center in the U.S. to collect users opinions and</p><p>suggestions regarding fitness equipment, which was then manufactured at a factory</p><p>in Taiwan. Since Company As product development process has been similar to the</p><p>concept of SSME, conducting an SSME analysis is relatively straightforward.</p><p>Company As best-selling product in 2004 was the treadmill and the elliptical</p><p>trainer, both combined accounting for 74 % of its total exports. Today, Company A</p><p>is a large-scale company although its product growth rate has diminished. As such,</p><p>to continually increase its number of orders, Company A needs to fulfill its</p><p>customers explicit requirements and create innovative products that attract</p><p>customers. In this way, SSME is an excellent method for conducting further</p><p>investigations into customer demands, and because Company A already has its own</p><p>method of responding to customer demands, they can use SSME to extend their</p><p>understanding of customer needs.</p><p>As mentioned previously, in light of the fact that the service customers experience</p><p>influences their enthusiasm to continue using the product, suppliers must be able to</p><p>identify customer demands and satisfy their expectations. Since Company A has</p><p>become a widely known international enterprise, it is imperative that it provides an</p><p>appropriate service that satisfies customer demands. SSME considers that customer in</p><p>product design enables...</p></li></ul>

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