the product development process of an enterprise from an ssme perspective

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  • EMPI RICAL ARTICLE

    The product development process of an enterprisefrom an SSME perspective

    Liang-Chuan Wu Ivan Shih

    Received: 1 August 2012 / Accepted: 4 February 2013

    Springer-Verlag Berlin Heidelberg 2013

    Abstract This study empirically explores a real-world manufacturer productdevelopment process from a service science perspective. In this era of keen global

    competition, the process of product development is crucial for companies before the

    final product is launched to the market. The poor development of a product can fail

    to meet customer needs and result in product failure, which can even lead to sig-

    nificant losses for manufacturers. However, traditional product development pro-

    cesses are much more manufacture-oriented rather than customer-involved. In this

    paper, we aim to use the Service science, management, and engineering (SSME)

    perspective, proposed by IBM, to improve product demand asymmetries by dis-

    covering true user requirements in order to enhance customer involvement and lead

    to better product development. We show how SSME is applied in the context of

    product development and in the discovery of customer needs, and propose a

    modified process based on SSME to the product development process.

    Keywords Service science Product development Process design Customer demand

    1 Introduction

    With intense commercial competition, the value and quality of services have

    significantly increased and surpassed any tangible product (Boix et al. 2012; Hau

    and Thuy 2012). Consequently, customer perceptions of and satisfaction with

    services are crucial. Consider the economic development of advanced countries as

    an example. In Europe, the United States, and Japan, the industrial structure is

    L.-C. Wu (&) I. ShihInstitute of Technology Management, National Chung Hsing University, 250, Kuo Kuang Road,

    Taichung 402, Taiwan, ROC

    e-mail: arthurwu@nchu.edu.tw

    123

    Serv Bus

    DOI 10.1007/s11628-013-0185-y

  • highly service-oriented insofar as regardless of the scale or number of employees,

    the service industry plays a central role in their national economy (Hartwig 2008).

    From the perspective of business and competitive strategies, because traditional and

    current business management theories and strategies are increasingly becoming

    obsolete or unable to provide competitive advantages, new business concepts and

    practices must be developed. Thus, the concept of Service Science, Management,

    and Engineering (SSME) (Maglio et al. 2006; Spohrer et al. 2010), which was

    initially introduced by IBM, has become a popular school of thought (Hidaka 2010).

    A service involves an interaction between particular entity types, either person to

    person or product to person, and has a value creation outcome. In recent decades,

    globalization and enhanced communication has increased service interactions (Jallat

    2004) resulting in todays service-oriented environment in which providing services

    that fully satisfy customer needs is an important task for enterprises. For this reason,

    this study employs the concept of SSME to develop an approach that enables

    enterprises to remain close to customers.

    The primary purpose of this study is to redesign the Treadmill Service Blueprint

    to improve the service processes and systematically and effectively satisfy customer

    demands from a service science perspective. Since academic discussion of the

    benefits of SSME is still in the early stages (Voss and Hsuan 2011), this study

    explores how SSME generates economic potential from an enterprise perspective.

    As case studies are one of the recommended research approaches for investigating

    how and why effects occur in the real world, this study uses a real-world case of a

    fitness equipment manufacturer to identify the benefits of using an SSME

    perspective and analyze its application in real life.

    For this case study, we first interviewed an international fitness equipment

    manufacturer to understand their product development process from a company

    perspective. Next, we distributed questionnaires among customers of gymnasiums,

    analyzing the returned results using the analytic hierarchy process (AHP) method

    (Saaty 1988; Saaty and Vargas 2012) to determine the customers implicit

    requirements. We then used the customers demands to redesign the product

    development process and create a new service blueprint.

    2 Theoretical background

    In the twenty-first century, the service industry has become the main component of

    international economic activity (Schneider and Bowen 2010). The SSME system,

    originally introduced by IBM, has the following three purposes (Maglio and Spohrer

    2008): (1) to provide a scientific method for measuring services, enabling the

    maximization of service productivity through engineered production processes; (2)

    to provide effective solutions when confronting a difficult problem; and (3) to

    develop a framework that can automatically develop innovation. SSME is employed

    as a knowledge base to integrate different innovation types, including technological

    innovation, business innovation, social/organizational innovation, and demand-side

    innovation (Hidaka 2006).

    L.-C. Wu, I. Shih

    123

  • Service science and business operations are closely related (Yu and Willoughby

    2012). From the providers perspective, service science is expected to increase

    service productivity, enhance business forecasts, and reduce business risks. From

    the customers perspective, service science is expected to balance product

    development and customer demand to develop products that can fully satisfy

    customer needs (Abe 2005). SSME is a concept that integrates numerous related

    fields, such as medical treatment, law and economics, industrial engineering,

    computer science, web services, information management, business strategies,

    cognitive science, and others (Maglio et al. 2010). In this way, SSME can be defined

    as a multidisciplinary approach for examining, creating, and improving the value

    co-creation process (Maglio and Spohrer 2008).

    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,

    the term service must be clarified. A service is the utilization of specialized

    competences through actions, processes, and performances for the benefit of the

    company or another entity (Vargo and Lusch 2004). Services are ideas, disciplines,

    and concepts, whereas products are tangible items. Customers experience tangible

    products differently than intangible services. Additionally, increasing competition

    in the sports and fitness industry has heightened demands for better quality services

    (Thompson 2011). To remain competitive, providers must be able to identify and

    meet the expectations of their target consumers (Papadimitriou and Karteroliotis

    2009), and as such, services are valuable co-creation processes conducted by the

    provider and with the customer (Vargo et al. 2008). In other words, services are no

    longer peripheral activities, but are instead an essential part of our society and form

    the core of most national economies. The demand for services, particularly

    innovative services, is endless (Crevani et al. 2011).

    Since manufacturers are increasingly facing slower growth, diversification of

    competitive products, and an inability to sustain product profitability, they have

    begun adopting service-based strategies to avoid these problems and maintain

    competitiveness (Anna 2011). Consequently, manufacturers are likely to become

    increasingly service- and customer-oriented. Manufacturers experiencing pressure

    to move closer to customers, improve product development processes, and create

    new products that meet customer demands must allow better communication among

    top management, marketing staff, designers, and engineers, to create better product

    development processes (McCain et al. 2004). Additionally, manufacturers have

    begun developing product-related services for their customers, providing the range

    of services required to use the product to increase customer loyalty.

    In the past two decades, obesity has increased dramatically (Flegal 2012).

    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

    people in modern society. The solution to obesity involves increasing peoples

    participation in exercise and improving their physical fitness. Fitness equipment

    allows people to exercise indoors, eliminating weather concerns and potential

    embarrassment. In the U.S., gyms and health and fitness clubs generate $25 billion

    annually (IBISworld 2011). The services provided by the recreational sports

    industry can be defined by their characteristics. In this industry, customers not only

    The product development process of an enterprise

    123

  • purchase services, but also actively participate in service production and consump-

    tion. Human performance is the primary product and customer experience is a major

    output (Ko and Pastore 2004). Since the fitness equipment industry involves

    substantial interaction with customers, we selected a fitness equipment provider as a

    case study to explore the service science approach.

    Previous studies have shown that