Service design supports manufacturing servitization by: 1. Using user-centered techniques to better understand customers and value networks. 2. Representing service systems and customer journeys to visualize how value is co-created. 3. Creating value propositions centered on customer experiences rather than technologies. While companies saw benefits, challenges included unfamiliar service design lexicon and difficulty accessing customer insights for B2B. Further research through implementing concepts is needed to fully study service design's impact on servitization.

1. HOW SERVICE DESIGN SUPPORTS
MANUFACTURING SERVITIZATION
Ion Iriarte, Daniel Justel, Ester Val, Itsaso Gonzalez
Mondragon Unibertsitatea
Mondragon Goi Eskola Politeknikoa
Diseinu Berrikuntza Zentroa
3rd International Business Servitization Conference - Bilbao

2. Objective:
This presentation aims to discuss the potential
contributions of Service Design to manufacturing
servitization

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

4. 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 offered:
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)

5. 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.

6. 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?

7. 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.

8. 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.

9. 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)

10. 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)

11. Potential benefits of Service Design for a manufacturer
Potential 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.

12. 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
MANUFACTURING
COMPANY
1. SHOW THE POTENTIAL
OF SERVICE THINKING
2. EXPERIMENT WITH
SERVICE DESIGN
Introducing Service Design in manufacturing companies
Adapted from Beckman & Barry (2007)

13. 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.

14. 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
MANUFACTURING
COMPANY
SHOW THE POTENTIAL
OF SERVICE THINKING
BACBusiness
Acceleration
Center de
MONDRAGON
DESIGNERS
RESEARCH
TEAM
Actions to generate curiosity, create
interest and show the potential
through examples of the application of
Service Design methods and tools

15. EXPLORE
DEVELOP
IDEATE
SHOW
EXPERIMENT
INGINEERING
EXPERIMENT WITH
SERVICE DESIGN
MANUFACTURING
COMPANY
MARKET
MANAGEMENT
RESEARCH
TEAM
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

16. 4 cases:
- Household Appliances manufacturer
- Sporting goods manufacturer (SME)
- Automotive components manufacturer
- Locking System manufacturer (SME)

17. 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)

18. 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.

19. 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

20. 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.

21. 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).

22. 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.

23. 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):

24. 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.

25. ESKERRIK ASKO!!
THANK YOU!!
iiriarte@mondragon.edu