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design for service

for both service and manufacturing businesses


design for service contents 01 Introduction 02 Why it is beneficial to your company 03 How you can apply this to your company 04 Using design to improve services: examples 05 References


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Introduction

A new competitive environment Companies are under increasing pressure to provide personalised, customer-focused services. We live in a world where products and services are getting more and more commoditised, and companies are struggling to compete solely on price. In order to stand out from competitors, companies need to recognise themselves as service providers and strive to make what they do more useful, usable and desirable for their users.

Everyone loves a great experience. Whether going to the grocer’s, or shopping on-line, people always appreciate when things are easy and make sense. This makes them happy, and happy customers are worth more to every business. This guide is intended to give an overview of how you can use service design as a tool to win the hearts and minds of your customers by providing memorable experiences.

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01

Introduction

Like products, services can also be designed! Put simply, businesses can use design holistically to identify where, when and how a service can be improved and made more valuable to those who provide and receive it.

provider. These are usually called ‘touch points’, and include the brand, customer-facing staff, environments, sales and communications materials and channels.

Products and services differ in a number of ways. The main implication of those differences is that services, as opposed to products, rely on the interactions between the users and providers of the service.

For this reason, design for service is a very practical approach to implementing a wider, design-led business strategy. Small businesses can use design as a creative and accessible form of business planning to align their strategy, brand and communications around propositions that enhance customers’ experiences.

The design of services must include an analysis of all the points of contact between the user and the service

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02

Why it is beneficial to your company

We are living in the service century Today 89% of SMEs in Europe operate in some form of service industry. Twenty million people in the UK work in service organisations. The service economy now accounts for 72% of the UK’s gross domestic product (1). The importance of services to the economy will continue to grow, especially in industrialised countries where services account for the majority of GDP. For example, services comprise 80% and 71% of the GDP (2) of the USA and France, respectively. In this new economy, the added value created by services is far greater than that of products. As a simple example, when coffee beans are sold as an unprocessed commodity they have little value unless sold in bulk. If source: (1) Office for National Statistics (2) WP Carey School of Business

those beans are roasted and packaged the added value, potential price and opportunity for differentiation is much greater. Several steps beyond this would be to offer a freshly brewed cup of coffee, at which point the opportunities to add value through service become even greater. Companies such as Starbucks take this even further by employing experienced baristas to serve a wide range of drinks (but still focused on coffee) in a comfortable environment. They are no longer simply offering a cup of coffee, but a consistent experience to be shared with friends that will encourage customer loyalty, allow differentiation from the competition and increase profit.

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02

Why it is beneficial to your company

Everyone, like it or not, is a service provider The inclusion of good customer service is becoming a key differentiator for any type of company, be it product or service based. In this new economy it is the whole experience, before, during or after the sale that really counts. Customers are willing to pay a premium for products and services that help make their lives easier, more enjoyable and exciting. In the service century, even big product brands like Apple and IBM are developing services for their customers, realising that their products act as gateways or enablers of these services. The classic example is Apple and the integration between

the iPod and iTunes. IBM is also no longer positioning itself as a hardware manufacturer, but rather as a service provider by offering full IT solutions for its clients. Because every organisation, like it or not, is a service provider, staff need to realise that they are service providers too. For example, the telecoms engineer who goes up the mast to make sure that everything is working properly has an enormous influence on the service experience that customers have. Or a courier, whose manners and behaviour have a significant impact on customer’s experience.

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03

How you can apply this to your company

Five fundamentals of good service Services are delivered through dynamic service systems of people, processes and things – and often other services. This means they can appear complicated to improve – but they aren’t. In order to design better services, companies can look at the five fundamentals of good service to understand where, when and how things can be improved. These fundamentals can help you understand how different parts of a service system relate to each other and how each aspect of a service can affect a customer’s experience.

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The five fundamentals of good service

Systems

Value

Journeys

People

Propositions

Services are provided and experienced through systems and relationships. Most services are produced and consumed within, or rely on other services. Good service design always looks holistically at the service infrastructure. This involves understanding how the different parts of a service interconnect and how the service relies on the support of other services.

Different services create and measure value in different ways, but most services try to provide the best value for both users and producers. Good service design is often about aligning the sometimes superficially different interests of producers and users to create the best value for both. Service design can be about cutting costs, but it is normally more focused on adding value.

All services are experienced over time. People also take different journeys to, through, and from a service. Good service design recognises these differences and examines what happens before, during and after the central service experience, for both producers and users.

Services always involve people and rely on both the user and the producer working together. Some services are very product-centred, but a service is never just a product, it is always about people. Good service design always puts people first and should involve users and producers actively participating in the design process.

Services are generally packaged as a ‘proposition’ for users to buy into. A service proposition is a useful term to describe competing service offers in a competitive marketplace. Good service design is about developing and designing valuable, innovative propositions for users and producers, and creating exciting visions to take existing propositions forward.

This means that to improve an experience you may look to change things behind the scenes, such as implementing training programmes to customer-facing staff.

Companies like FedEx create value and save money by helping customers help themselves. By providing an on-line tracking system, customers can check when their packages will be delivered. This helps to avoid using a busy call centre to deal with customers’ enquires about deliveries.

Ultimately, frontline staff are the face of a company. In order to provide enjoyable experiences, you might need to ensure that your customerfacing staff are properly selected and trained.

This means that successful companies usually translate intangible service propositions into tangible and desirable offerings. For example, Innocent, the fruit drink maker, was founded on the desire to make it easier for people to maintain their health.

To provide enjoyable experiences companies need to understand how each point of contact between the user and provider affects the service delivery.

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How you can apply this to your company

Six elements of service design We can learn a lot about how to deliver great service experiences by looking at organisations who are excellent at it. When you look at these organisations, they usually excel under six headings: •Vision •Resources •Reliability •Responsiveness •Reassurance •Communication The following guide can be used to stimulate discussions about how your company can reveal areas for improvement.

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How you can apply this to your company

Element 1: Vision Excellent service organisations exhibit a clear vision about their goals and strategies. A vision for the future has to be based on an understanding of where the business is now, who you are serving and how you came to this point. Questions to ask should include: • What does your business offer your customers? • How does it afford to operate? • How did the business start? • What were the important landmarks (difficulties and successes)? • What is your turnover and how profitable is your business? • What are your core capabilities and strengths?

•Who are your customers and how can you identify which ones provide most income? • Why do your customers do business with you? • What are your customers’ needs (in addition to what you offer them)? • Who are – and how do you compare to – your competitors? •Are there any legislative, technological, market or cultural trends that will impact on your business?

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How you can apply this to your company

Element 2: Resources Excellent service organisations ensure that their appearance is appropriate and aligned with the service proposition. In order to get the appearance right, companies need to think about how the environments, staff, equipment and branding impact on the customers’ perceptions. Questions to ask should include: •Does your organisation design the environments that staff work in and customers are served in? •Have you made any changes as a result of customer and employee feedback? •Are there appropriate training programmes in place?

•What are your brand values? •Can all employees articulate what these values mean to their individual jobs and responsibilities? •How do they want to develop the brand going forward? •How do staff request resources needed to serve customers? •How often is the equipment used to serve customers re-evaluated? •How does the organisation measure its performance, and the performance of individuals within it?

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How you can apply this to your company

Element 3: Reliability To develop loyalty, customers and employees need to trust that the service is reliable and consistent – being the same or better each time they experience it. Being consistent also includes making sure that you don’t over-promise and under-deliver by raising expectations that can’t be met in all aspects of the business. All interactions with a customer during a single transaction should also be consistent in terms of your brand values and ease of use. As an example, an airline that offers easy on-line booking is not being consistent in offering convenience if once customers arrive at the airport there is a shortage of check-in staff or

no facility for automated check-in. Questions to ask should include: •What does your organisation promise your customers through your marketing and communications channels? •Do you deliver on these promises? •Are there any measures in place to ensure that your organisation does not over-promise? •Can you ensure that your services are consistent over time and across different channels? •Does your organisation deliver services that are easy for customers to use? •How usable and clear is your organisation’s website?

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How you can apply this to your company

Element 4: Responsiveness Being responsive means offering a service just when and where it is required by a particular customer. Being able to respond to the specific needs of a customer might be the difference between offering a mediocre or an enjoyable experience. In order to do so, employees might require some level of autonomy and flexibility at the point of delivery. If this is the case, staff will need to understand what their boundaries are and you will need to be aware of possible process barriers that might prevent a customer being happy. Questions to ask should include: •Does your organisation provide service when and where it is required?

•How does your organisation measure the speed and effectiveness of its services? •Does your organisation recognise the needs of different customers? •How well does it respond and react to these differences? •Do staff have the necessary autonomy to deliver a personalised service? •What are the barriers to providing more autonomy? •How willing are staff to serve customers? •How willing are they to go out of their way to ensure the customer is happy? •How willing is the organisation to let them do this?

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How you can apply this to your company

Element 5: Reassurance Everyone in your business should be competent, credible, honest and courteous. These capabilities and values will reassure your customers that they should be doing business with you. Getting this right will probably require a training and development programme to ensure employees have up-to-date customer service and technical skills. As well as offering a competent and credible face to your business, appropriately trained staff are more likely to take pride in their work, be more enthusiastic and stay with you for longer. Questions to ask should include: •How courteous are your staff?

•How does your organisation encourage a courteous working environment? •How does it train staff to be polite? •How secure and well managed are your organisation’s sensitive documents and customer relationships? •How effective are staff at managing customers’ expectations of the service? •How honest is your organisation with its customers about what to expect, and how honest is it when things go wrong? •What training programmes are in place to ensure that your employees have the necessary, most up-to-date knowledge to satisfy customers’ requirements?

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How you can apply this to your company

Element 6: Communication In order to build long-term relationships with both internal and external audiences, companies need to be able to communicate efficiently.

progressing. This helps to keep staff motivated and ensures that everyone is clear about the company’s objectives.

Communication is a two-way channel: companies need to advertise their offerings, but they also need to listen. This means understanding the fears, concerns and expectations of customers from different segments. For example, customer-facing staff should be able to engage in dialogue with customers and pass on any potential concerns to the management team.

Questions to ask include: •Do all people in your organisation understand the needs of different customers? •How does your organisation categorise its customers? •How do staff engage in dialogue with customers? •What happens to the output of this dialogue? •Does your organisation build long-term relationships with its customers? •Does your organisation regularly meet as a team to discuss progress?

Companies also need to focus on internal communication. Successful companies have a participatory culture in place, where staff can share ideas and discuss how the company is

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04

How design for service can help

Using design to improve service: examples

Developing a service vision and strategy •Assisting organisations to become more service focused •Developing and communicating a service-led vision and strategy •Designing-in service innovation processes

Designing the new service

These fictional examples are intended to be inspirational, not exhaustive. Service design could exist in many forms and be delivered in many ways depending on the business context. In these near-future case studies we have assumed that each SME worked with an experienced service design consultant or consultancy.

Broadly speaking, design for service can help SMEs in six ways: • Developing a service vision and strategy • Focusing on customers • Designing the new service • Developing internal processes • Creating better experiences • Creating and maintaining a brand.

Each case study will start by outlining the company’s current position and its business strengths and weaknesses. It will then go on to outline what a service design consultant might suggest so the company can capitalise on its service strengths, negate its service weaknesses and push the business forward in the service century.

Outlined in the table on the right are some specific activities which companies can benefit from. In order to exemplify how service design can be applied in practice, these methods and activities are highlighted in orange on the side of each example.

•Helping organisations to visualise the services they offer and how they offer them •Identifying new opportunities for innovation by looking at the whole system of service delivery •Working with internal teams and customers to innovate new services •Generating ideas, modelling, visualising and specifying new services •Managing risk through service prototyping

Creating better experiences •Measuring customers’ experiences across all the touch points of an organisation •Developing service values and principles that can be applied across the business •Designing the experiences that customers have of customer-facing staff •Working with customer-facing staff to improve these experiences •Designing the opportunities for customers to provide feedback and to participate

Focusing on customers •Working with senior managers to explore customer focus •Developing new insights into customers and the means to use them •Developing methods for customer-facing staff to provide feedback to senior staff •Developing customer-centred business metrics and designing-in the means to measure

Developing internal processes •Looking at what customers value most as a means to organise resources •Focusing internal processes around the needs of customers •Developing organisational structures that support staff who have direct contact with customers •Identifying opportunities to reduce overall costs to serve customers

Creating and maintaining a brand •Developing service brands •Helping internal teams to interpret their brand into new services and customer experiences

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Using design to improve service: examples Business context:

4.1 TildaTech Using a better understanding of their customers to inform the design of the service and to inspire new products and services.

Based in North Wales, TildaTech has 55 employees and a turnover of €14.8 million. At their factory they manufacture an electrical beauty therapy product. The equipment sells for €3,000 and requires annual servicing. Effective use of the equipment requires one day of training. Current customers of TildaTech are mainly beauty treatment salons and boutiques. These range from very small hair or nail salons wanting to offer a broader service — to established chains of private sports and health spas.

Strengths:

TildaTech promote their product via adverts in trade journals and attendance at key beauty therapy and health trade shows around Europe. The company have a website that is essentially an on-line brochure with technical details and regional agent contacts — a well- established network of distributors comprising 28 approved suppliers in 15 different countries. TildaTech were one of the first into the market and have an established presence. Their brand is known and respected in the beauty treatment sector.

Weaknesses:

Unfortunately for TildaTech, developments in technology are now lowering barriers to entry – meaning more competition. Until 18 months ago TildaTech’s product was one of only three products available for this treatment. Now more companies are offering inferior quality products at a lower cost that can achieve similar results. So far, TildaTech have focused on getting the technology and manufacturing quality right and developing a network of agents to aid distribution. The owners and senior management have all come from manufacturing backgrounds and consider TildaTech to be a manufacturing company.

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Working with service design consultants Through a workshop with TildaTech’s marketing team and three beauty therapists, the service design consultants helped the company to develop a customer segmentation model. This allowed them to understand the attitudes and behaviour of end-users – the people that actually use their products. After checking this model with some of their larger longstanding customers, the service designers helped TildaTech put together a panel of experienced end-users who now meet once a month. TildaTech use this panel to understand more about how, why, when and where people use beauty and health products and services.

Developing new insights into customers and the means to use them

Working with internal teams and customers to innovate new services

In a parallel project the service designers worked closely with the product development team to understand how they design and innovate products. It was essential that the user panel was integrated into the development process. The designers also helped the product development team to commission a customer insight programme that enabled them to learn even more about the people that use their products.

Designing-in service innovation processes

Although initially surprised by some of the ideas and opinions coming from the insight programme, the product development team came to see the value of putting users at the heart of their

Looking at what customers value most as a means to organise resources

creating the segmentation model

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development strategy. After six months the user panel was helping TildaTech to impress their customers by suggesting new service features and product functionality that the salons, spas and gyms had never considered.

discover

In a further workshop the development team looked at the sales processes that take place in salons, spas and gyms. The team identified an opportunity to provide more support to staff in their customers’ businesses. The designers were commissioned to carry out a detailed analysis of user journeys and to develop some simple support materials and web pages that helped to train staff when and how to explain the benefits of using TildaTech products. The brief to the designers was aimed at helping everybody to get the most out of TildaTech.

Developing organisational structures that support staff who have direct contact with customers

The success of the user insight programme gave the management team the confidence to hire service designers again a year later to help identify new customers for new higher-value products and services. Working closely with management and the sales and marketing teams, the service designers ran a series of customer-spotting workshops where they invited a range of people from diverse sectors to help anticipate future needs and markets. TildaTech identified cosmetic surgeries and other medical

Working with senior managers to explore customer focus

evolve excite

optimise inform

understanding the design process

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practices as a high growth, high margin sector. With their user panel already in place TildaTech were able to test early product and service ideas quickly, reducing risks and time to market. TildaTech has now established a welldeserved reputation amongst its customers for its user-focused product development, and is now a regional leader in the use of user insight and service innovation in manufacturing.

Working with internal teams and customers to innovate new services

Managing risk through service prototyping

Developing service brands

gaining user insight

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Using design to improve service: examples Business context:

4.2 Brecon Furniture Remaining competitive by translating a reputation for quality products into quality services.

Brecon Furniture manufacture high-end task seating for offices across Europe. Principal customers include corporate buyers of task seating for the office, independent office furniture retailers, and architectural and interior design specifiers. Seventy-five employees work in modern premises in Mid Wales, and last year the company reported turnover of â‚Ź26.7 million.

Strengths:

Brecon Furniture have a strong in-house design team. They have a clear design-led approach, with excellent attention to detail on product design and advertisements. They occasionally use highprofile external designers, and have effective ergonomic design techniques and good brand awareness amongst customers. They sell directly through their website, and they also have a single London showroom. However, most sales come through a network of independent, approved suppliers across Europe.

Weaknesses:

On the downside, Brecon Furniture have high manufacturing costs as all assembly and 50% of component manufacture is based in Wales. There is little scope for cost reduction on the UK manufacturing side of the business. Meanwhile competition is increasing as larger multinational manufacturers with foreign production bases are driving prices down. In addition, Brecon Furniture faces a new competitive threat from office solutions provided by companies such as IKEA, whose products are now of higher quality than before.

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Working with service design consultants Brecon Furniture have an established and deserved reputation for quality that comes from the high standards they employ at their manufacturing facility in Mid Wales. Quality in manufacturing can be mirrored by quality in service, but only if a company understands and supports its customerfacing staff — as Brecon Furniture found out to their advantage. With new and large competitors closing in, Brecon’s management team knew that they had to avoid competing on price, and that they risked losing competitive advantage on quality as the standard of their competitors’ products increased. They identified ‘service value’ as an opportunity to remain distinctive, to evolve their brand in the light of new entrants and to retain share at the midvolume, premium end of the market.

Assisting organisations to become more service focused

Through Design Wales they invited a service design consultancy located in the region to organise a series of open workshops with Brecon’s employees to explore how they could add ‘service value’ to their products. Many of the staff that serve Brecon’s customers directly were invited. The furniture delivery agents, not normally included in management decisions, identified ‘help and advice with installation’ as a major customer need.

Developing organisational structures that support staff who have direct contact with customers

open workshops

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Research with customers carried out by the service designers after the workshop confirmed this. The management team agreed that this was a real opportunity. Delivery agents and the service designers worked to develop a training package — and to train themselves — in providing advice to customers on installation. The new ‘Total Delivery’ service was designed and prototyped through the Brecon Furniture website with the help of the designers. This meant that management could carefully monitor and control the number of customers requesting the service, and ask for their feedback anonymously on-line. With feedback from customers very positive, and direct sales through the website up, Brecon Furniture were confident in the delivery agents as a vital source of customer intelligence – as well as a means to add ‘service value’. Brecon began to apply their own tried and tested approaches to quality to the ‘Total Delivery’ service. They integrated customer feedback from the delivery agents into the service development process and held bi-monthly meetings between designers and delivery agents. In one such meeting the agents reported that customers, becoming used to help

Identifying new opportunities for innovation by looking at the whole system of service delivery

Managing risk through service prototyping

Designing the experiences that customers have of customer-facing staff

Helping internal teams to interpret their brand into new services and customer experiences

generating ideas

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with installation, were commenting that they wished they had asked Brecon Furniture more questions in advance of placing their order. As Brecon already had significant expertise in ergonomic and human factors design, they realised that they could also assist (and profit from) offering customers office design and layout services to match their furniture product portfolio. During the following year, sales and delivery agents were trained to offer advice to customers to determine their requirements. Brecon developed expertise in advising on storage, the design of furniture solutions for flexible and multi-use spaces, and in the commercial analysis required to justify investing in quality. With a reputation for manufacturing quality and a new reputation for service, Brecon Furniture’s new ‘Total Office’ service proved very popular. Brecon Furniture’s expertise in translating human factors research into office environments, combined with their ability to design, supply and install office furniture, has won them new, larger contracts. The company now plans to extend their ‘Total Office’ service to a growing number of smaller customers by opening retail stores in three of the UK’s fastest-growing small-business districts, with customer service specialists as managers.

Generating ideas, modelling, visualising and specifying new services

Developing service brands

planning environments

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Using design to improve service: examples Business context:

Green Taxis is a very small start-up company in Cardiff, Wales’ largest city. The company wants to operate Cardiff’s first eco-taxi service with a fleet of hybrid petrol/electric vehicles. They aim to have 10 cars within 12 months.

4.3 Green Taxis Using service innovation and design to overcome the barriers to entering a well-served market with a new idea.

Strengths:

The company’s principal target market are corporate clients interested in demonstrating their corporate social responsibility through the use of environmentally-friendly services. It is intended that a relationship can be developed with corporate clients so that the majority of fares are paid for on account. In addition, Green Taxis want to target the public who want to book a taxi for travel around the city with the minimum impact on the environment.

Weaknesses:

Due to the significant cost for buying a licence to pick up from the bus, train station and airport, all passengers will need to be prebooked. There are 12 other well-established taxi firms operating in Cardiff. Green Taxis is the only eco-taxi service in the city. This gives them an advantage but also exposes the risk they are taking, as there is no sustained demonstration of demand. As they can’t pick up passengers at the kerbside, they rely on word of mouth, their brand, and a well-designed experience for their passengers of booking Green Taxis.

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Working with service design consultants Understanding the co-productive nature of service branding means working closely with customers. This is especially important for a service such as Green Taxis where their core service offer is based on selling a ‘lifestyle’ choice rather than low prices or efficiency. Service design helped Green Taxis understand this from the very beginning, making their approach a model for many new ecoservice companies across Europe. Initially, the service designers helped Green Taxis research the environmental position of large local corporate organisations. Once they had identified the most progressive organisations in the area, they contacted the personnel in charge of corporate social responsibility to tell them about the new service. Prior to the meetings they worked with the service designers to develop and visualise a range of marketing propositions they could offer the companies. After the meetings they went away and developed unique, co-branded service options for the companies. Some firms opted to sponsor individual taxis, some wanted a taxi outside their offices at all times, others decided to use their PR teams to highlight the relationship to the local media.

Helping internal teams to interpret their brand into new services and customer experiences

Developing new insights into customers and the means to use them

Helping organisations to visualise the services they offer and how they offer them

Generating ideas, modelling, visualising and specifying new services

customer thinking

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This carefully co-produced service branding meant that Green Taxis’ marketing and PR budget was completely financed by their customers — with plenty of profit left over to invest in acquiring more cars and drivers. The publicity from the large companies led new private customers to contact Green Taxis through their website, asking how they could be sure of always getting a Green Taxi. Working with the service designers again, Green Taxis identified two ways they could help these new customers access the taxi service, whilst keeping overheads low for the new company. First, Green Taxis’ knowledge of green activities and organisations in the area meant that they could set up a new website to promote green initiatives in Cardiff. The website encouraged smaller businesses to sign up to the site to receive tips and ideas on going green (and profiting from it). The site helped to build awareness of Green Taxis. Data on smaller firms was then used to identify the ‘greenest’ areas of the city, and Green Taxis began to directly market their service in these neighbourhoods. Second, working closely with several volunteer ‘green users’ who regularly hired the taxi service for private use, the service designers helped Green

Identifying opportunities to reduce overall costs to serve customers

Working with internal teams and customers to innovate new services

Designing the opportunities for customers to provide feedback and to participate

Developing new insights into customers and the means to use them

proposition development

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Taxis identify the barriers for private individuals using the service. They discovered that although these customers would prefer a Green Taxis to a normal taxi, they weren’t prepared to wait more than five minutes longer for a Green Taxi than a normal taxi. They also found that customers resented having to wait on hold when booking any taxis by telephone. Green Taxis worked with the service designers to design and implement a service for customers allowing them to use SMS to indicate their approximate location to be picked up from (a street name or a postcode). Provided the customer is near the city centre, Green Taxis can then reply by SMS immediately to reassure them that they will not have to wait more than five minutes. Green Taxis can now dispatch a car and call the customer back within five minutes.

Generating ideas, modelling, visualising and specifying new services

proposition specification

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References Academic Dr Bill Hollins http://www.wmin.ac.uk/wbs/page-228 Prof. Birgit Mager http://kisd.de/mager.html?lang=en Mads Clausen Institute, University of Southern Denmark http://www.mci.sdu.dk/m/GenInfo/GenInfo.htm

The list opposite details those who are developing and working with service design and where to find more information and guidance.

Design Innovation Education Centre (DIEC) http://www.onenortheast.co.uk/page/diec.cfm Emergence Conference, Carnegie Mellon University http://www.design.cmu.edu/emergence/2007/ Design Management Institute http://www.dmi.org/dmi/html/index.htm

Established Service Design Consultancies Engine http://www.enginegroup.co.uk Ideo http://www.ideo.com live|work http://www.livework.co.uk

This project has been commissioned by Design Wales and produced by Engine Service Design.

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service design design by engine service design www.enginegroup.co.uk


DESIGN FOR SERVICE