Exploring the financial consequences of the servitization of manufacturing

Commentators suggest that to survive in developed economies manufacturing firms have to move up the value chain, innovating and creating ever more sophisticated products and services, so they do not have to compete on the basis of cost. While this strategy is proving increasingly popular with policy makers and academics there is limited empirical evidence to explore the extent to which it is being adopted in practice. And if so, what the impact of this servitization of manufacturing might be. This paper seeks to fill a gap in the literature by presenting empirical evidence on the range and extent of servitization. Data are drawn from the OSIRIS database on 10,028 firms incorporated in 25 different countries. The paper presents an analysis of these data which suggests that: [i] manufacturing firms in developed economies are adopting a range of servitization strategies-12 separate approaches to servitization are identified; [ii] these 12 categories can be used to extend the traditional three options for servitization-product oriented Product-Service Systems, use oriented Product-Service Systems and result oriented Product-Service Systems, by adding two new categories "integration oriented Product-Service Systems" and "service oriented Product-Service Systems"; [iii] while the manufacturing firms that have servitized are larger than traditional manufacturing firms in terms of sales revenues, at the aggregate level they also generate lower profits as a % of sales; [iv] these findings are moderated by firm size (measured in terms of numbers of employees). In smaller firms servitization appears to pay off while in larger firms it proves more problematic; and [v] there are some hidden risks associated with servitization-the sample contains a greater proportion of bankrupt servitized firms than would be expected. © Springer Science + Business Media, LLC 2009.

Towards productivity indicators for performance-based façade design in commercial buildings

Decision-making in the façade design process has a significant influence on several aspects of indoor environment, thereby making it a complex and multi-objective optimisation process. There are two principal barriers in the process of indentifying an optimal façade solution. Firstly, most existing indoor environmental evaluation methods do not account for all the indoor environmental quality (IEQ) aspects relevant to façade design. Secondly, the relationship between the physical properties of a particular façade design option and the resulting economic benefits accrued during its service-life is unknown. In this paper, we introduce the bases for establishing relationships between occupant productivity and the combinatorial effects of four key façade-related IEQ aspects, namely, thermal comfort, aural comfort, visual comfort and air quality, on occupant productivity. The proposed framework's potential is tested against seven existing experimental investigations and its applicability is illustrated by a simple façade design example. The proposed approach ultimately aims to provide a quantitative economic measure of alternative façade design options that would be applicable to early design stage. Aspects of the work that require further experimental validation are identified. © 2012 Elsevier Ltd.

Dynamic Covariance Models for Multivariate Financial Time Series

The accurate prediction of time-changing covariances is an important problem in the modeling of multivariate financial data. However, some of the most popular models suffer from a) overfitting problems and multiple local optima, b) failure to capture shifts in market conditions and c) large computational costs. To address these problems we introduce a novel dynamic model for time-changing covariances. Over-fitting and local optima are avoided by following a Bayesian approach instead of computing point estimates. Changes in market conditions are captured by assuming a diffusion process in parameter values, and finally computationally efficient and scalable inference is performed using particle filters. Experiments with financial data show excellent performance of the proposed method with respect to current standard models.

Durability indicators of SCC towards performance-based specifications for the durability of SCC

The fundamental principle behind the development of SCC has been the nanoscale tailoring of cementitious matrices. Although self-compacting concrete (SCC) is currently used in many countries, there is a fundamental lack of the intrinsic durability of the material itself. The scope of the current paper is to present the outcomes of a research study on some principal indicators (porosity and capillary absorption) that define the durability of SCC, and how these are compared with the corresponding parameters of conventional concrete. Furthermore, this paper investigates the addition of industrial by-products, such as fly-ash or lime powder, to SCC mixtures and their effect on the durability indicators.

The user-value of rural electrification: An analysis and adoption of existing models and theories

User-value is a determining factor for product acceptance in product design. Research on rural electrification to date, however, does not draw sufficient attention to the importance of user-value with regard to the overall success of a project. This is evident from the analysis of project reports and applicable indicators from agencies active in the sector. Learning from the design, psychology and sociology literatures, it is important that rural electrification projects incorporate the value perception of the end-user and extend their success beyond the commonly used criteria of financial value, the appropriateness of the technology, capacity building and technology uptake. Creating value for the end-user is particularly important for project acceptance and the sustainability of a scheme once it has been handed over to the local community. In this research paper, existing theories and models of value-theory are transposed and applied to community operated rural electrification schemes and a user-value framework is developed. Furthermore, the importance of value to the end-user is clarified. Current literature on product design reveals that user-value has different properties, many of which are applicable to rural electrification. Five value pillars and their sub-categories important for the users of rural electrification projects are identified, namely: functional; social significance; epistemic; emotional; and cultural values. These pillars provide the main structure for the conceptual framework developed in this research paper. It is proposed that by targeting the values of the end-user, the key factors of user-value applicable to rural electrification projects will be identified and the sustainability of the project will be better ensured. © 2014 The Authors.