Towards an operations strategy for the infusion of product-centric services into manufacturing:service systems implementation

The work in this chapter is concerned with product-centric servitization. This is where a portfolio of services are formed and integrated to support product availability and use. Such servitization can be a valuable source of revenue for a manufacturer, yet little attention has been given to the configuration of the wider operations strategy that needs to be in place to deliver integrated products and services successfully. Therefore, the purpose of this chapter is to put forward a generic set of characteristics for such operations. Our intention is that these characteristics will be valuable to practitioners contemplating sophisticated forms of servitization, as they suggest the likely and significant changes that will be needed to the operations strategy of a conventional manufacturing organisation.

How habits, social ties, and economic switching barriers affect customer loyalty in contractual service settings

While existing literature acknowledges positive effects of satisfaction and economic switching barriers for building customer loyalty, studies analyzing interactions of these antecedents reveal mixed findings. Prior research does not consider, as antecedents of switching barriers, either habits or social ties that result from shared service-usage within a family or community. This paper contributes to the literature, first, by replicating the effects of satisfaction, economic switching barriers, and their interaction with customer loyalty and word-of-mouth of subscribers to a contractual service. Second, the study empirically tests the role of social ties as a social switching barrier. Third, the study introduces and tests the effects of habits as a precursor of economic and social switching barriers. Results reveal significant positive effects of satisfaction, economic switching barriers, and social ties on customer loyalty and word-of-mouth. Additionally, economic switching barriers and social ties interact significantly with satisfaction and habits act as a precursor of economic switching barriers and social ties.

Internal service quality and its impact on external service quality:a study of the role of internal customer types and the dimensions which are used to assess internal suppliers within an organisation and how this affects external service quality

This research explores the role of internal customers in the delivery of external service quality. It will consider any potentially different internal customer types that may exist within the organisation. Additionally, it will explore any potential differences in the dimensions that are used to measure service quality internally and externally. If there are different internal customer types then there may be different dimensions which are used to measure service quality between these types and this will be considered also. The approach adopted given the depth and breadth of understanding required, was an action research case based approach. The research objectives were:(i) To determine the dimensions of internal service quality between internal customer supplier cells. (ii) To determine what variation, if any, there is in the dimension sets between internal customer supplier cells. (iii) To determine any ranking in the dimensions that could exist by internal customer supplier cell type. (iv) To investigate the impact of internal service quality on external service quality over time. The research findings were: (i) The majority of the dimensions used in measuring external service quality were also used internally. There were additions of new dimensions however and some dimensions which were used externally, for internal use, had to be redefined. (ii) Variation in dimension sets were revealed during the research. Four different dimension sets were identified and these were matched with four different types of internal service interaction. (iii) Differences in the ranking of dimensions within each dimension set for each internal customer supplier cell type were confirmed. (iv) Internal service quality was seen to influence external service quality but at a cellular level rather than company level. At the company level, the average internal service quality at the start and finish of the research showed no improvement but external service quality had improved. Further investigation at the cellular level showed that improvements in internal service quality had occurred. Those improvements were found to be with the cells that were closest to the customer.The research implications were found to be: (i) some cells may not be necessary in the delivery of external service quality. (ii) The immediacy of the cell to the external customer and number of interactions into and out of that cell has the greatest effect on external customer satisfaction. (iii) Internal service quality may be driven by the customer affecting those cells at the front end of the business first. This then cascades back to those cells which are less immediate until ultimately the whole organisation shows improvements in internal service quality.

The definition, theoretical modelling and empirical research of front-line service employee corporate identity within a UK national grocery retailer:determining the FLE corporate brand identification construct

Over the past forty years the corporate identity literature has developed to a point of maturity where it currently contains many definitions and models of the corporate identity construct at the organisational level. The literature has evolved by developing models of corporate identity or in considering corporate identity in relation to new and developing themes, e.g. corporate social responsibility. It has evolved into a multidisciplinary domain recently incorporating constructs from other literature to further its development. However, the literature has a number of limitations. It remains that an overarching and universally accepted definition of corporate identity is elusive, potentially leaving the construct with a lack of clear definition. Only a few corporate identity definitions and models, at the corporate level, have been empirically tested. The corporate identity construct is overwhelmingly defined and theoretically constructed at the corporate level, leaving the literature without a detailed understanding of its influence at an individual stakeholder level. Front-line service employees (FLEs), form a component in a number of corporate identity models developed at the organisational level. FLEs deliver the services of an organisation to its customers, as well as represent the organisation by communicating and transporting its core defining characteristics to customers through continual customer contact and interaction. This person-to-person contact between an FLE and the customer is termed a service encounter, where service encounters influence a customer’s perception of both the service delivered and the associated level of service quality. Therefore this study for the first time defines, theoretically models and empirically tests corporate identity at the individual FLE level, termed FLE corporate identity. The study uses the services marketing literature to characterise an FLE’s operating environment, arriving at five potential dimensions to the FLE corporate identity construct. These are scrutinised against existing corporate identity definitions and models to arrive at a definition for the construct. In reviewing the corporate identity, services marketing, branding and organisational psychology literature, a theoretical model is developed for FLE corporate identity, which is empirically and quantitatively tested, with FLEs in seven stores of a major national retailer. Following rigorous construct reliability and validity testing, the 601 usable responses are used to estimate a confirmatory factor analysis and structural equation model for the study. The results for the individual hypotheses and the structural model are very encouraging, as they fit the data well and support a definition of FLE corporate identity. This study makes contributions to the branding, services marketing and organisational psychology literature, but its principal contribution is to extend the corporate identity literature into a new area of discourse and research, that of FLE corporate identity

How employer and employee satisfaction affect customer satisfaction:an application to franchise services

In small-service settings, how do owner satisfaction, front-line employee satisfaction, and customer satisfaction relate to one another? The authors use generalized exchange theory (GET) to examine how satisfaction levels of these three constituents are reciprocated. The authors examine a European franchise system comprising 50 outlets, 933 employees, and 20,742 customers. Their results show two important findings. First, the effect of owner-franchisee's satisfaction on customer satisfaction is fully mediated by front-line employee satisfaction. Thus, managers of a service outlet can strongly impact the satisfaction and behavioral intentions of their customer base, even without direct contact with them. Second, the link between customer satisfaction and purchase intention is moderated by employee satisfaction at an outlet. The link between customer satisfaction and customer purchase intentions is almost twice as strong when employees are satisfied than when they are not. Thus, there is a "doublepositive effect:" not only does higher employee satisfaction at an outlet directly lead to higher customer satisfaction but it also indirectly strengthens the association between customer satisfaction and their repurchase intentions.

Putting service relations to the test:how can negative consumer reactions of price increases be reduced?

Price increases seem to be an adequate way to improve the earnings of companies. This fact becomes especially crucial because of increased price competition in many markets. Price increases might lead to negative customer reactions, such as a lower perceived utility or a lower loyalty intention. Therefore, the question for managers remains how prices can be increased without losing customers. Results of our experimental study suggest that customers of energy suppliers rate the perceived utility of the offer relatively better when the price increase is combined with an additional modification of the product or accompanied by a new service. It becomes clear that intensifying service relations can offset the negative effects of price increases.

Market-awareness in service-based systems

Service-based systems are applications built by composing pre-existing services. During design time and according to the specifications, a set of services is selected. Both, service providers and consumers exist in a service market that is constantly changing. Service providers continuously change their quality of services (QoS), and service consumers can update their specifications according to what the market is offering. Therefore, during runtime, the services are periodically and manually checked to verify if they still satisfy the specifications. Unfortunately, humans are overwhelmed with the degree of changes exhibited by the service market. Consequently, verification of the compliance specification and execution of the corresponding adaptations when deviations are detected cannot be carried out in a manual fashion. In this work, we propose a framework to enable online awareness of changes in the service market in both consumers and providers by representing them as active software agents. At runtime, consumer agents concretize QoS specifications according to the available market knowledge. Services agents are collectively aware of themselves and of the consumers' requests. Moreover, they can create and maintain virtual organizations to react actively to demands that come from the market. In this paper we show preliminary results that allow us to conclude that the creation and adaptation of service-based systems can be carried out by a self-organized service market system. © 2012 IEEE.

Understanding innovation in outsourcing services

Recent years have witnessed an expansion in service industries such as finance, travel and retail. Firms in the services have shifted their traditional occupation with products to consider how value can be created and appropriated in the service industry [1]. In particular, information technology (IT) and IT-enabled business services have become central to a firm's ability to deliver value to its customers, driving firms to seek ways to improve their services and maintain their competitive position. In this regard, the last ten years have witnessed significant growth in the outsourcing industry which shifted from focus on low cost simple tasks such as coding to end-to-end delivery of services that range from IT services and customer services to more complex business services such as Finance and Accounting, Human Resources, Procurement, and knowledge-intensive services such as customer analysis and research services [2]. © 2012 Springer-Verlag.

Capabilities for advanced services:a multi-actor perspective

Servitization involves manufacturers developing service offerings to grow revenue and profit. Advanced services, in particular, can facilitate a more service-focused organization and impact customers' business processes significantly. However, approaches to servitization are often discussed solely from the manufacturer's perspective; overlooking the role of other network actors. Adopting a multi-actor perspective, this study investigates manufacturer, intermediary and customer perspectives to identify complementary and competing capabilities within a manufacturer's downstream network, required for advanced services. Interviews were conducted with 24 senior executives in 19 UK-based manufacturers, intermediaries and customers across multiple sectors. The study identified six key business activities, within which advanced services capabilities were grouped. The unique and critical capabilities for advanced services for each actor were identified as follows: manufacturers; the need to balance product and service innovation, developing customer-focused through-life service methodologies and having distinct, yet synergistic product and service cultures; intermediaries, the coordination and integration of third party products/services; customers, co-creating innovation and having processes supporting service outsourcing. The study is unique in highlighting the distinct roles of different actors in the provision of advanced services and shows that they can only be developed and delivered by the combination of complex interconnected capabilities found within a network.

Identification and analysis of moderator variables:investigating the customer satisfaction-loyalty link

Purpose – Research on the relationship between customer satisfaction and customer loyalty has advanced to a stage that requires a more thorough examination of moderator variables. Limited research shows how moderators influence the relationship between customer satisfaction and customer loyalty in a service context; this article aims to present empirical evidence of the conditions in which the satisfaction-loyalty relationship becomes stronger or weaker. Design/methodology/approach – Using a sample of more than 700 customers of DIY retailers and multi-group structural equation modelling, the authors examine moderating effects of several firm-related variables, variables that result from firm/employee-customer interactions and individual-level variables (i.e. loyalty cards, critical incidents, customer age, gender, income, expertise). Findings – The empirical results suggest that not all of the moderators considered influence the satisfaction-loyalty link. Specifically, critical incidents and income are important moderators of the relationship between customer satisfaction and customer loyalty. Practical implications – Several of the moderator variables considered in this study are manageable variables. Originality/value – This study should prove valuable to academic researchers as well as service and retailing managers. It systematically analyses the moderating effect of firm-related and individual-level variables on the relationship between customer satisfaction and loyalty. It shows the differential effect of different types of moderator variables on the satisfaction-loyalty link.

Analytics for customer engagement

In this article, we discuss the state of the art of models for customer engagement and the problems that are inherent to calibrating and implementing these models. The authors first provide an overview of the data available for customer analytics and discuss recent developments. Next, the authors discuss the models used for studying customer engagement, where they distinguish the following stages: customer acquisition, customer development, and customer retention. Finally, they discuss several organizational issues of analytics for customer engagement, which constitute barriers for introducing analytics for customer engagement.

The servitization of manufacturing:a systematic literature review of interdependent trends

Purpose: The servitization of manufacturing is a diverse and complex field of research interest. The purpose of this paper is to provide an integrative and organising lens for viewing the various contributions to knowledge production from those research communities addressing servitization. To achieve this, the paper aims to set out to address two principal questions, namely where are the knowledge stocks and flows amongst the research communities? And what are generic research concerns being addressed by these communities? Design/methodology/approach: Using an evidenced-based approach, the authors have performed a systematic review of the research literature associated with the servitization of manufacturing. This investigation incorporates a descriptive and thematic analysis of 148 academic and scholarly papers from 103 different lead authors in 68 international peer-reviewed journals. Findings: The work proposes support for the existence of distinct researcher communities, namely services marketing, service management, operations management, product-service systems and service science management and engineering, which are contributing to knowledge production in the servitization of manufacturing. Knowledge stocks within all communities associated with research in the servitization of manufacturing have dramatically increased since the mid-1990s. The trends clearly reveal that the operations community is in receipt of the majority of citations relating to the servitization of manufacturing. In terms of knowledge flows, it is apparent that the more mature communities are drawing on more locally produced knowledge stocks, whereas the emergent communities are drawing on a knowledge base more evenly distributed across all the communities. The results are indicative of varying degrees of interdependency amongst the communities. The generic research concerns being addressed within the communities are associated with the concepts of product-service differentiation, competitive strategy, customer value, customer relationships and product-service configuration. Originality/value: This research has further developed and articulated the identities of distinct researcher communities actively contributing to knowledge production in the servitization of manufacturing, and to what extent they are pursuing common research agendas. This study provides an improved descriptive and thematic awareness of the resulting body of knowledge, allowing the field of servitization to progress in a more informed and multidisciplinary fashion. © Emerald Group Publishing Limited.

A survey of semantic web services formalisms

The field of Semantic Web Services (SWS) has been recognized as one of the most promising areas of emergent research within the Semantic Web (SW) initiative, exhibiting an extensive commercial potential, and attracting significant attention from both industry and the research community. Currently, there exist several different frameworks and languages for formally describing a Web Service: OWL-S (Web Ontology Language for Services), WSMO (Web Service Modeling Ontology) and SAWSDL (Semantic Annotations for the Web Services Description Language) are the most important approaches. To the inexperienced user, choosing the appropriate paradigm for a specific SWS application may prove to be challenging, given a lack of clear separation between the ideas promoted by the associated research communities. In this paper, we systematically compare OWL-S, WSMO and SAWSDL from various standpoints, namely that of the service requester and provider as well as the broker based view. The comparison is meant to help users to better understand the strengths and limitations of these different approaches to formalising SWS, and to choose the most suitable solution for a given use case. © 2013 IEEE.

An aspect-oriented and model-driven approach for managing dynamic variability

Constructing and executing distributed systems that can adapt to their operating context in order to sustain provided services and the service qualities are complex tasks. Managing adaptation of multiple, interacting services is particularly difficult since these services tend to be distributed across the system, interdependent and sometimes tangled with other services. Furthermore, the exponential growth of the number of potential system configurations derived from the variabilities of each service need to be handled. Current practices of writing low-level reconfiguration scripts as part of the system code to handle run time adaptation are both error prone and time consuming and make adaptive systems difficult to validate and evolve. In this paper, we propose to combine model driven and aspect oriented techniques to better cope with the complexities of adaptive systems construction and execution, and to handle the problem of exponential growth of the number of possible configurations. Combining these techniques allows us to use high level domain abstractions, simplify the representation of variants and limit the problem pertaining to the combinatorial explosion of possible configurations. In our approach we also use models at runtime to generate the adaptation logic by comparing the current configuration of the system to a composed model representing the configuration we want to reach. © 2008 Springer-Verlag Berlin Heidelberg.