A classification model for product-service offerings

Organisations have been approaching servitisation in an unstructured fashion. This is partially because there is insufficient understanding of the different types of Product-Service offerings. Therefore, a more detailed understanding of Product-Service types might advance the collective knowledge and assist organisations that are considering a servitisation strategy. Current models discuss specific aspects on the basis of few (or sometimes single) dimensions. In this paper, we develop a comprehensive model for classifying traditional and green Product-Service offerings, thus combining business and green offerings in a single model. We describe the model building process and its practical application in a case study. The model reveals the various traditional and green options available to companies and identifies how to compete between services; it allows servitisation positions to be identified such that a company may track its journey over time. Finally it fosters the introduction of innovative Product-Service Systems as promising business models to address environmental and social challenges. © 2013 Elsevier Ltd. All rights reserved.

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.

An ontology-based service discovery approach for the provisioning of product-service bundles

More and more traditional manufacturing companies form or join inter-organizational networks to bundle their physical products with related services to offer superior value propositions to their customers. Some of these product-related services can be digitized completely and thus fully delivered electronically. Other services require the physical integration of external factors, but can still be coordinated electronically. In both cases companies and consumers face the problem of discovering appropriate product-related service offerings in the network or market. Based on ideas from the web service discovery discipline we propose a meet-in-the-middle approach between heavy-weight semantic technologies and simple boolean search to address this issue. Our approach is able to consider semantic relations in service descriptions and queries and thus delivers better results than syntax-based search. However – unlike most semantic approaches – it does not require the use of any formal language for semantic markup and thus requires less resources and skills for both service providers and consumers. To fully realize the potentials of the proposed approach a domain ontology is needed. In this research-in-progress paper we construct such an ontology for the domain of product-service bundles through analysis and synthesis of related work on service description. This will serve as an anchor for future research to iteratively improve and evaluate the ontology through collaborative design efforts and practical application.

Development of a supplier and purchase order management product/service under the 4PL logistics concept: a case study

Supply chain starts with a demand arisen and ends with material transport and delivery at its final destination. With this in mind, most of manufacturing, processors or distribution companies of consumer goods, spare parts and components for production, processing and finished goods, within national or international markets, may not have information and control over its supply chain performance. This article presents concept and logistics models evolution, purchase order and international supplier management, control tower and its logistics information systems. This also presents a real process implementation for a global high tech manufacturer company.

A strategy formulation process for the delivery of technology enabled service delivery systems

The Product Service Systems, servitization, and Service Science literature continues to grow as organisations seek to protect and improve their competitive position. The potential of technology applications to deliver service delivery systems facilitated by the ability to make real time decisions based upon ‘in the field’ performance is also significant. Research identifies four key questions to be addressed. Namely: how far along the servitization continuum should the organisation go in a single strategic step? Does the organisation have the structure and infrastructure to support this transition? What level of condition monitoring should it employ? Is the product positioned correctly in the value chain to adopt condition monitoring technology? Strategy consists of three dimensions, namely content, context, and process. The literature relating to PSS, servitization, and strategy all discuss the concepts relative to content and context but none offer a process to deliver an aligned strategy to deliver a service delivery system enabled by condition based management. This paper presents a tested iterative strategy formulation methodology which is the result of a structured development programme.

Challenges and Opportunities in Transforming Laser System Industry to Deliver Integrated Product and Service Offers

Part 4: Transition Towards Product-Service Systems

Flexible service systems

Service science combines scientific, management, and engineering disciplines to improve the understanding of how service systems cooperate to create business value. Service systems are complex configurations of people, technologies, and resources that coexist in a common environment of service provisioning. While the general concepts of service science are understood and agreed upon, the representation of service systems using models is still in its infancy. In this chapter, we look at business processes and their role in properly representing service systems. We propose flexible process graphs, a high-level process modeling language, and extend it in order to specify service systems and their compositions within shared environments in a flexible way. The discussion in this chapter is the first step towards a formal description of service science environment, including service systems, networks, and whole ecology.

The role of emotion in product, service and business model design

Designers have become aware of the importance of creating strong emotional experiences intertwined with new tangible products for the past decade, however an increased interest from firms has emerged in developing new service and business models as complimentary forms of emotion-driven innovation. This interdisciplinary study draws from the psychological sciences – theory of emotion – and the management sciences – business model literature to introduce this new innovation agenda. The term visceral hedonic rhetoric (VHR) is defined as the properties of a product, (and in this paper service and business model extensions) that persuasively induce the pursuit of pleasure at an instinctual level of cognition. This research paper lays the foundation for VHR beyond a product setting, presenting the results from an empirical study where organizations explored the possibilities for VHR in the context of their business. The results found that firms currently believe VHR is perceived in either their product and/or services they provide. Implications suggest shifting perspective surrounding the use of VHR across a firm’s business model design in order to influence the outcomes of their product and/or service design, resulting in an overall stronger emotional connection with the customer.

Stochastic optimization for adaptive labor staffing in service systems

Service systems are labor intensive. Further, the workload tends to vary greatly with time. Adapting the staffing levels to the workloads in such systems is nontrivial due to a large number of parameters and operational variations, but crucial for business objectives such as minimal labor inventory. One of the central challenges is to optimize the staffing while maintaining system steady-state and compliance to aggregate SLA constraints. We formulate this problem as a parametrized constrained Markov process and propose a novel stochastic optimization algorithm for solving it. Our algorithm is a multi-timescale stochastic approximation scheme that incorporates a SPSA based algorithm for ‘primal descent' and couples it with a ‘dual ascent' scheme for the Lagrange multipliers. We validate this optimization scheme on five real-life service systems and compare it with a state-of-the-art optimization tool-kit OptQuest. Being two orders of magnitude faster than OptQuest, our scheme is particularly suitable for adaptive labor staffing. Also, we observe that it guarantees convergence and finds better solutions than OptQuest in many cases.

Simultaneous perturbation methods for adaptive labor staffing in service systems

We consider the problem of optimizing the workforce of a service system. Adapting the staffing levels in such systems is non-trivial due to large variations in workload and the large number of system parameters do not allow for a brute force search. Further, because these parameters change on a weekly basis, the optimization should not take longer than a few hours. Our aim is to find the optimum staffing levels from a discrete high-dimensional parameter set, that minimizes the long run average of the single-stage cost function, while adhering to the constraints relating to queue stability and service-level agreement (SLA) compliance. The single-stage cost function balances the conflicting objectives of utilizing workers better and attaining the target SLAs. We formulate this problem as a constrained parameterized Markov cost process parameterized by the (discrete) staffing levels. We propose novel simultaneous perturbation stochastic approximation (SPSA)-based algorithms for solving the above problem. The algorithms include both first-order as well as second-order methods and incorporate SPSA-based gradient/Hessian estimates for primal descent, while performing dual ascent for the Lagrange multipliers. Both algorithms are online and update the staffing levels in an incremental fashion. Further, they involve a certain generalized smooth projection operator, which is essential to project the continuous-valued worker parameter tuned by our algorithms onto the discrete set. The smoothness is necessary to ensure that the underlying transition dynamics of the constrained Markov cost process is itself smooth (as a function of the continuous-valued parameter): a critical requirement to prove the convergence of both algorithms. We validate our algorithms via performance simulations based on data from five real-life service systems. For the sake of comparison, we also implement a scatter search based algorithm using state-of-the-art optimization tool-kit OptQuest. From the experiments, we observe that both our algorithms converge empirically and consistently outperform OptQuest in most of the settings considered. This finding coupled with the computational advantage of our algorithms make them amenable for adaptive labor staffing in real-life service systems.