The practical challenges of servitized manufacture

Servitization is now widely recognised as the process of creating value by adding services to products. Since this term was first coined in the late 1980s it has been studied by a range of authors who have specifically sought to understand the methods and mechanisms of service-led competitive strategies for manufacturers. This paper reports on the experiences of a large company as they have moved towards servitized manufacture. This has been based on an extensive series of interviews with key personnel. The results of the study and implications for research are all reported.

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.

Leadership in high-value services for manufacturers:advanced services and their impact on vertical integration

The debate about services-led competitive strategies continues to grow with much interest emerging around the differing practices between production and servitised operations. This paper contributes to this discussion byinvestigating the vertical integration practice (in particular the micro-vertical integration otherwise known as the supply chain position)of manufacturers who are successful in their adoption of servitization.Although these are preliminary findings from a longer-term research programme, through this technical note we seek to simultaneously contribute to the debate in the research community and offer guidance to practitioners exploring the consequences of servitization. Keyword: Servitization, Product-Service Systems, Through-life Services.

Managing enterprise resource planning and multi-organisational enterprise governance:a new contingency framework for the enterprisation of operations

This research has been undertaken to determine how successful multi-organisational enterprise strategy is reliant on the correct type of Enterprise Resource Planning (ERP) information systems being used. However there appears to be a dearth of research as regards strategic alignment between ERP systems development and multi-organisational enterprise governance as guidelines and frameworks to assist practitioners in making decision for multi-organisational collaboration supported by different types of ERP systems are still missing from theoretical and empirical perspectives. This calls for this research which investigates ERP systems development and emerging practices in the management of multi-organisational enterprises (i.e. parts of companies working with parts of other companies to deliver complex product-service systems) and identify how different ERP systems fit into different multi-organisational enterprise structures, in order to achieve sustainable competitive success. An empirical inductive study was conducted using the Grounded Theory-based methodological approach based on successful manufacturing and service companies in the UK and China. This involved an initial pre-study literature review, data collection via 48 semi-structured interviews with 8 companies delivering complex products and services across organisational boundaries whilst adopting ERP systems to support their collaborative business strategies – 4 cases cover printing, semiconductor manufacturing, and parcel distribution industries in the UK and 4 cases cover crane manufacturing, concrete production, and banking industries in China in order to form a set of 29 tentative propositions that have been validated via a questionnaire receiving 116 responses from 16 companies. The research has resulted in the consolidation of the validated propositions into a novel concept referred to as the ‘Dynamic Enterprise Reference Grid for ERP’ (DERG-ERP) which draws from multiple theoretical perspectives. The core of the DERG-ERP concept is a contingency management framework which indicates that different multi-organisational enterprise paradigms and the supporting ERP information systems are not the result of different strategies, but are best considered part of a strategic continuum with the same overall business purpose of multi-organisational cooperation. At different times and circumstances in a partnership lifecycle firms may prefer particular multi-organisational enterprise structures and the use of different types of ERP systems to satisfy business requirements. Thus the DERG-ERP concept helps decision makers in selecting, managing and co-developing the most appropriate multi-organistional enterprise strategy and its corresponding ERP systems by drawing on core competence, expected competitiveness, and information systems strategic capabilities as the main contingency factors. Specifically, this research suggests that traditional ERP(I) systems are associated with Vertically Integrated Enterprise (VIE); whilst ERPIIsystems can be correlated to Extended Enterprise (EE) requirements and ERPIII systems can best support the operations of Virtual Enterprise (VE). The contribution of this thesis is threefold. Firstly, this work contributes to a gap in the extant literature about the best fit between ERP system types and multi-organisational enterprise structure types; and proposes a new contingency framework – the DERG-ERP, which can be used to explain how and why enterprise managers need to change and adapt their ERP information systems in response to changing business and operational requirements. Secondly, with respect to a priori theoretical models, the new DERG-ERP has furthered multi-organisational enterprise management thinking by incorporating information system strategy, rather than purely focusing on strategy, structural, and operational aspects of enterprise design and management. Simultaneously, the DERG-ERP makes theoretical contributions to the current IS Strategy Formulation Model which does not explicitly address multi-organisational enterprise governance. Thirdly, this research clarifies and emphasises the new concept and ideas of future ERP systems (referred to as ERPIII) that are inadequately covered in the extant literature. The novel DERG-ERP concept and its elements have also been applied to 8 empirical cases to serve as a practical guide for ERP vendors, information systems management, and operations managers hoping to grow and sustain their competitive advantage with respect to effective enterprise strategy, enterprise structures, and ERP systems use; referred to in this thesis as the “enterprisation of operations”.

Developing a serious game for PSS

Purpose: This paper presents the system architecture of a serious game, which is going to be run in parallel to Rolls Royce tra ining on product-service systems (PSS). Design/methodology/approach: The original game is outlined, requirements for an onl ine version are defined, and the architecture is proposed. Findings: The games approach has proven its value in design for service tra ining but an online version is needed to improve the opportunit ies to deliver the game. Originality/value: Such a system presents opportunities for the acquisition and development of specific professional knowledge, skills, and competencies

Towards a Framework for Analyzing and Evaluating Servitization Potential: Case Study of ENVIE Loire

Part 4: Transition Towards Product-Service Systems

Developing smart services by Internet of Things in manufacturing business

Manufacturing companies have passed from selling uniquely tangible products to adopting a service-oriented approach to generate steady and continuous revenue streams. Nowadays, equipment and machine manufacturers possess technologies to track and analyze product-related data for obtaining relevant information from customers’ use towards the product after it is sold. The Internet of Things on Industrial environments will allow manufacturers to leverage lifecycle product traceability for innovating towards an information-driven services approach, commonly referred as “Smart Services”, for achieving improvements in support, maintenance and usage processes. The aim of this study is to conduct a literature review and empirical analysis to present a framework that describes a customer-oriented approach for developing information-driven services leveraged by the Internet of Things in manufacturing companies. The empirical study employed tools for the assessment of customer needs for analyzing the case company in terms of information requirements and digital needs. The literature review supported the empirical analysis with a deep research on product lifecycle traceability and digitalization of product-related services within manufacturing value chains. As well as the role of simulation-based technologies on supporting the “Smart Service” development process. The results obtained from the case company analysis show that the customers mainly demand information that allow them to monitor machine conditions, machine behavior on different geographical conditions, machine-implement interactions, and resource and energy consumption. Put simply, information outputs that allow them to increase machine productivity for maximizing yields, save time and optimize resources in the most sustainable way. Based on customer needs assessment, this study presents a framework to describe the initial phases of a “Smart Service” development process, considering the requirements of Smart Engineering methodologies.

Negotiation Support for Co-design of Business Services

Part 3: Product-Service Systems

Service Productization and Product Servitization in The Contract Manufacturing Company

The role of contract manufacturing and subcontracting has been seen in black and white in product and service point of view. It used to be seen either as a product or a service. In the thesis product-service system, offering combining products and services, was discussed. Theory was created from two perspectives; Service productization via Business Model generation and product servitization via New Service Development process. Target for the case study was to point out new ways of service thinking and ways for changing business environment in contract manufacturing, especially in customer satisfaction and profitability point of view. The case study is following the New Service Development process phases. First ideas were collected from literature and via sales management interviews. Service offering and tool for service requirement evaluation was created. Last financial results of example service scenarios were calculated. It is recommended to take service offering into internal use and further develop it into modular service model. It is also recommended to take created customer service requirement evaluation tool into use for capturing customer service needs but also for communicating those internally.

Customer-driven service product development

This thesis studies customer-driven service product development and how to manage customer involvement in the service product development process. The theory part of this thesis is a literature review of the prior studies and the thesis also includes empirical evidence in the form of a case study about ABB.

Application of user-centered design in the development of an atomated/assisted testing system for self-service devices

Automated Teller Machines (ATMs) are sensitive self-service systems that require important investments in security and testing. ATM certifications are testing processes for machines that integrate software components from different vendors and are performed before their deployment for public use. This project was originated from the need of optimization of the certification process in an ATM manufacturing company. The process identifies compatibility problems between software components through testing. It is composed by a huge number of manual user tasks that makes the process very expensive and error-prone. Moreover, it is not possible to fully automate the process as it requires human intervention for manipulating ATM peripherals. This project presented important challenges for the development team. First, this is a critical process, as all the ATM operations rely on the software under test. Second, the context of use of ATMs applications is vastly different from ordinary software. Third, ATMs’ useful lifetime is beyond 15 years and both new and old models need to be supported. Fourth, the know-how for efficient testing depends on each specialist and it is not explicitly documented. Fifth, the huge number of tests and their importance implies the need for user efficiency and accuracy. All these factors led us conclude that besides the technical challenges, the usability of the intended software solution was critical for the project success. This business context is the motivation of this Master Thesis project. Our proposal focused in the development process applied. By combining user-centered design (UCD) with agile development we ensured both the high priority of usability and the early mitigation of software development risks caused by all the technology constraints. We performed 23 development iterations and finally we were able to provide a working solution on time according to users’ expectations. The evaluation of the project was carried out through usability tests, where 4 real users participated in different tests in the real context of use. The results were positive, according to different metrics: error rate, efficiency, effectiveness, and user satisfaction. We discuss the problems found, the benefits and the lessons learned in the process. Finally, we measured the expected project benefits by comparing the effort required by the current and the new process (once the new software tool is adopted). The savings corresponded to 40% less effort (man-hours) per certification. Future work includes additional evaluation of product usability in a real scenario (with customers) and the measuring of benefits in terms of quality improvement.

PSS as a service based strategy for western manufacturers

A product-service system (PSS) is a subtle blend of products and services that are offered as an integrated solution to customers. Much existing work on PSS has originated from Scandinavia and has been motivated by a sustainability agenda. Although valuable, this form has limited appeal to western manufacturers. However, by expanding the concepts of PSS to also embrace leading thinking on large scale complex service systems and informated products and services, it is possible to put forward the basis of a service business model that offers the means to differentiate from competitors who simply offer lower priced products. This paper aims to build this case. It reports the state-of-the-art of PSS, defines the concept, reports on its origin and features, discusses examples of applications, and finally proposes a research strategy for future work on this topic.

We know what you want to buy:a demographic-based system for product recommendation on microblogs

Product recommender systems are often deployed by e-commerce websites to improve user experience and increase sales. However, recommendation is limited by the product information hosted in those e-commerce sites and is only triggered when users are performing e-commerce activities. In this paper, we develop a novel product recommender system called METIS, a MErchanT Intelligence recommender System, which detects users' purchase intents from their microblogs in near real-time and makes product recommendation based on matching the users' demographic information extracted from their public profiles with product demographics learned from microblogs and online reviews. METIS distinguishes itself from traditional product recommender systems in the following aspects: 1) METIS was developed based on a microblogging service platform. As such, it is not limited by the information available in any specific e-commerce website. In addition, METIS is able to track users' purchase intents in near real-time and make recommendations accordingly. 2) In METIS, product recommendation is framed as a learning to rank problem. Users' characteristics extracted from their public profiles in microblogs and products' demographics learned from both online product reviews and microblogs are fed into learning to rank algorithms for product recommendation. We have evaluated our system in a large dataset crawled from Sina Weibo. The experimental results have verified the feasibility and effectiveness of our system. We have also made a demo version of our system publicly available and have implemented a live system which allows registered users to receive recommendations in real time. © 2014 ACM.

Analytical approximations to predict performance measures of manufacturing systems with job failures and parallel processing

Parallel processing is prevalent in many manufacturing and service systems. Many manufactured products are built and assembled from several components fabricated in parallel lines. An example of this manufacturing system configuration is observed at a manufacturing facility equipped to assemble and test web servers. Characteristics of a typical web server assembly line are: multiple products, job circulation, and paralleling processing. The primary objective of this research was to develop analytical approximations to predict performance measures of manufacturing systems with job failures and parallel processing. The analytical formulations extend previous queueing models used in assembly manufacturing systems in that they can handle serial and different configurations of paralleling processing with multiple product classes, and job circulation due to random part failures. In addition, appropriate correction terms via regression analysis were added to the approximations in order to minimize the gap in the error between the analytical approximation and the simulation models. Markovian and general type manufacturing systems, with multiple product classes, job circulation due to failures, and fork and join systems to model parallel processing were studied. In the Markovian and general case, the approximations without correction terms performed quite well for one and two product problem instances. However, it was observed that the flow time error increased as the number of products and net traffic intensity increased. Therefore, correction terms for single and fork-join stations were developed via regression analysis to deal with more than two products. The numerical comparisons showed that the approximations perform remarkably well when the corrections factors were used in the approximations. In general, the average flow time error was reduced from 38.19% to 5.59% in the Markovian case, and from 26.39% to 7.23% in the general case. All the equations stated in the analytical formulations were implemented as a set of Matlab scripts. By using this set, operations managers of web server assembly lines, manufacturing or other service systems with similar characteristics can estimate different system performance measures, and make judicious decisions - especially setting delivery due dates, capacity planning, and bottleneck mitigation, among others.

Ethics, Value Systems And The Professionalization Of Hoteliers

In the discussion - Ethics, Value Systems And The Professionalization Of Hoteliers by K. Michael Haywood, Associate Professor, School of Hotel and Food Administration, University of Guelph, Haywood initially presents: “Hoteliers and executives in other service industries should realize that the foundation of success in their businesses is based upon personal and corporate value systems and steady commitment to excellence. The author illustrates how ethical issues and manager morality are linked to, and shaped by the values of executives and the organization, and how improved professionalism can only be achieved through the adoption of a value system that rewards contributions rather than the mere attainment of results.” The bottom line of this discussion is, how does the hotel industry reconcile its behavior with that of public perception? “The time has come for hoteliers to examine their own standards of ethics, value systems, and professionalism,” Haywood says. And it is ethics that are at the center of this issue; Haywood holds that component in an estimable position. “Hoteliers must become value-driven,” advises Haywood. “They must be committed to excellence both in actualizing their best potentialities and in excelling in all they do. In other words, the professionalization of the hotelier can be achieved through a high degree of self-control, internalized values, codes of ethics, and related socialization processes,” he expands. “Serious ethical issues exist for hoteliers as well as for many business people and professionals in positions of responsibility,” Haywood alludes in defining some inter-industry problems. “The acceptance of kickbacks and gifts from suppliers, the hiding of income from taxation authorities, the lack of interest in installing and maintaining proper safety and security systems, and the raiding of competitors' staffs are common practices,” he offers, with the reasoning that if these problems can occur within ranks, then there is going to be a negative backlash in the public/client arena as well. Haywood divides the key principles of his thesis statement - ethics, value systems, and professionalism – into specific elements, and then continues to broaden the scope of each element. Promotion, product/service, and pricing are additional key components in Haywood’s discussion, and he addresses each with verve and vitality. Haywood references the four character types - craftsmen, jungle fighters, company men, and gamesmen – via a citation to Michael Maccoby, in the portion of the discussion dedicated to morality and success. Haywood closes with a series of questions derived from Lawrence Miller's American Spirit, Visions of a New Corporate Culture, each question designed to focus, shape, and organize management's attention to the values that Miller sets forth in his piece.