Servitized manufacture: Practical challenges of delivering integrated products and services

Abstract

Servitization is now widely recognized 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 seeking to understand the wider implications of service-led competitive strategies in manufacturing. However, yet to be explored are the detailed practices and processes needed to deliver integrated products and services. Therefore, the purposes of the present paper are to illustrate the form of a real-life servitization process model, and to summarize the key challenges that a typical manufacturer experiences in supporting such a model. The work is based on an in-depth case study with a leading provider of industrial products and related services. The paper presents this study, an illustration of its servitized process model, and the implications that supporting this model has on the wider manufacturing enterprise.

Keywords

manufacturing products service servitization model casestudy

References

Baines

Lightfoot

Evans

Neely

Greenough

Peppard

Roy

, ‘State-of-the-art in product-service systems’ Proc. IMechE Part B: J. Engineering Manufacture 221(B10) (2007): 1543–1552 DOI: 10.1243/09544054JEM858.

Aurich

Fuchs

, ‘Advances in lifecycle engineering for sustainable manufacturing businesses’ In Proceedings of the 14th CIRP Conference on Life Cycle Engineering, Tokyo, Japan, 11–13 June (2007).

Wise

Baumgartner

, ‘Go downstream: The new profit imperative in manufacturing’ Harvard Business Rev. 77 (5) (1999): 133–141.

Oliva

Kallenberg

, ‘Managing the transition from products to services’ Int. J. Serv. Ind. Manag. 14 (2) (2003): 160–172.

Slack

, ‘Operations strategy: Will it ever realise its potential?’ Gestao & Producao 12 (3) (2005): 323–332.

Chesborough

Spohrer

, ‘A research manifesto for services science’ Commun. ACM 49 (7) (2006): 35–40.

Department for Trade and Industry . The Government's Manufacturing Strategy (London, UK: HMSO 2002).

Neely

, ‘Servitization of manufacturing’ In Proceedings of the 14th EurOMA Conference, Ankara, Turkey, 17–20 June (2007).

Chase

Garvin

, ‘The service factory’ Harvard Business Revi. 67 (4) (1989): 61–69.

10.

Vandermerwe

Rada

, ‘Servitization of business: Adding value by adding services’ Eur. Manag. J. 6 (4) (1988): 314–332.

11.

Goedkoop

van Haler

te Riele

, ‘Product service-systems, ecological and economic basics’ Report for Dutch Ministries of Environment (VROM) and Economic Affairs (EZ) 36 (1999):.

12.

Alonso-Rasgado

Thompson

Elfstrom

, ‘The design of functional (total care) products’ J. Engng. Design 15 (6) (2004): 515–540.

13.

Yin

R. K.

, Case study research: Design and methods (London, UK: Sage Publications 2003).

14.

Miles

M. B.

Huberman

A. M.

, Qualitative data analysis (Thousand Oaks, California, USA: Sage Publications 1994).

15.

Benedettini

Baines

T. S.

Lightfoot

H. W.

Greenough

R. M.

, ‘State-of-the-art in integrated vehicle health management’ Proc. IMechE, Part G: J. Aerospace Engineering 223(G2) (2009): 157–170 DOI: 10.1243/09544100JAERO446.

16.

Mathieu

, ‘Service strategies within the manufacturing sector: Benefits, costs and partnerships’ Int. J. Serv. Ind. Manag. 12 (5) (2001): 451–475.

17.

Thompson

J. D.

, Organizations in action (New York: McGraw-Hill 1967).

18.

Verstrepen

, ‘Servitization in the automotive sector: Creating value and competitive advantage through service after sales’ In Global production management (Dordredrt, The Netherlands: Kluwer Publishers 1999): pp. 538–545.

19.

Levitt

, ‘Marketing intangible products and product intangibles’ Harvard Business Revi. 59(May/June) (1981): 92–104.