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Abstract
Introduction
Discussion, Conclusions and Os Implications
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Business and Management
Marketing

Service, services and products: rethinking operations strategy

Profile image of Luis AraujoLuis Araujo

2009, International Journal of Operations & Production Management

https://doi.org/10.1108/01443570910953586
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24 pages

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Abstract

PurposeThis paper proposes a new approach to operations and supply strategy in the light of recent developments in the analysis of the respective roles of products and services in delivering benefits to customers.Design/methodology/approachReviews and synthesises concepts from operations management (OM), marketing, economics and related areas. Examples of product and service combinations are considered, drawing attention to the ways in which services may be distinguished from products. An institutional basis for defining services is favoured over IHIP. A corollary of this is how services are made tradable: the modularity theory of the firm is used to do this. The paper then outlines, considers and compares various approaches to the combination of products and services: “service‐dominant logic”, support services, product‐service systems, systems integration, performance‐based logistics, bundling and, finally, the notion of “the offering”.FindingsIt is found that the notion of the bus...

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Smith, L., Maull, R. and Ng, I.C.L (2011), Servitization and Operations Management: A Service-Dominant Logic Approach. International Journal of Operations & Production Management, under review
Irene C L Ng

Purpose – The purpose of this paper is to provide further insight into operations management of the Product-Service (P-S) transition, known as servitization, and the resulting Product Service System (PSS) offerings. In exploring the dynamics of product-service transition this paper adopts a Service-Dominant (S-D) logic view of value creation, using it as a lens through which to explore value propositions of the P-S transition and their operations design. Design/methodology/approach - This paper presents an in-depth case study of an Original Equipment Manufacturer (OEM) of durable capital equipment who, over the last five years, has expanded their offerings to include use and result orientated product-service systems. The research design uses a multi-method approach; employing 28 in-depth qualitative interviews with customers and employees and analysis of texts, documents and secondary data including five years of Enterprise Resource Planning (ERP), call centre and contract data. Findings – The paper identifies 10 generic P-S attributes, which are abstracted into four nested value propositions; asset value proposition; recovery value proposition; availability value proposition; outcome value proposition. In examining the operations design for delivery of these value propositions it is found that the role and importance of contextual variety increases as the organisation moves through the value propositions. Interdependencies amongst the value propositions and differences in operational design for each value proposition are also found. Research limitations/implications - The paper investigates PSS through an S-D logic mindset. First, the paper considers value propositions of PSS not according to ‘product’ or ‘service’ but in terms of how resources (both material and human) are optimally designed to co-create customer value. Second, a value co-creation system of nested value propositions is illustrated. In so doing the findings have a number of implications for literature on both PSS and S-D Logic. In addition, the research adds to the PSS literature through the identification and consideration of the concept of contextual use variety. Practical implications – The paper demonstrates the complexity of the transition from product to service. Specifically, service cannot be seen as a bolt-on extra to their product offering, complexity caused by interactions and changes to the core offering require a systems perspective and consideration of both firm and customer skills and resources. Originality/value – This paper extends existing literature on the P-S transition and its implications for operations management. Notably, it takes an S-D logic perspective of value creation and in so doing highlights the importance and role of contextual use variety in the P-S transition. It also provides further empirical evidence that the P-S transition cannot be treated as discrete stages but is evolutionary and requires a complex systems perspective.

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Smith LA, Maull RS & Ng ICL (2012) Servitization and Operations Management: A Service-Dominant Logic Approach. Accepted for publication in International Journal of Operations and Production Management, Interim location: WMG Service Systems Research Group Working Paper Series, paper number 10/12, ISSN 2049-4297
Irene C L Ng

. Structured Abstract: Purpose The purpose of this paper is to provide further insight into operations management of the Product-Service (P-S) transition, known as servitization, and the resulting Product Service System (PSS) offerings. In exploring the product-service transition, this paper adopts a Service-Dominant (S-D) logic view of value creation, using it as a lens through which to explore value propositions of the P-S transition and their operations design. Design/methodology/approach This paper presents an in-depth case study of an Original Equipment Manufacturer (OEM) of durable capital equipment who, over the last five years, has expanded its offerings to include use- and result-orientated product-service systems. The research design uses a multi-method approach; employing 28 in-depth qualitative interviews with customers and employees and analysis of texts, documents and secondary data including five years of Enterprise Resource Planning (ERP), call centre and contract data. Findings The paper identifies 10 generic P-S attributes which are abstracted into four nested value propositions: asset value proposition; recovery value proposition; availability value proposition; and outcome value proposition. In examining the operations design for delivery of these value propositions, it is found that the role and importance of contextual variety increases as the organisation moves through the value propositions. Interdependencies amongst the value propositions and differences in operational design for each value proposition are also found. Research limitations/implications The paper investigates PSS through a S-D logic mindset. First, the paper considers value propositions of PSS not according to ‘product’ or ‘service’ but in terms of how resources (both material and human) are optimally designed to co-create customer value. Second, a value co-creation system of nested value propositions is illustrated. In so doing the findings have a number of implications for literature on both PSS and S-D logic. In addition, the research adds to the PSS literature through the identification and consideration of the concept of contextual use variety. Practical implications The paper demonstrates the complexity of the transition from product to service. Specifically, service cannot be seen as a bolt-on extra to their product offering; complexity caused by interactions and changes to the core offering require a systems perspective and consideration of both firm and customer skills and resources. Originality/value This paper extends existing literature on the P-S transition and its implications for operations management. Notably, it takes an S-D logic perspective of value creation and in so doing highlights the importance and role of contextual use variety in the P-S transition. It also provides further empirical evidence that the P-S transition cannot be treated as discrete stages but is evolutionary and requires a complex systems perspective.

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Servitization and Operations Management: A Service-Dominant Logic Approach
roger maull

2011

Purpose -The purpose of this paper is to provide further insight into operations management of the Product-Service (P-S) transition, known as servitization, and the resulting Product Service System (PSS) offerings. In exploring the dynamics of product-service transition this paper adopts a Service-Dominant (S-D) logic view of value creation, using it as a lens through which to explore value propositions of the P-S transition and their operations design.

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Product Service Systems: Exploring Service Operations Strategies
Marc Lambrecht

SSRN Electronic Journal, 2000

Purpose -The purpose of this paper is to shed light on the operational principles that can be applied when offering integrated solutions of both products and services, i.e. product-service systems (PSS). Manufacturing companies that start pursuing a service oriented strategy face many new challenges. We investigate which well-known operational principles can be of merit to these companies and how these principles can be put to action. Design/methodology/approach -The paper reports on the main findings of a structured return on invested capital (ROIC) analysis. We cascaded the ROIC metric into a limited set of core operational drivers. We then identified operational practices which could be applied to improve the ROIC by influencing the operational drivers. The operational practices were distillated from a close collaboration with a manufacturing company that pursues a product-service strategy. Findings -Five generic strategic guidelines are formulated and translated into a wide range of operational practices.

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Related topics

  • Marketing
  • Computer Science
  • Economics
  • Operations Strategy
  • Product Service System
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