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PhD defence
Service-oriented product development strategies
Adrian R. Tan
Technical University of Denmark
4th June 2010

                                                         Actor network

                                     Business
                                      strategy


                                  Business planning
                Development
                                 Development projects                              Customer
                        PSS                                                        activities
                                   Product development
                       concept     Service development

                Operations

                                  Production                  Installation   Use   Maintenance

                              Service delivery                                      Product life cycle
Product/service-system (PSS) approaches
Innovation strategies:
• From business based on the value of the exchange of product
  ownership and responsibility,




      TRADITIONAL MANUFACTURING APPROACH

                                          PRODUCT
                                          SALE
                 PRODUCTION

                    DESIGN

                  MARKETING
                                             $
         Integrated Product Development
                                          Business!




                                                                2
Product/service-system (PSS) approaches
Innovation strategies:
• From business based on the value of the exchange of product
  ownership and responsibility,
• To business based on the value of supporting and enhancing the
  utility of products throughout their entire life cycle.

      PSS APPROACH



                                                       INSTALLATION
                PRODUCTION

                     DESIGN
                                                          USE
                MARKETING
                                           $                    DISPOSAL
                              Business!
                                               $
                               Business!

                                  Business!        $
                                                                           3
Towards sustainable consumption and production

• Business: better profits, on-going customer relations, competiveness
• Customers: providing performance, utility and satisfaction directly
• Sustainability: opportunity for greater efficiency and sufficiency


      PSS APPROACH



                                                       INSTALLATION
                PRODUCTION

                     DESIGN
                                                          USE
                MARKETING
                                           $                    DISPOSAL
                              Business!
                                               $
                               Business!

                                  Business!        $
                                                                           4
An example:
From photocopying machines to document services

                           Monitoring     Maintenance
                       Training                    Repair
                     Consulting                     Upgrade




                                        Delivery


                                                    Spare
                           Toner
                                         Paper      parts

                                                              5
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   6
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   7
New business opportunities for industry

• Services and integrated solutions have always existed
   • Only recently there has been an interest in a systematic
     approach to developing integrated products and
     services
• Services are becoming more important – also for
  manufacturing firms
   • Greater share of revenue
   • Greater profits
• Business potential for companies by expanding features,
  value and benefits not apparent with traditional product-
  oriented offerings
• Better fulfilment of customer needs
• Possibility for improved sustainability due to
  dematerialisation and optimised use                           8
Research is lacking in PSS design

• Plenty of PSS design methods
   …but these have not be verified

• While many manufacturers are developing integrated
  solutions,
  … research on product/service development in a
  (manufacturing) company context is lacking and often
  many no not succeed


• The synthesis and design-oriented aspects of PSS are not
  based on existing theories in design research
   • Engineering Design perspective on PSS is limited


                                                             9
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   10
Research objectives
Aim:
   to provide industry with a better understanding of how
   products and services may be designed and developed
   in a manner that is both competitive and sustainable in
   economic, social and environmental terms.

Objectives:
1. to establish a theoretical foundation for the
   systematic and methodological approach to PSS
   design;
2. to propose service-oriented development strategies,
   methods and techniques for manufacturing firms that
   wish to adopt PSS approaches.
                                                         11
Research questions

Q1. Compared to traditional product development, how
    can PSS be understood?


Q2. How may PSS be conceptualised?


Q3. How may PSS be developed in manufacturing
    firms?




                                                       12
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   13
Value proposition




                    DESIGN OBJECT




                                    14
Value creation




       DESIGN PROCESS


          PRODUCTION

            DESIGN

          MARKETING




                        15
Business strategy



      STRATEGIC      Business
     MANAGEMENT      strategy


                  Business planning




         PRODUCTION

           DESIGN

          MARKETING




                                      16
Three perspectives in design research



                   Business
                   strategy


                Business planning




          PRODUCTION

            DESIGN

          MARKETING




                                        17
Three perspectives in design research



      STRATEGIC      Business
     MANAGEMENT      strategy


                  Business planning

        DESIGN PROCESS
                                      DESIGN OBJECT
          PRODUCTION

            DESIGN

          MARKETING




                                                      18
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   19
Research methodology
Research object:
  the design and development activities in a strategic
  business unit of a manufacturing company that lead to
  the employment of PSS approaches.

Approach:
• Interplay between
                                                 [Andreasen 2008]
  theoretical and empirical
  insights
• Exploratory, qualitative and
  engaging with practitioners
  and scholars
                                                            20
Research methodology
Research strategy:
• Theory: literature & academic discussions
• Empirical: five case studies
       RESEARCH QUESTIONS              RESEARCH ANALYSIS


     Q1. Compared to traditional    Literature review
     product development, how can
     PSS be understood?
                                    Case A. PSS design course


                                    Case B. Steelcase
     Q2. How may PSS be
     conceptualised?
                                    Case C. Vitsœ


     Q3. How may PSS be             Case D. RiverSimple
     developed in manufacturing
     firms?                         Case E. SCA Hygiene Products
                                                                   21
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   22
Literature review
                                                                  SUSTAINABILITY & ECO-DESIGN
   Sustainability-oriented
                                          Service Society

                                Service                                  Extended
                               Economy                                   Producer
                                                    Servicizing        Responsibility       Product Life               Closed
                                                                                             Thinking                  Product
                  Functional
                                              Service                                                                   Loops
                  Economy
                                            Engineering
                                                                                                    Product Life
                                                                                                       Cycle
                                  Eco-Efficient                                                     Management
                                    Services                                                           (PLM)



                                                            PSS
                                                                                                                         Product-oriented
                           Functional
                             Sales
                                                                                                      Engineering
                                                                                                     Design/ Product
                               Functional                                                             Development
                                Products

                                              Solution
              Extended                        Oriented                                   Business              Portfolio
             Enterprises                    Partnerships                                Development           management


                            Value                    Relationship        Service Design/             Strategy
 Actor-oriented            Networks                   Marketing           Development/                                      INNOVATION
                                                                                                  Development &
                                                                           Marketing               Formulation
                                                                                                                           Service
SUPPLY CHAIN MANAGEMENT                                                           Servitization                            Science
                                                                                                       Integrated
                                                      Service-oriented                                  Solutions

                                                                                                                                      23
Literature review
• Design object perspective:
   • Products, services and PSS are alternative value
     propositions that all aim to fulfil a need
   • Focus on activities instead of products
   • Service content and service channel
• Design process perspective:
   • The product is supported and enhanced throughout
     customer’s activities
   • With PSS customers play a more active role in value
     creation
• Strategic management perspective:
   • PSS involves a strategic shift in business orientation
   • Transition process from product-oriented to service-
      oriented                                                24
Reconciliation of product and customer
perspectives
Two life cycle chains

     PRODUCT LIFE CYCLE




                                                                        INSTALLATION




                                                                                                MAINTENANCE
                        PRODUCTION
           EXTRACTION




                                                   TRANSPORT
                                     ASSEMBLY




                                                                                                              DISPOSAL
                                                                SALE




                                                                                       USE
                                                     PRE                                                                 POST
                                                                                   SUPPORTING
                                                                                   CUSTOMER’S
                                                                                   ACTIVITIES
                                                CUSTOMER
                                                ACTIVITY
                                                  CYCLE

                                                               after Olesen [1992] and Vandermerwe [2000]
                                                                    [Tan, McAloone & Andreasen 2006]                            25
Strategies for the design of services


PRODUCT-ORIENTED                                                 CUSTOMER-ORIENTED


                                                                 Customer      Business
                 Product use             Product life            activity      supporting
      Product    services                services                services      services
                                         •Supplies
                 •Maintenance                                    •Training     •Consulting
                                         •Installation
                 •Repair                                         •Planning     •Financing
                                         •Auxiliary input
                 •Spare parts                                    •Designing    •Managing
                                         •Upgrade
                 •Warranty                                       •Specifying   •Partnering
                                         •Disposal
Engineering Design                                               •Operating    •Outsourcing
                                                                 •Measuring
            Design for Serviceability
                     Design for Supportability
                                                 Design for Service
                                                                Service Design

                                [Tan, Matzen, McAloone & Evans, 2009]                         26
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   27
Five case studies
 Case study   Organisation       Size         Type of       Core       Main method for     Duration of
                                             business      offering       gathering          study
                                                                         information
A              University     Approx. 45    Education     Engineers   Action research     2 x 13 weeks
                              students in                 (B.Sc. &    using PSS design    (Sep – Jan
PSS Design                                                                                2006/ 2007 &
                              the course                  M.Sc.)      methodology in a
Course                                                                                    2007/2008)
                               each year                              course setting



B             Manufacturer    Large         Mainly        Office      Participant         15 months
                              (< 500        business-     furniture   observer in a       (Oct 2006 – Dec
Steelcase                                                                                 2007)
                              employees)    to-business               development
                                                                      project
C             Manufacturer/   Small         Mainly        Shelving    Action research     3 months
               Design firm    (> 50         business-     systems     using PSS design    (May – Jul 2008)
Vitsœ
                              employees)    to-                       methodology in
                                            consumer                  workshop meetings
D              Technology     Small         Mainly        Hydrogen    Action research     2 months
              entrepreneur    (> 50         business-     car         using PSS design    (June – Jul 2008)
RiverSimple
                              employees)    to-                       methodology in
                                            consumer                  workshop meeting
E             Manufacturer    Large         Mainly        Inconti-    Interviews and      3 months
                              (< 500        business-     nence       workshops           (Nov 2008 – Jan
SCA                                                                                       2009)
                              employees)    to-           products
Hygiene
                                            government
Products
                                                                                                             28
Case study A: PSS Design Course
Description:
  Action research using PSS design methodology in a
  university course setting.




  Based on a reference product (e.g. dishwasher, printer,
  shower, etc.) students had to design a PSS with the same
  utility but with considerable less environmental impacts
                                                             29
Case study A: PSS Design Course
    Product life Gallery [McAloone 2007]

  Product
life cycle                                           Value




 Product
description                                          Trade offs


Activity
 cycles                                            Environmental
                                                      analysis

  Actor
 network
                                                      Meetings
                                                     (product, life
                       )                             phase system
                                                       and actor)

                                           [Student project 2006]


                                                                30
Case study A: PSS Design Course
Customer Activity Cycle [Vandermerwe 2000]




                                        [Student project 2006]
                                                                 31
Case study A: PSS Design Course
Actor Network [Latour 1991, Donaldson et al. 2006]


                              Wittenborg
                                                              Coffee beans



                                        Coffee supplier




                         Company/customer
                                                            User
                                           Coffee contact
                                Key
                                      Money-flow            Service
                                      Communication         Products/materials

                                                          [Student project 2004]

                                                                                   32
Case study A: PSS Design Course

Insights:
• Life cycle thinking approaches were effective to
  understand activities and behaviour
• Three perspectives are used: product, life phase
  system and actor




                                                     33
Case study B: Steelcase
Description:
  Participant observer in a service-oriented development
  project


                                  Measure     Explore




                              Manage               Plan


                                        Provide

                                                           34
Case study B: Steelcase
From office furniture to sustainable workplace performance




                                                        35
Case study B: Steelcase
From office furniture to sustainable workplace performance

                          Employee satisfaction

     people                                   Turnover
                         Workspace satisfaction
                                                                        RESULTS
                  Maintenance                      Operating costs

                                                                        Economic
    process                               Energy costs
                         Indoor climate

                                                   Sick days
                                                                          Social
      tools/     Energy consumption
   technology
                                             Employee health
                                                                         Environ-
                                                                          mental
     space             Ergonomics
                                      Greenhouse gas emissions



                                                                 [Tan & Bey 2008]   36
Case study B: Steelcase
Insights:
• Balance between product-orientation and service-
  orientation
• Alignment of product and service strategies based on
  user-centred design and eco-design


                           CONSULTING


                            REDEFINE


                             REFINE



                              AS IS

                                                         37
Case study C: Vitsœ
Description:
   Action research using
   PSS design methodology
   in workshop meetings

• Products are configurable
  systems designed by Dieter
  Rams
• Designed with longevity in                       [www.vitsoe.com]

  mind and backwards
  compatible to be easily
  extended, rearranged and     “‘help people live better with
  moved                             less that lasts longer. ”
• Strong service culture
                                                                 38
Case study C: Vitsœ

Customer Activity Cycle                     Actor Network




                    [Gonzalez & Tan 2008]                   39
Case study C: Vitsœ
Insights:
• Sale of products with a strong service-orientation
• Design and life cycle thinking applied throughout the
  business




                                                          40
Case study D: RiverSimple
Description:
  Action research using PSS design methodology in
  workshop meetings

                          • Entrepreneurial technology
                            company
                          • Hyrban, a lightweight
                            hydrogen city car
                          • Sale of service model with
                            use, fuel and maintenance
                            included
                          • Distributed manufacturing
                          • Open source collaborative
                            design
                                                         41
Case study D: RiverSimple
                Product concept                     Manufacturing concept

                      Lighter                          Low tooling costs
                    composite                           Low minimum
                     materials                           efficient scale
          Less demand
            for power
                                                                            Business strategy
                      Smaller                            Distributed
                     fuel cells                         manufacturing
                                                                                  Multi-
          Less demand
                                                                               stakeholder
            for power
                                                         Open source           governance
                     Electric                              design
                     motors           Releases
Stores energy                        energy when
when braking                         accelerating
                      Ultra-                            Limited liability    Sale of service
                    capacitors                           partnerships            model
                                                                                                                Lower
                                                                                                              costs per
                                   More energy                                                               driven mile
                                    efficient
                                                                                Include
                                     Higher                                   maintenance
                                    unit cost                                  and fuel

                                   Quick, clean
                                    servicing

                                  Longer service            Recover                             Long term
                                    intervals            costs through                           customer
                                                           longer life                         commitments
                                                         and recycling


                                                    [after Hugo Spowers]                                                   42
Case study D: RiverSimple
Insights:
• Product is designed as a service from the start
• Development of product, supporting system and
  orchestration of actors
• Product characteristics linked to development,
  manufacturing and distribution strategies to support
  business strategy




                                                         43
Case study E: SCA Hygiene Products
Description:
  Interviews and workshops with company and
  customer representatives

                          • Incontinence care to health
                            care institutions
                          • User-focus and customer-
                            focus
                          • Sales based on total costs
                            not product costs
                          • Global product development
                          • Global and local service
                            development
                                                          44
Case study E: SCA Hygiene Products




                                     45
Case study E: SCA Hygiene Products
                                                                                                                                    Lyngby-Taarbæk
                                                                                                                                        kommune
                                                                                              penge
                                                                                                                                                                Politikere
                                                                                                            Økonomi
                                                                                årsrappo                                                       Socialdirektør
                                                                                         rter og b
                                                                                                  esparelse
                                                                                    kontr                   r
                                                                                         akt
                  Kommunikation                                                                                                      Ældrechef
                                                                Key Account
                                                                  Manager
                        om nye
                     produkter




                                                                                            g         Indkøber             Driftsleder
                                                                                          in
                                                                                        gn
                                                                                     l æ Udviklings
                                                                                   an
                  information




                                                                                pl         -konsulent            g
                                                                           ls es                            ivnin
                                   serviceid
                                   serviceidéer




                                                                        ne                              rådg
                                                                       n                           r og
                                                                     da                       orte                                           Læge
                                                                  ud                      rapp
                                                                                    rugs
                                                                            forb
                                                                                                         erfaringer og viden                 udreder
                                                                                                      støtte netværk
                                                                        opfølgning
                                                                       og rådgivningKontinens-                                 Kontakt-
                                                  Distriktschef                   sygeplejerske                                 person
                                                                                          undervisning
                                                                                                                       pleje
                                                                                                                                                Pårørende

                                Service-                            bevilling
   produktidéer




                                                                                                      Plejepersonale
                                udvikling                                                                                         Borger
                                                      forbrugs-
                                                      rapporter
                                                                                   bestilling
                                                                                                                            bleer
                                                                                                                                                Legend:
                                                                                   ordr                                                                         Product
                                                              Kundecenter                 e
                                                    forecasting                                              Depot
                                                                                                                                                                Service
                                                                       bleer                                   bleer                                            Information
  Produkt-                                                                                                                                                      Money and
  udvikling                                                                                                                                                     contracts
                                                       Fabrik                                  Lagerhotel                      Distributør
                                                                                                                                                                              46
                                                                                                                                               [Tan & McAloone 2009]
Case study E: SCA Hygiene Products
Insights:
• Actor network used as a communicative tool
• Several value propositions offered at multiple levels
• Changing the focus from product to service based on
  the use of products
• Interaction between product development and service
  development




                                                          47
Summary of case studies

• Case A: PSS Design Course
   • Application and refinement of PSS conceptualisation
     methodology and tools
• Case B: Steelcase
   • Understanding of a manufacturing organisation’s context
     for service-oriented product development
• Case C: Vitsœ and Case D: RiverSimple
   • Industry application and evaluation of PSS
     conceptualisation methodology and tools
• Case E: SCA Hygiene Products
   • Describing design and development activities in a
     service-oriented manufacturing firm

                                                               48
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   49
New perspectives in PSS design

•   Customers and their activities are a source
    of valuable resources during the
                                                    CUSTOMER
    development of new products and services.

•   Manufacturers that take upon the
    responsibility of the physical products
    throughout their life phases have to define
    new roles and responsibilities on the market.

•   PSS approaches require a different set of
    knowledge and competencies that can be
    aimed directly at the customer’s activities.

•   The orchestration of a new value network
    collaborating with new business partners
    and reaching different target groups.
                                                               50
Result 1: PSS conceptualisation
 Expanding with three essential perspectives
               Traditional Engineering Design perspective

                              TS   Hu   Inf   M&G       AEnv




                                               I love
                                               Boris!

                                               Adrian




                  +                                            +
Customer activities                     +                          Actor network

                       Product life phase systems




                                                                                   51
Result 1: PSS conceptualisation
                       Analysis & Diagnosis




                                                Focus & Goal setting
                                                Focus & Goal setting
                            Value
                         Proposition
    Evaluation




                             PSS
                 Customer          Product
                  Activity         Life Phase
                     Cycle         System
                              Actor
                             Network




                    Conceptualisation
                                                                       52
Result 2: PSS development framework




 Operations                               Delivery of products
                                          and services

                     Partner operations
                   Company operations

                    Customer activities
                                                                 53
Result 2: PSS development framework




                Product life cycle and customer activity
                      knowledge management
 Operations                                                Delivery of products
                                                           and services

                           Partner operations
                        Company operations

                         Customer activities
                                                                                  54
Result 2: PSS development framework




                                                                                                          Product and service
 Development                                                                              Partner         development projects
                                                                                      Company
               Business oriented tasks
                                                                    Partner
           Pre-business oriented tasks       Product                                        Product
                                             development            Company
                                                                                            development
       Cross-disciplinary tasks
                                                                   Customer
    Support tasks                        Company

  Renewal and maintenance tasks          Customer



                                               Product life cycle and customer activity
                                                     knowledge management
 Operations                                                                                               Delivery of products
                                                                                                          and services

                                                            Partner operations
                                                       Company operations

                                                           Customer activities
                                                                                                                                 55
Result 2: PSS development framework


Portfolio Strategy

                                                              Business/                               PSS conceptualisation
                                                           Product planning

                                                                                                          Product and service
 Development                                                                              Partner         development projects
                                                                                      Company
               Business oriented tasks
                                                                     Partner
           Pre-business oriented tasks       Product                                        Product
                                             development            Company
                                                                                            development
       Cross-disciplinary tasks
                                                                    Customer
    Support tasks                        Company

  Renewal and maintenance tasks          Customer



                                               Product life cycle and customer activity
                                                     knowledge management
 Operations                                                                                               Delivery of products
                                                                                                          and services

                                                            Partner operations
                                                       Company operations

                                                           Customer activities
                                                                                                                                 56
Result 2: PSS development framework
 Business Strategy
                                                                                     Actor network




Portfolio Strategy

                                                              Business/                               PSS conceptualisation
                                                           Product planning

                                                                                                          Product and service
 Development                                                                              Partner         development projects
                                                                                      Company
               Business oriented tasks
                                                                     Partner
           Pre-business oriented tasks       Product                                        Product
                                             development            Company
                                                                                            development
       Cross-disciplinary tasks                                     Customer

    Support tasks                        Company
                                         Customer
  Renewal and maintenance tasks



                                               Product life cycle and customer activity
                                                     knowledge management
 Operations                                                                                               Delivery of products
                                                                                                          and services

                                                            Partner operations
                                                       Company operations

                                                           Customer activities
                                                                                                                                 57
Result 2: PSS development framework


                                           Actor network

                       Business
                        strategy


                    Business planning
  Development
                   Development projects                              Customer
          PSS        Product development
                                                                     activities
         concept     Service development

  Operations

                    Production                  Installation   Use   Maintenance

                Service delivery                                      Product life cycle




                                                                                      58
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   59
Discussion 1/2

• Understanding PSS design
   • Theoretical foundation built on existing design research
   • PSS design perspectives could also be appropriate in
     traditional product development
• PSS conceptualisation
   • The expansion of design dimensions: product life phase
     systems, customer activities and the actor network
     seem to be comprehensive and complete
   • The supporting tools can be easily used to generate and
     communicate PSS concepts
   • Appropriate for systematic generation of service-
     oriented concepts that lead to competitive and more
     sustainable solutions
                                                                60
Discussion 2/2

• PSS development activities
   • A first mapping of design-related activities relevant for
     PSS
   • Only descriptive, does not say how the change to PSS
     should be organised
   • Framework has not been validated




                                                                 61
Key contributions

• Framing of the synthesis and design-oriented aspects of
  PSS using Engineering Design and Product Development.
• Expansion of the design object beyond physical products to
  also include service design.
• Identification of the fundamental perspectives of PSS design
  concepts: product life phase systems, customer activities
  and actor network.
• A set of visual design tools that allow each of the
  fundamental perspectives of PSS design concepts to be
  easily modelled.
• The mapping of design and development activities
  associated with PSS approaches in manufacturing
  organisations based on empirical case studies.
                                                               62
Service-oriented product development strategies

Contents
 1.   Introduction to PSS design and development
 2.   Research aims, objective and questions
 3.   Three perspectives to design
 4.   Research methodology
 5.   Theoretical basis
 6.   Five empirical case studies
 7.   Results
 8.   Discussion
 9.   Conclusion
                                                   63
Conclusion

• PSS is different from traditional product development,
  but many existing theories can be applied
• The shift towards PSS approaches for manufacturing
  firms is not trivial
• The methodology for PSS conceptualisation is directly
  applicable in manufacturing firms
• Early proposal for understanding and structuring
  design and development activities related to PSS in
  manufacturing companies



                                                           64
Questions?
Theory of Technical Systems
OPERATORS:
                                     I love
                                     Boris!

                                     Adrian




                                Information/ Management
              Technical Human    knowledge      & goal   Active
              Systems Operators    system      system  Environment


OPERANDS:       TS         Hu        Inf      M&G         AEnv
  INPUT                                                               OUTPUT

 material                                                             material

information                                                          information
                                                 I love
                                                 Boris!


  energy                                         A xox
                                                                       energy

  other                                                                other

                     TRANSFORMATION PROCESS

                                                                                   66
PSS development is different to traditional
product development
•   the focus on activities instead of products as the mediator of value – the
    development and providing activities within a company should be aligned
    with their customers’ activities.
•   the involvement of the customer and other partners in the design process.
•   the redistribution of role and responsibility as the company takes greater
    responsibility of its products and also customer activities.
•   the expansion of competencies required to offer and deliver PSS
    solutions – how should the partnerships with external companies be
    integrated.
•   the integration of products and services – the development of the total
    range of products and services that are offered should be coordinated.
•   the need for a structured, systematic and formalised approach to
    capturing, storing and analysing data about the product’s use.
•   the closer strategic relations between the actors in a PSS and how all the
    development activities are integrated and coordinated.
                                                                                 67
A PSS as a design process is a set of
coordinated development activities at
strategic, tactical and operational levels of
the providing company (or companies)
including the customer activities.


•   The model for PSS development shows development activities occur
    during operations (based on a service platform), in the development
    projects of products and services, during the product and service
    development process, business/product planning and strategy
    formulation.
•   The characteristics of services involve the customer in the co-creation of
    value – the role of marketing, production and design in manufacturing
    firms should be prepared for increased user-orientation activities during
    the development process.


                                                                                 68
PSS approaches as an integrated business
strategies are a set of strategies (i.e.
business strategy, product strategy, service
strategy) coordinated internally in an
organisation but also externally with
customers, suppliers and other partners.

•   The expansion of competencies required to offer and deliver PSS
    solutions – how should the partnerships with external companies be
    integrated.
•   The development and providing activities within a company should be
    aligned with their customers’ activities.
•   The integration of products and services – the development of the total
    range of products and services that are offered should be coordinated.




                                                                              69
Can the value of      Does the potential       Can the value of
                   the actors’      utility of the product    the product’s life
                  activities be       match the utility         be increased
               increased and/or     derived from actors’     and/or made more
                  made more                activities?       resource efficient?
              resource efficient?



             Actor                                                 Product
             Activity                                           Life Phase
             Chains                                               Systems


                                       Value
      Are there any                 proposition                         Are there any
     opportunities for                                                 opportunities for
     actors along the                                                  actors along the
      actors’ activity                                                   product’s life
          chain?                                                            chain?

                                                               Are the perceived
                                                                benefits greater
                                                               than the sacrifices
                                                                 for all actors?


                                        Actor
                                       Network

How the four dimensions of PSS concepts should be integrated and coherent
How the three dimensions of PSS concepts should be
                 integrated and coherent
                                        VALUE RELATIONSHIPS
                                                 Actor
                      Value relations           Network
                      between actors
                                                                         How are the actors
                                                                         related throughout
                                                                          the product’s life
         How are the actors
        related through their
              activities?


                                                                                          Value delivery

  Value created
                                                Value
through activities                           proposition

                     Actor                                             Product
                     Activity                                       Life Phase
                     Chains                                           Systems



                                          ACTIVITIES
                                             How well is the
                                             product and product
                                               life suited to the
                                                 activities they
                                               become part of?
How case studies contributed to framework

   Business Strategy                                                  Actor network




   Portfolio Management                                                                     Case study B:
                                               Business/
                                                                                            Steelcase
                                            Product planning


                                                                           Partner
   Development Projects                                                Company

                                                      Partner
                              Product                                        Product
                              development            Company
                                                                             development
                                                     Customer
                          Company
                          Customer
                                                                                           Case study C: Vitsœ
                                Product life cycle and customer activity
                                                                                           and Case study D:
   Knowledge Management               knowledge management                                 RiverSimple

   Operations
                                            Partner operations
    Case study E: SCA                   Company operations
    Hygiene Products
                                        Customer activities



                                                                                                                 72
Morphology of service-oriented strategies
STRATEGIC                                                                VARIATIONS OF CHARACTERISTICS
CHARACTERISTICS

                 Resource                 Minimise          Minimise use of         Increase           Prolong          Close material                ...
                 efficiency            consumption of           product             utility of         product               loop
                 strategy                 product                                    product            utility

                 Responsibility or    Installation       Use          Maintenance         Repair       Upgrade         Reclaim        Disposal                ...
                 management of
                 product life

                 Support or          Design    Operation       Finance     Training       Support      Monitoring      Optimisation      Consulting             ...
                 management of
                 customer activity
PSS DIMENSIONS
PSS DIMENSIONS
PSS DIMENSIONS
PSS DIMENSIONS




                 Partner or             Suppliers         Distributors      Customers        Customer’s       Customer’s                        ...
                 collaborate with                                                             suppliers        customers
                 actor                                                                                        (end-users)

                 Availability of       Always available for the            Available at the customer         Available at certain times                 ...
                 offering                     customer                     when needed (serial use)                  or places


                 Degree of             Core benefit alone             Multiple benefits            Multiple benefits                      ...
                 integration                                            aggregated                    integrated


                 Revenue              Transfer of       Value based      Value based        Value of the            Value of        Value of the                ...
                 mechanism             ownership         on per use        on unit         management of             taking        result of use
                                                                          consumed            activities          responsibility   (performance
                                                                                            (outsourcing)          of the use          based)



                                                                                                                                                                73
Suggestions for future work

• An Engineering Design approach to service design. The
  systematic and methodological approach to design that is
  well established in Engineering Design research has yet to
  embrace the design of services.
• Collaboration with customers and users in PSS
  development. Customers and users represent valuable
  resources that can be actively employed in the development
  and delivery of PSS
• Capturing and managing knowledge in PSS development.
• Verification of PSS design methods and development
  processes in manufacturing firms.
• Management of customer consumption. Efficiency and
  sufficiency.
                                                               74
Perspectives
•   Systematic design approaches well established for products in
    manufacturing firms
•   Systematic design approaches exist for services, although not
    well adopted or coordinated with product development in
    manufacturing firms
•   PSS design should build upon existing methods and
    competencies in manufacturing companies
•   PSS as a design object
    • Conceptual elements of PSS
       • Product life
       • Customer activity
       • Actor Network
•   PSS as integrated strategies
    • Coordinated strategies
       • Operations
       • Information and knowledge management
       • Development process and projects
       • Business planning
       • Partnerships                                               75
Perspectives
PSS design

•   New business paradigm opposes the existing operational business
    logic.

•   Cultural change from “offering a service to support a product” to
    “designing a service and the product that supports it”

•   Multiple development tasks - what are the integration points of
    business, product and service development?

•   How to harvest and feedback product life data/information/
    knowledge to designers?

•   What are the organisational implications of PSS design?

•   Potential for more sustainable business.


                                                                        76

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Service-oriented product development strategies (PhD defence)

  • 1. PhD defence Service-oriented product development strategies Adrian R. Tan Technical University of Denmark 4th June 2010 Actor network Business strategy Business planning Development Development projects Customer PSS activities Product development concept Service development Operations Production Installation Use Maintenance Service delivery Product life cycle
  • 2. Product/service-system (PSS) approaches Innovation strategies: • From business based on the value of the exchange of product ownership and responsibility, TRADITIONAL MANUFACTURING APPROACH PRODUCT SALE PRODUCTION DESIGN MARKETING $ Integrated Product Development Business! 2
  • 3. Product/service-system (PSS) approaches Innovation strategies: • From business based on the value of the exchange of product ownership and responsibility, • To business based on the value of supporting and enhancing the utility of products throughout their entire life cycle. PSS APPROACH INSTALLATION PRODUCTION DESIGN USE MARKETING $ DISPOSAL Business! $ Business! Business! $ 3
  • 4. Towards sustainable consumption and production • Business: better profits, on-going customer relations, competiveness • Customers: providing performance, utility and satisfaction directly • Sustainability: opportunity for greater efficiency and sufficiency PSS APPROACH INSTALLATION PRODUCTION DESIGN USE MARKETING $ DISPOSAL Business! $ Business! Business! $ 4
  • 5. An example: From photocopying machines to document services Monitoring Maintenance Training Repair Consulting Upgrade Delivery Spare Toner Paper parts 5
  • 6. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 6
  • 7. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 7
  • 8. New business opportunities for industry • Services and integrated solutions have always existed • Only recently there has been an interest in a systematic approach to developing integrated products and services • Services are becoming more important – also for manufacturing firms • Greater share of revenue • Greater profits • Business potential for companies by expanding features, value and benefits not apparent with traditional product- oriented offerings • Better fulfilment of customer needs • Possibility for improved sustainability due to dematerialisation and optimised use 8
  • 9. Research is lacking in PSS design • Plenty of PSS design methods …but these have not be verified • While many manufacturers are developing integrated solutions, … research on product/service development in a (manufacturing) company context is lacking and often many no not succeed • The synthesis and design-oriented aspects of PSS are not based on existing theories in design research • Engineering Design perspective on PSS is limited 9
  • 10. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 10
  • 11. Research objectives Aim: to provide industry with a better understanding of how products and services may be designed and developed in a manner that is both competitive and sustainable in economic, social and environmental terms. Objectives: 1. to establish a theoretical foundation for the systematic and methodological approach to PSS design; 2. to propose service-oriented development strategies, methods and techniques for manufacturing firms that wish to adopt PSS approaches. 11
  • 12. Research questions Q1. Compared to traditional product development, how can PSS be understood? Q2. How may PSS be conceptualised? Q3. How may PSS be developed in manufacturing firms? 12
  • 13. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 13
  • 14. Value proposition DESIGN OBJECT 14
  • 15. Value creation DESIGN PROCESS PRODUCTION DESIGN MARKETING 15
  • 16. Business strategy STRATEGIC Business MANAGEMENT strategy Business planning PRODUCTION DESIGN MARKETING 16
  • 17. Three perspectives in design research Business strategy Business planning PRODUCTION DESIGN MARKETING 17
  • 18. Three perspectives in design research STRATEGIC Business MANAGEMENT strategy Business planning DESIGN PROCESS DESIGN OBJECT PRODUCTION DESIGN MARKETING 18
  • 19. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 19
  • 20. Research methodology Research object: the design and development activities in a strategic business unit of a manufacturing company that lead to the employment of PSS approaches. Approach: • Interplay between [Andreasen 2008] theoretical and empirical insights • Exploratory, qualitative and engaging with practitioners and scholars 20
  • 21. Research methodology Research strategy: • Theory: literature & academic discussions • Empirical: five case studies RESEARCH QUESTIONS RESEARCH ANALYSIS Q1. Compared to traditional Literature review product development, how can PSS be understood? Case A. PSS design course Case B. Steelcase Q2. How may PSS be conceptualised? Case C. Vitsœ Q3. How may PSS be Case D. RiverSimple developed in manufacturing firms? Case E. SCA Hygiene Products 21
  • 22. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 22
  • 23. Literature review SUSTAINABILITY & ECO-DESIGN Sustainability-oriented Service Society Service Extended Economy Producer Servicizing Responsibility Product Life Closed Thinking Product Functional Service Loops Economy Engineering Product Life Cycle Eco-Efficient Management Services (PLM) PSS Product-oriented Functional Sales Engineering Design/ Product Functional Development Products Solution Extended Oriented Business Portfolio Enterprises Partnerships Development management Value Relationship Service Design/ Strategy Actor-oriented Networks Marketing Development/ INNOVATION Development & Marketing Formulation Service SUPPLY CHAIN MANAGEMENT Servitization Science Integrated Service-oriented Solutions 23
  • 24. Literature review • Design object perspective: • Products, services and PSS are alternative value propositions that all aim to fulfil a need • Focus on activities instead of products • Service content and service channel • Design process perspective: • The product is supported and enhanced throughout customer’s activities • With PSS customers play a more active role in value creation • Strategic management perspective: • PSS involves a strategic shift in business orientation • Transition process from product-oriented to service- oriented 24
  • 25. Reconciliation of product and customer perspectives Two life cycle chains PRODUCT LIFE CYCLE INSTALLATION MAINTENANCE PRODUCTION EXTRACTION TRANSPORT ASSEMBLY DISPOSAL SALE USE PRE POST SUPPORTING CUSTOMER’S ACTIVITIES CUSTOMER ACTIVITY CYCLE after Olesen [1992] and Vandermerwe [2000] [Tan, McAloone & Andreasen 2006] 25
  • 26. Strategies for the design of services PRODUCT-ORIENTED CUSTOMER-ORIENTED Customer Business Product use Product life activity supporting Product services services services services •Supplies •Maintenance •Training •Consulting •Installation •Repair •Planning •Financing •Auxiliary input •Spare parts •Designing •Managing •Upgrade •Warranty •Specifying •Partnering •Disposal Engineering Design •Operating •Outsourcing •Measuring Design for Serviceability Design for Supportability Design for Service Service Design [Tan, Matzen, McAloone & Evans, 2009] 26
  • 27. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 27
  • 28. Five case studies Case study Organisation Size Type of Core Main method for Duration of business offering gathering study information A University Approx. 45 Education Engineers Action research 2 x 13 weeks students in (B.Sc. & using PSS design (Sep – Jan PSS Design 2006/ 2007 & the course M.Sc.) methodology in a Course 2007/2008) each year course setting B Manufacturer Large Mainly Office Participant 15 months (< 500 business- furniture observer in a (Oct 2006 – Dec Steelcase 2007) employees) to-business development project C Manufacturer/ Small Mainly Shelving Action research 3 months Design firm (> 50 business- systems using PSS design (May – Jul 2008) Vitsœ employees) to- methodology in consumer workshop meetings D Technology Small Mainly Hydrogen Action research 2 months entrepreneur (> 50 business- car using PSS design (June – Jul 2008) RiverSimple employees) to- methodology in consumer workshop meeting E Manufacturer Large Mainly Inconti- Interviews and 3 months (< 500 business- nence workshops (Nov 2008 – Jan SCA 2009) employees) to- products Hygiene government Products 28
  • 29. Case study A: PSS Design Course Description: Action research using PSS design methodology in a university course setting. Based on a reference product (e.g. dishwasher, printer, shower, etc.) students had to design a PSS with the same utility but with considerable less environmental impacts 29
  • 30. Case study A: PSS Design Course Product life Gallery [McAloone 2007] Product life cycle Value Product description Trade offs Activity cycles Environmental analysis Actor network Meetings (product, life ) phase system and actor) [Student project 2006] 30
  • 31. Case study A: PSS Design Course Customer Activity Cycle [Vandermerwe 2000] [Student project 2006] 31
  • 32. Case study A: PSS Design Course Actor Network [Latour 1991, Donaldson et al. 2006] Wittenborg Coffee beans Coffee supplier Company/customer User Coffee contact Key Money-flow Service Communication Products/materials [Student project 2004] 32
  • 33. Case study A: PSS Design Course Insights: • Life cycle thinking approaches were effective to understand activities and behaviour • Three perspectives are used: product, life phase system and actor 33
  • 34. Case study B: Steelcase Description: Participant observer in a service-oriented development project Measure Explore Manage Plan Provide 34
  • 35. Case study B: Steelcase From office furniture to sustainable workplace performance 35
  • 36. Case study B: Steelcase From office furniture to sustainable workplace performance Employee satisfaction people Turnover Workspace satisfaction RESULTS Maintenance Operating costs Economic process Energy costs Indoor climate Sick days Social tools/ Energy consumption technology Employee health Environ- mental space Ergonomics Greenhouse gas emissions [Tan & Bey 2008] 36
  • 37. Case study B: Steelcase Insights: • Balance between product-orientation and service- orientation • Alignment of product and service strategies based on user-centred design and eco-design CONSULTING REDEFINE REFINE AS IS 37
  • 38. Case study C: Vitsœ Description: Action research using PSS design methodology in workshop meetings • Products are configurable systems designed by Dieter Rams • Designed with longevity in [www.vitsoe.com] mind and backwards compatible to be easily extended, rearranged and “‘help people live better with moved less that lasts longer. ” • Strong service culture 38
  • 39. Case study C: Vitsœ Customer Activity Cycle Actor Network [Gonzalez & Tan 2008] 39
  • 40. Case study C: Vitsœ Insights: • Sale of products with a strong service-orientation • Design and life cycle thinking applied throughout the business 40
  • 41. Case study D: RiverSimple Description: Action research using PSS design methodology in workshop meetings • Entrepreneurial technology company • Hyrban, a lightweight hydrogen city car • Sale of service model with use, fuel and maintenance included • Distributed manufacturing • Open source collaborative design 41
  • 42. Case study D: RiverSimple Product concept Manufacturing concept Lighter Low tooling costs composite Low minimum materials efficient scale Less demand for power Business strategy Smaller Distributed fuel cells manufacturing Multi- Less demand stakeholder for power Open source governance Electric design motors Releases Stores energy energy when when braking accelerating Ultra- Limited liability Sale of service capacitors partnerships model Lower costs per More energy driven mile efficient Include Higher maintenance unit cost and fuel Quick, clean servicing Longer service Recover Long term intervals costs through customer longer life commitments and recycling [after Hugo Spowers] 42
  • 43. Case study D: RiverSimple Insights: • Product is designed as a service from the start • Development of product, supporting system and orchestration of actors • Product characteristics linked to development, manufacturing and distribution strategies to support business strategy 43
  • 44. Case study E: SCA Hygiene Products Description: Interviews and workshops with company and customer representatives • Incontinence care to health care institutions • User-focus and customer- focus • Sales based on total costs not product costs • Global product development • Global and local service development 44
  • 45. Case study E: SCA Hygiene Products 45
  • 46. Case study E: SCA Hygiene Products Lyngby-Taarbæk kommune penge Politikere Økonomi årsrappo Socialdirektør rter og b esparelse kontr r akt Kommunikation Ældrechef Key Account Manager om nye produkter g Indkøber Driftsleder in gn l æ Udviklings an information pl -konsulent g ls es ivnin serviceid serviceidéer ne rådg n r og da orte Læge ud rapp rugs forb erfaringer og viden udreder støtte netværk opfølgning og rådgivningKontinens- Kontakt- Distriktschef sygeplejerske person undervisning pleje Pårørende Service- bevilling produktidéer Plejepersonale udvikling Borger forbrugs- rapporter bestilling bleer Legend: ordr Product Kundecenter e forecasting Depot Service bleer bleer Information Produkt- Money and udvikling contracts Fabrik Lagerhotel Distributør 46 [Tan & McAloone 2009]
  • 47. Case study E: SCA Hygiene Products Insights: • Actor network used as a communicative tool • Several value propositions offered at multiple levels • Changing the focus from product to service based on the use of products • Interaction between product development and service development 47
  • 48. Summary of case studies • Case A: PSS Design Course • Application and refinement of PSS conceptualisation methodology and tools • Case B: Steelcase • Understanding of a manufacturing organisation’s context for service-oriented product development • Case C: Vitsœ and Case D: RiverSimple • Industry application and evaluation of PSS conceptualisation methodology and tools • Case E: SCA Hygiene Products • Describing design and development activities in a service-oriented manufacturing firm 48
  • 49. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 49
  • 50. New perspectives in PSS design • Customers and their activities are a source of valuable resources during the CUSTOMER development of new products and services. • Manufacturers that take upon the responsibility of the physical products throughout their life phases have to define new roles and responsibilities on the market. • PSS approaches require a different set of knowledge and competencies that can be aimed directly at the customer’s activities. • The orchestration of a new value network collaborating with new business partners and reaching different target groups. 50
  • 51. Result 1: PSS conceptualisation Expanding with three essential perspectives Traditional Engineering Design perspective TS Hu Inf M&G AEnv I love Boris! Adrian + + Customer activities + Actor network Product life phase systems 51
  • 52. Result 1: PSS conceptualisation Analysis & Diagnosis Focus & Goal setting Focus & Goal setting Value Proposition Evaluation PSS Customer Product Activity Life Phase Cycle System Actor Network Conceptualisation 52
  • 53. Result 2: PSS development framework Operations Delivery of products and services Partner operations Company operations Customer activities 53
  • 54. Result 2: PSS development framework Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 54
  • 55. Result 2: PSS development framework Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Renewal and maintenance tasks Customer Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 55
  • 56. Result 2: PSS development framework Portfolio Strategy Business/ PSS conceptualisation Product planning Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Renewal and maintenance tasks Customer Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 56
  • 57. Result 2: PSS development framework Business Strategy Actor network Portfolio Strategy Business/ PSS conceptualisation Product planning Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Customer Renewal and maintenance tasks Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 57
  • 58. Result 2: PSS development framework Actor network Business strategy Business planning Development Development projects Customer PSS Product development activities concept Service development Operations Production Installation Use Maintenance Service delivery Product life cycle 58
  • 59. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 59
  • 60. Discussion 1/2 • Understanding PSS design • Theoretical foundation built on existing design research • PSS design perspectives could also be appropriate in traditional product development • PSS conceptualisation • The expansion of design dimensions: product life phase systems, customer activities and the actor network seem to be comprehensive and complete • The supporting tools can be easily used to generate and communicate PSS concepts • Appropriate for systematic generation of service- oriented concepts that lead to competitive and more sustainable solutions 60
  • 61. Discussion 2/2 • PSS development activities • A first mapping of design-related activities relevant for PSS • Only descriptive, does not say how the change to PSS should be organised • Framework has not been validated 61
  • 62. Key contributions • Framing of the synthesis and design-oriented aspects of PSS using Engineering Design and Product Development. • Expansion of the design object beyond physical products to also include service design. • Identification of the fundamental perspectives of PSS design concepts: product life phase systems, customer activities and actor network. • A set of visual design tools that allow each of the fundamental perspectives of PSS design concepts to be easily modelled. • The mapping of design and development activities associated with PSS approaches in manufacturing organisations based on empirical case studies. 62
  • 63. Service-oriented product development strategies Contents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 63
  • 64. Conclusion • PSS is different from traditional product development, but many existing theories can be applied • The shift towards PSS approaches for manufacturing firms is not trivial • The methodology for PSS conceptualisation is directly applicable in manufacturing firms • Early proposal for understanding and structuring design and development activities related to PSS in manufacturing companies 64
  • 66. Theory of Technical Systems OPERATORS: I love Boris! Adrian Information/ Management Technical Human knowledge & goal Active Systems Operators system system Environment OPERANDS: TS Hu Inf M&G AEnv INPUT OUTPUT material material information information I love Boris! energy A xox energy other other TRANSFORMATION PROCESS 66
  • 67. PSS development is different to traditional product development • the focus on activities instead of products as the mediator of value – the development and providing activities within a company should be aligned with their customers’ activities. • the involvement of the customer and other partners in the design process. • the redistribution of role and responsibility as the company takes greater responsibility of its products and also customer activities. • the expansion of competencies required to offer and deliver PSS solutions – how should the partnerships with external companies be integrated. • the integration of products and services – the development of the total range of products and services that are offered should be coordinated. • the need for a structured, systematic and formalised approach to capturing, storing and analysing data about the product’s use. • the closer strategic relations between the actors in a PSS and how all the development activities are integrated and coordinated. 67
  • 68. A PSS as a design process is a set of coordinated development activities at strategic, tactical and operational levels of the providing company (or companies) including the customer activities. • The model for PSS development shows development activities occur during operations (based on a service platform), in the development projects of products and services, during the product and service development process, business/product planning and strategy formulation. • The characteristics of services involve the customer in the co-creation of value – the role of marketing, production and design in manufacturing firms should be prepared for increased user-orientation activities during the development process. 68
  • 69. PSS approaches as an integrated business strategies are a set of strategies (i.e. business strategy, product strategy, service strategy) coordinated internally in an organisation but also externally with customers, suppliers and other partners. • The expansion of competencies required to offer and deliver PSS solutions – how should the partnerships with external companies be integrated. • The development and providing activities within a company should be aligned with their customers’ activities. • The integration of products and services – the development of the total range of products and services that are offered should be coordinated. 69
  • 70. Can the value of Does the potential Can the value of the actors’ utility of the product the product’s life activities be match the utility be increased increased and/or derived from actors’ and/or made more made more activities? resource efficient? resource efficient? Actor Product Activity Life Phase Chains Systems Value Are there any proposition Are there any opportunities for opportunities for actors along the actors along the actors’ activity product’s life chain? chain? Are the perceived benefits greater than the sacrifices for all actors? Actor Network How the four dimensions of PSS concepts should be integrated and coherent
  • 71. How the three dimensions of PSS concepts should be integrated and coherent VALUE RELATIONSHIPS Actor Value relations Network between actors How are the actors related throughout the product’s life How are the actors related through their activities? Value delivery Value created Value through activities proposition Actor Product Activity Life Phase Chains Systems ACTIVITIES How well is the product and product life suited to the activities they become part of?
  • 72. How case studies contributed to framework Business Strategy Actor network Portfolio Management Case study B: Business/ Steelcase Product planning Partner Development Projects Company Partner Product Product development Company development Customer Company Customer Case study C: Vitsœ Product life cycle and customer activity and Case study D: Knowledge Management knowledge management RiverSimple Operations Partner operations Case study E: SCA Company operations Hygiene Products Customer activities 72
  • 73. Morphology of service-oriented strategies STRATEGIC VARIATIONS OF CHARACTERISTICS CHARACTERISTICS Resource Minimise Minimise use of Increase Prolong Close material ... efficiency consumption of product utility of product loop strategy product product utility Responsibility or Installation Use Maintenance Repair Upgrade Reclaim Disposal ... management of product life Support or Design Operation Finance Training Support Monitoring Optimisation Consulting ... management of customer activity PSS DIMENSIONS PSS DIMENSIONS PSS DIMENSIONS PSS DIMENSIONS Partner or Suppliers Distributors Customers Customer’s Customer’s ... collaborate with suppliers customers actor (end-users) Availability of Always available for the Available at the customer Available at certain times ... offering customer when needed (serial use) or places Degree of Core benefit alone Multiple benefits Multiple benefits ... integration aggregated integrated Revenue Transfer of Value based Value based Value of the Value of Value of the ... mechanism ownership on per use on unit management of taking result of use consumed activities responsibility (performance (outsourcing) of the use based) 73
  • 74. Suggestions for future work • An Engineering Design approach to service design. The systematic and methodological approach to design that is well established in Engineering Design research has yet to embrace the design of services. • Collaboration with customers and users in PSS development. Customers and users represent valuable resources that can be actively employed in the development and delivery of PSS • Capturing and managing knowledge in PSS development. • Verification of PSS design methods and development processes in manufacturing firms. • Management of customer consumption. Efficiency and sufficiency. 74
  • 75. Perspectives • Systematic design approaches well established for products in manufacturing firms • Systematic design approaches exist for services, although not well adopted or coordinated with product development in manufacturing firms • PSS design should build upon existing methods and competencies in manufacturing companies • PSS as a design object • Conceptual elements of PSS • Product life • Customer activity • Actor Network • PSS as integrated strategies • Coordinated strategies • Operations • Information and knowledge management • Development process and projects • Business planning • Partnerships 75
  • 76. Perspectives PSS design • New business paradigm opposes the existing operational business logic. • Cultural change from “offering a service to support a product” to “designing a service and the product that supports it” • Multiple development tasks - what are the integration points of business, product and service development? • How to harvest and feedback product life data/information/ knowledge to designers? • What are the organisational implications of PSS design? • Potential for more sustainable business. 76