Opportunity parameters in the development of Product/Service-Systems

Publication: Research - peer-reviewArticle in proceedings – Annual report year: 2006

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In the light of the current focus on innovative business development throughout industry and society, the concept of product/service-systems (PSS) is a promising approach to product development, which may yield product offers that benefit the company, customer and society alike. Only recently researchers have made attempts to formulate requirements and procedures for the integration of product and service development [Steinbach 2005]. In the field of environmental studies, the concept of PSS has been investigated for some time, especially for the opportunities of lowering environmental impact while maintaining a high level of need satisfaction [Mont 2004]. The enhancement of goods with the provision of services has been practised in some industrial sectors for decades, mainly based on maintenance deliveries to capital investments in B2B settings. Researchers working with these business models also use the terms functional products or total care products [Alonso-Rasgado et al. 2004]. In the age of industrial globalisation, we believe a PSS-based business integration can help traditional product based companies to strengthen their position in the marketplace. By following a product/service-oriented strategy we believe companies can deliver superior value solutions and ensure more optimal utilisation of resources by aligning operations with their customers compared to traditional product-oriented offers. The corresponding integration is not reflected in existing models and processes of product development. Our aim is to build a foundation and provide tools for integrated development of products and service-systems. The shift from product- to product/service-orientation can be a difficult strategic task. There are many degrees of freedom in the configuration of the product offers. The stakeholder network that has to be managed in a product/service-oriented setting is a degree more complex compared to the fewer and well defined relationships in product-oriented business models. The responsibilities of the providing company are often expanded compared to a product-oriented setting. All these factors introduce risk and uncertainty, if the nature of PSS is not well understood. Although still on a speculative level, we believe the mindset presented in this paper is a good foundation for understanding product/service-integration. The presented results can guide considerations to shape strategic PSS concepts and delimit the extend of product offers to be developed. To enable a company in providing PSS-solutions, a number of conditions must typically be fulfilled, namely the following: • The product development activities must be more closely coordinated with customers’ activities and their development. • The product development activities must be more closely coordinated internally to align the development of goods and the connected service development and delivery systems. • The company must usually engage in strategic alliances with other organisations in order to enrich the product offer. • The activity pattern of the company must expand, from the production and sale of goods to the creation of delivery channels and preparedness for the delivery of services. This paper will focus on issues related to the first three conditions listed. We will present a set of opportunity parameters, which we believe are generally applicable for guiding companies in the formulation of strategies and objectives in the process of shifting from product to product/service- orientation. The presented parameters are mainly extracted from analysis of existing PSS cases from industry and concept work conducted in study projects at DTU throughout the last 2 years.
Original languageEnglish
TitleDESIGN 2006 : Proceedings of the 9th international design conference
EditorsDorian Marjanovic
Number of pages1569
Volume2
Place of publicationZagreb
PublisherFaculty of Mechanical Engineering and Naval Architecture
Publication date2006
Edition1
Pages929-937
ISBN (print)953-6313-78-2
StatePublished

Conference

Conference9th International Design Conference
Number9
CountryCroatia
CityDubrovnik
Period15/05/0618/05/06
Internet addresshttp://www.designsociety.org/design_2006-9th_international_design_conference.event.1.2006-05-15.htm
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