System modeling: A foundation for costing through-life availability provision

Abstract

Under performance-guaranteeing contracts, such as availabilitybased contracts, the Original Equipment Manufacturers (OEMs) have become increasingly concerned with understanding and managing the cost of their commitment to deliver specific results to customer through-life. However, current approaches to cost estimating hardly offer more than sheer claims of the existence of a link between cost and organizational performance – no matter whether products, services or product-service-systems (PSS) are at stake. This paper presents an intermediate step towards a computational structure explicitly linking cost and performance for PSS. A PSS is represented formally as a system combining assets and activities delivering the results OEMs are committed to through-life. Inter-temporal aspects of PSS provision which typically define the successful delivery of an asset’s availability are taken into account. Network formalism and principles derived from Input-Output Analysis are employed to base PSS cost estimation on a representation of a PSS as a ‘system’.