Integrated Product-Service Systems

Abstract

Gummesson (1995) was one of the fi rst researchers to emphasize the fact that customers are not buying products any more but are rather buying offerings that are based on services which create an added value. The services offered need to solve real customer problems in an effi cient and cost-effective way. The value creation of the service should be perceived instantly and be transparent to customers for evalu-ation of the performance. The transition from manufacturer to service provider can be justifi ed not only from the perspective of potential fi nancial benefi ts. 3.1 Types of Industrial Services For machine-building companies, the range of services offered to the market can include a wide spectrum of offerings. In order to describe the possibilities, there are several ways to classify industrial services into categories. Edvardsson (1997) outlines eight types of industrial service offerings. Table 3.1 presents an overview of the types. Repair and maintenance are examples of traditional services offered to custom-ers. These require technical knowledge of the product and can help customers to extend the operational life cycle of the product. Training is an example of the sup-port needed to ramp up operations and at the same time help to ensure the perfor-mance of the physical product. Once the installed base of the products is increasing and operational products are reaching the maturity phase of the life cycle, retrofi t services may be offered to existing customers. Retrofi t services can be used to mod-ernize competitors' equipment to the customer. Process optimization requires skills related to actual operations rather than technical and manufacturing knowledge of the product. Service level agreements (SLA) can specify the offered service at each stage and condition. A high end SLA contract may include penalties and bonuses based on the performance delivered. Short-term rental generates fl exibility and gives a fi nancial component to service. Long-term rental has less fl exibility but may provide a good fi nancial solution packaged together with performance promise.