Module 2 - Intro to Services.pdf - Module 2 Service Operations and Transformation Aalto Introduction to Services Master’s program in Information and

Module 2 - Intro to Services.pdf - Module 2 Service...

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Word count: 1074 Module 2: Service Operations and Transformation Aalto Introduction to Services Master’s program in Information and Service Management
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Word count: 1074 1 INTRODUCTION The ability to provide customers with different dimensions of service is commonly regarded as a critical determinant of a manufacturer’s competitiveness. However, the markets for many manufactured products are maturing and the output has remained relatively stable. Hence, manufacturers have to find another way to deliver the value to customers, by shifting from a product-focus to a service- or product/service- focus. The transition becomes a priority for many, however, it might be challenging for manufacturing companies to implement this adoption. In this essay, the key difficulties an industrial equipment manufacturer faces when moving towards services by offering more product-centric services are presented. 2 THE TRANSITION FROM PRODUCTS TO SERVICES In order to understand the key challenges of the implementation of a service- or product/service- focus, it is necessary to clarify the definition of service transformation, which is also known as servitization and the related concepts. 2.1 Servitization Servitization is often defined as the organizations’ capabilities to shift from selling pure products to selling not only products but also integrated services that provide added value on a continuum (Olivia & Kallenberg 2009). A transition from left to right on the continuum means the higher involvement of the value of the combined services: from products with services as “add-on” to services with products as “add-on”. The figure is based on Oliva and Kallenberg’s continuum (Ekstromer & Leife 2018).
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Word count: 1074 Figure 1 : The product-service continuum 2.2 Typology of production and service operations Product service system(PSS) is the end-result of servitization, where products and services are integrated to deliver value to customers. There are many frameworks to classify services and the most well-known one belongs to Tukker. Tukker (2004) categorizes PSSs into three groups: product-oriented, use-oriented and result-oriented (Baines et al. 2009). For example, Porsche – an automobile manufacturer – has its main product is card. The product-oriented service is maintenance or repair, while the use- oriented is leasing, renting or sharing. The result-oriented service includes
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