EIA pt.2 - PSS
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EIA pt.2 - PSS

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Product/Service-Systems lecture at the European Innovation Academy 2012, Tallinn

Product/Service-Systems lecture at the European Innovation Academy 2012, Tallinn

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EIA pt.2 - PSS EIA pt.2 - PSS Presentation Transcript

  • Design and Product DevelopmentGuest Lecture at Tallinn European Innovation AcademyThomas J. Howardwww.thomasjhoward.comthow@mek.dtu.dk Unless otherwise stated, this material is under a Creative Commons 3.0 Attribution–Share-Alike licence and can be freely modified, used and redistributed but only under the same licence and if including the following statement:“Original material by Tim C. McAloone and adapted by Thomas J. Howard,The Technical University of Denmark”
  • Agenda09:30 – Integrated Product Development10:05 – Exercise10:20 – Break and discussion10:30 – Product/Service-Systems (PSS)10:05 – Exercise11:20 – Break and discussion11:30 – Open Design11:05 – Exercise11:20 – Discussion LUNCH13:00 – Protovation13:45 – Exercise2 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Products and ServicesWhat is a Product? What is a Service? Use the terms Value and Stakeholder in your definitions3 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • DefinitionsProduct • The result of a synthesis process, where value is created by transferring ownership of the result from one stakeholder to the next.Service • The creation of value when one stakeholder carries out an activity on behalf of another. McAloone 20124 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • What is a PSS?A Product/Service-System is a system that supports and utilises the product through an extended (for the company) product life period Product life cycle Customer, Product User Product development Service: - selling use and functions Service provider McAloone & Andreasen 2002Service only exists when the customer uses it!5 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Why PSS ? RAW MATERIALS MANUFACTURE MAINTENANCE INSTALLATION TRANSPORT ASSEMBLY DISPOSAL SALES USE € Traditional producer ownership Traditional customer ownership Producer’s traditional responsibility/liability6 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Product life cycle design PSS-oriented business strategyWhy PSS ? RAW MATERIALS MANUFACTURE MAINTENANCE INSTALLATION TRANSPORT ASSEMBLY DISPOSAL SALES USE € € € € € Producer’s extended product responsibility, customer contact and revenue source7 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • PSS as a business strategyPSS means making a shift of business focus, from: business based on value creation through the transfer of product ownership and -responsibility to: business based on value creation through the support and delivery of a service from a product, for the whole of its lifetime…8 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Rolls Royce From airplane engines to ’power-by-the-hour’ In the airline industry, the company does not sell engines - it charges for use of the thrust they provide, on a power by the hour basis. Where previously the companys aerospace arm simply sold engines to plane companies, they now offer a fixed-fee maintenance back-up service for those engines, thus allowing customers to accurately project their maintenance and part replacement costs. [www.rolls-royce.com] Traditional model TotalCare model Focus on core Rolls-Royce Airline business Core business: passenger Airline revenues Rolls-Royce Overhaul Eng. Health Overhaul Predictive Base Monitoring Base maintenance Logistics Logistics Vendors Vendors Provider Provider Non-core business activities Rolls-Royce responsible for [www.rolls-royce.com] airline’s non-core business activities9 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Danfoss From electronic refrigeration controls to cooling in supermarkets In order to avoid being reduced to a component supplier (where competition is tough and margins slim) Danfoss has positioned itself as a provider of value added consultant advice to the food retail industry. By tying a closer link to the retailer Danfoss can increase knowledge about operational know-how. [www.danfoss.com] Value Added End-Users Supermarkets Services System house Contractors Networks Contractors OEM’s Systems OEM’s Components Distribution channel [Eriksen, Danfoss, 2005]10 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • 11 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Xerox From photocoping machines to document services Xerox has worked to turn its product into a service, providing a complete "document service" to companies including supply, maintenance, configuration, and user support. Customer‟s don‟t buy photocopy machines anymore, the buy the ability to photocopy. [www.xerox.com]12 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Aarstiderne From organic produce to convenient food delivery Aarstiderne has delivered organic products to the doorsteps of Danish households since 1999. It started out as a small vegetable garden at a farm, Barritskov, in the western part of Denmark. The idea behind Aarstiderne.com is to deliver organic food products directly to the doorstep of the customer who values quality and taste and thereby catalyses the public motion towards healthier food and better environment in Denmark – not by agitating, but simply by enabling everybody to be a part of the good idea. The products are supplied with recipes and stories about growers, production, farms, the company, food products and quality. [www.aarstiderne.com]13 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Douwe Egberts From coffee bean supplier to coffee systems Douwe Egberts was originally a coffee supplier. Normally clients in offices would buy a traditional hot plate-based coffee machine, buy consumables such as coffee and filters separately, and make pots of coffee in the traditional way. Douwe Egberts took the advantage by starting to offer coffee systems delivering freshly brewed, good-quality coffee per cup and thereby created a much more powerful position in the value chain. [www.douweegberts.com]14 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • IBM From computers to consulting services Traditionally IBM‟s business was in manufacturing computer hardware but over the years they have moved to a more business and software consulting service approach. This was particularly noticeable with the sale of their personal computers to Chinese manufacturer Lenovo in 2004 [www.ibm.com]15 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • DuPont From paint to painted cars DuPont Payment by paint quality:Ford producing Reward: selling more paint DuPont No action concerning painting Ford painting Flexible delivery Quality of painted surface Ford Cost of painting Payment per car: Concern of reducing quantity DuPont Immediate delivery Ford producing Quality of the painted surface Immediate satisfaction DuPont painting No action concerning painting Ford Customer: Long-term interest of quality from satisfaction delivery system [McAloone, 2003] 16 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • easyJet From 3rd party booking to direct booking service easyJet is perhaps more renowned for its „lack of‟ or „no frills‟ approach to service. However, in the late 90‟s, airliners were running a very standard business model providing service in a „complementary‟ form rather than a extra revenue form. easyjet were able to strip this service and translate it to low costs, something a large proportion of the market valued greatly. But more importantly easyjet were able to harness web bookings enabling them to provide a service to their customers that, at the time, was only available through 3rd party travel agents and thus dramatically reduced costs, prompting their slogan “the web‟s favorite airline”.17 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • In your teams discuss the following scenario: “You have been developing and selling microwave ovens for many years and have seen profits steadily falling due to increased competition. How could you add a service dimension to your business and what market segment would you target?18 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Product/Service Orientation19 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Product Life & User Activity Cycles PRODUCT’S LIFE CYCLE RAW MATERIALS MANUFACTURE MAINTENANCE INSTALLATION TRANSPORT ASSEMBLY DISPOSAL SALES USE Tan, A., McAloone, T.C., Andreasen, M., “What happens to integrated product development Models with product/service-system approaches?”, The 6th Integrated Product Development workshop, 2006 SUPPORT OF CUSTOMER’S ACTIVITIES CUSTOMER’S ACTIVITY CYCLE20 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Strategies of Service Design Customer Business Product life activity supporting Product use services services services services •Training •Consulting •Supplies •Maintenance •Planning •Financing •Installation •Repair •Designing •Managing •Auxiliary input •Spare parts •Specifying •Partnering •Upgrade Product •Warranty •Operating •Outsourcing •Disposal •Measuring Design for Serviceability [Dewhurst 1994] Design for Supportability [Goffin, 2000][Takata et al. 2004] Design for Service [Harrison, 2006]21 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • PSS can be an effective way to bring suppliers closer to customers while responding more to the customer’s real needs. Services should be integrated into the design of products where valuable.22 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark
  • Questions ?23 Original material by Tim C. McAloone and adapted Thomas J. Howard 2012 The Technical University of Denmark