These slides were presented on July 30, 2014 at PICMET'2014 conference, Kanazawa, Japan Abstract of the paper: Since the 1970s, marketing and innovation management communities have been investigating how to incorporate customer-desired functions into new product and service designs. These wide-ranging enquiries have shed light on the impact of lead-user engagement in new product development, demonstrated ways to examine service production and delivery, such as the use of ‘line of visibility’ in service blueprints and the modeling of ‘service encounters’, and have created new terms such as ‘value co-creation’. Despite these efforts, recent reviews have identified the lack of an holistic approach to new product-service system (PSS) development. This deficiency needs to be rectified, especially for complex PSS developments in regulated industries such as healthcare, as often there are multiple stakeholders posing conflicting priorities to the development team. This paper describes a PSS characterization approach that supports the early-stage new PSS development process. The approach is generated from eleven healthcare case studies, involving twenty-five new products, services and PSSs. Following the methodology of action research, further cases are selected for the application of the approach to a new product, service or PSS concept in facilitated workshops. Initial implications of employing this approach in three cases are discussed in this paper.

1. Characterizing Product-Service Systems (PSS) in
the Healthcare Industry
Authors: Man Hang Yip, Robert Phaal, David R. Probert
Centre for Technology Management, Department of
Engineering, University of Cambridge, U.K.
Presentation by Man Hang Yip at PICMET’14 at Kanazawa, Japan
July 30, 2014

2. Content
• Motivations & objectives
• Literature highlights
• The ‘PSS Characterization Approach’ in brief
• The implications of this approach
• Conclusions
• Limitations
2
Yip, M.H. © 2014

3. Motivations & objectives
3
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Hospital
Healthcare service
effectiveness
How and what to innovate?
A new PSS characterization scheme to support the early
stage new PSS development process
Manufacturers
Yip, M.H. © 2014

4. Literature highlights – P, S, and PSS
4
A service cannot be stocked without losing its identity and requires both
producer and consumer; hence is constrained by time and location (Hill, 1999).
A product “exists independently of its owner and preserves its identity through
time” (Hill, 1999, pp. 437), and can be intangible (e.g. a digital sound track).
Product, Service, and PSS
A PSS is a combination of products and services, jointly fulfilling a user’s needs
(Goedkoop, van Halan, te Riele, & Rommens, 1999)
PSS classification
Frequently used: product-oriented, use-oriented, and result-oriented, which was
extended to include integration-oriented and service-oriented (Neely, 2009)
Issues: built using the traditional reference of product being tangible, and the
classifications are more useful for business modelling than for new PSS
development
Yip, M.H. © 2014

5. Literature highlights – contextual influence
5
From business ecosystem literature – companies to look beyond the ‘extended
enterprise’ boundary to include government, regulatory bodies, competitors, and
other stakeholders’ interests (Moore, 2006)
Context
From actor-network theory – provides the theoretical
basis to allow connections among actors, that
includes both human and non-human, to be brought
out and examined through ‘flattening’ levels and
placing actors side-by-side (Latour, 2005; Law, 1992)
From value-in-use literature – Service-Dominant Logic urges
companies to focus on customer value and proposes the concept
that the context of value creation is network of networks (Vargo &
Lusch, 2004; 2008)
Yip, M.H. © 2014

6. The PSS Characterization Approach (in brief)
6
Step 4: PSS
Representation
Step 1: PSS
Depiction
Step 5: PSS
Characterisation
Step 3: PSS
Decomposition
Step 2: PSS
Abstract
Representation
Company’s strategy on new
product and service
Step 0:
Stakeholder
identification
Yip, M.H. © 2014
The Four PSS Characteristics:
- potential customer perceived value level
- type and degree of connectivity
- connectivity number
- PSS configuration type

7. 7
Yip, M.H. © 2014
Step 1
Step 2
Step 3
Step 3
Step 4
Step 5

8. The implications of this approach
8
PSS Definition
Customer value
Environmental impact
Product & service content
Strategy for NPSSD
Process for NPSSD
Yip, M.H. © 2014

9. The applicability of this approach to support
the early stage of NPSSD
9
Applicability Findings
Feasibility Stakeholder identification & PSS abstraction steps could possibly be
completed without a trained facilitator
Usability Needs refinement, but the approach is robust enough to be applied in
different scenarios
Utility • Useful for identifying stakeholders, relevant existing and new product
and service elements for the new PSS
• Encouraged participants to think about which element within the PSS
potentially more valued by the customers
• Meaningfully showed how the product and service elements interact
within the PSS, and how they are to connect with the operating
environment
Yip, M.H. © 2014

10. Conclusions
10
Is an applicable
approach to
support the early
stage of NPSSD.
Allows the four PSS
characteristics to be
obtained in a systematic and
repeatable manner.
Clarifies the PSS definition:
1) What do the customer
value?
2) How does it impact the
environment? Who are
the key stakeholders?
3) What are the more
important elements,
how do they interact?
Informs the NPSSD strategy
and process:
4) Where does the complexity
of the development come from?
5) What is the main focus, what
is supplementary?
Yip, M.H. © 2014

11. Limitations
11
After this paper was written …
7 more workshops targeting
new PSS ideas in both
healthcare and non-healthcare
were completed.
An independent observer was
used in three workshops to
enrich the assessment of the
approach.
The PSS characteristics proposed are
generated from healthcare cases, and may
be limited to NPSSD in the healthcare
industry only.
Only three workshop results are included in
this paper for producing the assessment of
the applicability of the PSS characterization
approach and its implications to the PSS
definition.
As action research is used as the
methodology, the feasibility of the approach
is influenced by the facilitation skills of the
researcher.
The interpretation of the workshop findings
is biased by the researcher’s culture,
background, and knowledge of the PSS in
discussion.
Yip, M.H. © 2014

12. Yip, M.H. © 2014
12
If you are interested in this paper, it is in the PICMET’2014 conference proceeding.
The title of the paper is: Characterizing Product-Service Systems in the Healthcare Industry
Suggested reference to this presentation:
Yip, M. H. (2014). Characterizing Product-Service Systems (PSS) in the Healthcare
Industry [PowerPoint slides]. Retrieved from http://www.shlideshare.net/pss-
characterisation-presentation-post-presentation