Service-oriented product development strategies (PhD defence)

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Service-oriented product development strategies (PhD defence)

  1. 1. PhD defenceService-oriented product development strategiesAdrian R. TanTechnical University of Denmark4th June 2010 Actor network Business strategy Business planning Development Development projects Customer PSS activities Product development concept Service development Operations Production Installation Use Maintenance Service delivery Product life cycle
  2. 2. Product/service-system (PSS) approachesInnovation strategies:• From business based on the value of the exchange of product ownership and responsibility, TRADITIONAL MANUFACTURING APPROACH PRODUCT SALE PRODUCTION DESIGN MARKETING $ Integrated Product Development Business! 2
  3. 3. Product/service-system (PSS) approachesInnovation strategies:• From business based on the value of the exchange of product ownership and responsibility,• To business based on the value of supporting and enhancing the utility of products throughout their entire life cycle. PSS APPROACH INSTALLATION PRODUCTION DESIGN USE MARKETING $ DISPOSAL Business! $ Business! Business! $ 3
  4. 4. Towards sustainable consumption and production• Business: better profits, on-going customer relations, competiveness• Customers: providing performance, utility and satisfaction directly• Sustainability: opportunity for greater efficiency and sufficiency PSS APPROACH INSTALLATION PRODUCTION DESIGN USE MARKETING $ DISPOSAL Business! $ Business! Business! $ 4
  5. 5. An example:From photocopying machines to document services Monitoring Maintenance Training Repair Consulting Upgrade Delivery Spare Toner Paper parts 5
  6. 6. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 6
  7. 7. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 7
  8. 8. New business opportunities for industry• Services and integrated solutions have always existed • Only recently there has been an interest in a systematic approach to developing integrated products and services• Services are becoming more important – also for manufacturing firms • Greater share of revenue • Greater profits• Business potential for companies by expanding features, value and benefits not apparent with traditional product- oriented offerings• Better fulfilment of customer needs• Possibility for improved sustainability due to dematerialisation and optimised use 8
  9. 9. Research is lacking in PSS design• Plenty of PSS design methods …but these have not be verified• While many manufacturers are developing integrated solutions, … research on product/service development in a (manufacturing) company context is lacking and often many no not succeed• The synthesis and design-oriented aspects of PSS are not based on existing theories in design research • Engineering Design perspective on PSS is limited 9
  10. 10. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 10
  11. 11. Research objectivesAim: to provide industry with a better understanding of how products and services may be designed and developed in a manner that is both competitive and sustainable in economic, social and environmental terms.Objectives:1. to establish a theoretical foundation for the systematic and methodological approach to PSS design;2. to propose service-oriented development strategies, methods and techniques for manufacturing firms that wish to adopt PSS approaches. 11
  12. 12. Research questionsQ1. Compared to traditional product development, how can PSS be understood?Q2. How may PSS be conceptualised?Q3. How may PSS be developed in manufacturing firms? 12
  13. 13. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 13
  14. 14. Value proposition DESIGN OBJECT 14
  15. 15. Value creation DESIGN PROCESS PRODUCTION DESIGN MARKETING 15
  16. 16. Business strategy STRATEGIC Business MANAGEMENT strategy Business planning PRODUCTION DESIGN MARKETING 16
  17. 17. Three perspectives in design research Business strategy Business planning PRODUCTION DESIGN MARKETING 17
  18. 18. Three perspectives in design research STRATEGIC Business MANAGEMENT strategy Business planning DESIGN PROCESS DESIGN OBJECT PRODUCTION DESIGN MARKETING 18
  19. 19. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 19
  20. 20. Research methodologyResearch object: the design and development activities in a strategic business unit of a manufacturing company that lead to the employment of PSS approaches.Approach:• Interplay between [Andreasen 2008] theoretical and empirical insights• Exploratory, qualitative and engaging with practitioners and scholars 20
  21. 21. Research methodologyResearch strategy:• Theory: literature & academic discussions• Empirical: five case studies RESEARCH QUESTIONS RESEARCH ANALYSIS Q1. Compared to traditional Literature review product development, how can PSS be understood? Case A. PSS design course Case B. Steelcase Q2. How may PSS be conceptualised? Case C. Vitsœ Q3. How may PSS be Case D. RiverSimple developed in manufacturing firms? Case E. SCA Hygiene Products 21
  22. 22. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 22
  23. 23. Literature review SUSTAINABILITY & ECO-DESIGN Sustainability-oriented Service Society Service Extended Economy Producer Servicizing Responsibility Product Life Closed Thinking Product Functional Service Loops Economy Engineering Product Life Cycle Eco-Efficient Management Services (PLM) PSS Product-oriented Functional Sales Engineering Design/ Product Functional Development Products Solution Extended Oriented Business Portfolio Enterprises Partnerships Development management Value Relationship Service Design/ Strategy Actor-oriented Networks Marketing Development/ INNOVATION Development & Marketing Formulation ServiceSUPPLY CHAIN MANAGEMENT Servitization Science Integrated Service-oriented Solutions 23
  24. 24. Literature review• Design object perspective: • Products, services and PSS are alternative value propositions that all aim to fulfil a need • Focus on activities instead of products • Service content and service channel• Design process perspective: • The product is supported and enhanced throughout customer’s activities • With PSS customers play a more active role in value creation• Strategic management perspective: • PSS involves a strategic shift in business orientation • Transition process from product-oriented to service- oriented 24
  25. 25. Reconciliation of product and customerperspectivesTwo life cycle chains PRODUCT LIFE CYCLE INSTALLATION MAINTENANCE PRODUCTION EXTRACTION TRANSPORT ASSEMBLY DISPOSAL SALE USE PRE POST SUPPORTING CUSTOMER’S ACTIVITIES CUSTOMER ACTIVITY CYCLE after Olesen [1992] and Vandermerwe [2000] [Tan, McAloone & Andreasen 2006] 25
  26. 26. Strategies for the design of servicesPRODUCT-ORIENTED CUSTOMER-ORIENTED Customer Business Product use Product life activity supporting Product services services services services •Supplies •Maintenance •Training •Consulting •Installation •Repair •Planning •Financing •Auxiliary input •Spare parts •Designing •Managing •Upgrade •Warranty •Specifying •Partnering •DisposalEngineering Design •Operating •Outsourcing •Measuring Design for Serviceability Design for Supportability Design for Service Service Design [Tan, Matzen, McAloone & Evans, 2009] 26
  27. 27. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 27
  28. 28. Five case studies Case study Organisation Size Type of Core Main method for Duration of business offering gathering study informationA University Approx. 45 Education Engineers Action research 2 x 13 weeks students in (B.Sc. & using PSS design (Sep – JanPSS Design 2006/ 2007 & the course M.Sc.) methodology in aCourse 2007/2008) each year course settingB Manufacturer Large Mainly Office Participant 15 months (< 500 business- furniture observer in a (Oct 2006 – DecSteelcase 2007) employees) to-business development projectC Manufacturer/ Small Mainly Shelving Action research 3 months Design firm (> 50 business- systems using PSS design (May – Jul 2008)Vitsœ employees) to- methodology in consumer workshop meetingsD Technology Small Mainly Hydrogen Action research 2 months entrepreneur (> 50 business- car using PSS design (June – Jul 2008)RiverSimple employees) to- methodology in consumer workshop meetingE Manufacturer Large Mainly Inconti- Interviews and 3 months (< 500 business- nence workshops (Nov 2008 – JanSCA 2009) employees) to- productsHygiene governmentProducts 28
  29. 29. Case study A: PSS Design CourseDescription: Action research using PSS design methodology in a university course setting. Based on a reference product (e.g. dishwasher, printer, shower, etc.) students had to design a PSS with the same utility but with considerable less environmental impacts 29
  30. 30. Case study A: PSS Design Course Product life Gallery [McAloone 2007] Productlife cycle Value Productdescription Trade offsActivity cycles Environmental analysis Actor network Meetings (product, life ) phase system and actor) [Student project 2006] 30
  31. 31. Case study A: PSS Design CourseCustomer Activity Cycle [Vandermerwe 2000] [Student project 2006] 31
  32. 32. Case study A: PSS Design CourseActor Network [Latour 1991, Donaldson et al. 2006] Wittenborg Coffee beans Coffee supplier Company/customer User Coffee contact Key Money-flow Service Communication Products/materials [Student project 2004] 32
  33. 33. Case study A: PSS Design CourseInsights:• Life cycle thinking approaches were effective to understand activities and behaviour• Three perspectives are used: product, life phase system and actor 33
  34. 34. Case study B: SteelcaseDescription: Participant observer in a service-oriented development project Measure Explore Manage Plan Provide 34
  35. 35. Case study B: SteelcaseFrom office furniture to sustainable workplace performance 35
  36. 36. Case study B: SteelcaseFrom office furniture to sustainable workplace performance Employee satisfaction people Turnover Workspace satisfaction RESULTS Maintenance Operating costs Economic process Energy costs Indoor climate Sick days Social tools/ Energy consumption technology Employee health Environ- mental space Ergonomics Greenhouse gas emissions [Tan & Bey 2008] 36
  37. 37. Case study B: SteelcaseInsights:• Balance between product-orientation and service- orientation• Alignment of product and service strategies based on user-centred design and eco-design CONSULTING REDEFINE REFINE AS IS 37
  38. 38. Case study C: VitsœDescription: Action research using PSS design methodology in workshop meetings• Products are configurable systems designed by Dieter Rams• Designed with longevity in [www.vitsoe.com] mind and backwards compatible to be easily extended, rearranged and “‘help people live better with moved less that lasts longer. ”• Strong service culture 38
  39. 39. Case study C: VitsœCustomer Activity Cycle Actor Network [Gonzalez & Tan 2008] 39
  40. 40. Case study C: VitsœInsights:• Sale of products with a strong service-orientation• Design and life cycle thinking applied throughout the business 40
  41. 41. Case study D: RiverSimpleDescription: Action research using PSS design methodology in workshop meetings • Entrepreneurial technology company • Hyrban, a lightweight hydrogen city car • Sale of service model with use, fuel and maintenance included • Distributed manufacturing • Open source collaborative design 41
  42. 42. Case study D: RiverSimple Product concept Manufacturing concept Lighter Low tooling costs composite Low minimum materials efficient scale Less demand for power Business strategy Smaller Distributed fuel cells manufacturing Multi- Less demand stakeholder for power Open source governance Electric design motors ReleasesStores energy energy whenwhen braking accelerating Ultra- Limited liability Sale of service capacitors partnerships model Lower costs per More energy driven mile efficient Include Higher maintenance unit cost and fuel Quick, clean servicing Longer service Recover Long term intervals costs through customer longer life commitments and recycling [after Hugo Spowers] 42
  43. 43. Case study D: RiverSimpleInsights:• Product is designed as a service from the start• Development of product, supporting system and orchestration of actors• Product characteristics linked to development, manufacturing and distribution strategies to support business strategy 43
  44. 44. Case study E: SCA Hygiene ProductsDescription: Interviews and workshops with company and customer representatives • Incontinence care to health care institutions • User-focus and customer- focus • Sales based on total costs not product costs • Global product development • Global and local service development 44
  45. 45. Case study E: SCA Hygiene Products 45
  46. 46. Case study E: SCA Hygiene Products Lyngby-Taarbæk kommune penge Politikere Økonomi årsrappo Socialdirektør rter og b esparelse kontr r akt Kommunikation Ældrechef Key Account Manager om nye produkter g Indkøber Driftsleder in gn l æ Udviklings an information pl -konsulent g ls es ivnin serviceid serviceidéer ne rådg n r og da orte Læge ud rapp rugs forb erfaringer og viden udreder støtte netværk opfølgning og rådgivningKontinens- Kontakt- Distriktschef sygeplejerske person undervisning pleje Pårørende Service- bevilling produktidéer Plejepersonale udvikling Borger forbrugs- rapporter bestilling bleer Legend: ordr Product Kundecenter e forecasting Depot Service bleer bleer Information Produkt- Money and udvikling contracts Fabrik Lagerhotel Distributør 46 [Tan & McAloone 2009]
  47. 47. Case study E: SCA Hygiene ProductsInsights:• Actor network used as a communicative tool• Several value propositions offered at multiple levels• Changing the focus from product to service based on the use of products• Interaction between product development and service development 47
  48. 48. Summary of case studies• Case A: PSS Design Course • Application and refinement of PSS conceptualisation methodology and tools• Case B: Steelcase • Understanding of a manufacturing organisation’s context for service-oriented product development• Case C: Vitsœ and Case D: RiverSimple • Industry application and evaluation of PSS conceptualisation methodology and tools• Case E: SCA Hygiene Products • Describing design and development activities in a service-oriented manufacturing firm 48
  49. 49. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 49
  50. 50. New perspectives in PSS design• Customers and their activities are a source of valuable resources during the CUSTOMER development of new products and services.• Manufacturers that take upon the responsibility of the physical products throughout their life phases have to define new roles and responsibilities on the market.• PSS approaches require a different set of knowledge and competencies that can be aimed directly at the customer’s activities.• The orchestration of a new value network collaborating with new business partners and reaching different target groups. 50
  51. 51. Result 1: PSS conceptualisation Expanding with three essential perspectives Traditional Engineering Design perspective TS Hu Inf M&G AEnv I love Boris! Adrian + +Customer activities + Actor network Product life phase systems 51
  52. 52. Result 1: PSS conceptualisation Analysis & Diagnosis Focus & Goal setting Focus & Goal setting Value Proposition Evaluation PSS Customer Product Activity Life Phase Cycle System Actor Network Conceptualisation 52
  53. 53. Result 2: PSS development framework Operations Delivery of products and services Partner operations Company operations Customer activities 53
  54. 54. Result 2: PSS development framework Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 54
  55. 55. Result 2: PSS development framework Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Renewal and maintenance tasks Customer Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 55
  56. 56. Result 2: PSS development frameworkPortfolio Strategy Business/ PSS conceptualisation Product planning Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Renewal and maintenance tasks Customer Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 56
  57. 57. Result 2: PSS development framework Business Strategy Actor networkPortfolio Strategy Business/ PSS conceptualisation Product planning Product and service Development Partner development projects Company Business oriented tasks Partner Pre-business oriented tasks Product Product development Company development Cross-disciplinary tasks Customer Support tasks Company Customer Renewal and maintenance tasks Product life cycle and customer activity knowledge management Operations Delivery of products and services Partner operations Company operations Customer activities 57
  58. 58. Result 2: PSS development framework Actor network Business strategy Business planning Development Development projects Customer PSS Product development activities concept Service development Operations Production Installation Use Maintenance Service delivery Product life cycle 58
  59. 59. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 59
  60. 60. Discussion 1/2• Understanding PSS design • Theoretical foundation built on existing design research • PSS design perspectives could also be appropriate in traditional product development• PSS conceptualisation • The expansion of design dimensions: product life phase systems, customer activities and the actor network seem to be comprehensive and complete • The supporting tools can be easily used to generate and communicate PSS concepts • Appropriate for systematic generation of service- oriented concepts that lead to competitive and more sustainable solutions 60
  61. 61. Discussion 2/2• PSS development activities • A first mapping of design-related activities relevant for PSS • Only descriptive, does not say how the change to PSS should be organised • Framework has not been validated 61
  62. 62. Key contributions• Framing of the synthesis and design-oriented aspects of PSS using Engineering Design and Product Development.• Expansion of the design object beyond physical products to also include service design.• Identification of the fundamental perspectives of PSS design concepts: product life phase systems, customer activities and actor network.• A set of visual design tools that allow each of the fundamental perspectives of PSS design concepts to be easily modelled.• The mapping of design and development activities associated with PSS approaches in manufacturing organisations based on empirical case studies. 62
  63. 63. Service-oriented product development strategiesContents 1. Introduction to PSS design and development 2. Research aims, objective and questions 3. Three perspectives to design 4. Research methodology 5. Theoretical basis 6. Five empirical case studies 7. Results 8. Discussion 9. Conclusion 63
  64. 64. Conclusion• PSS is different from traditional product development, but many existing theories can be applied• The shift towards PSS approaches for manufacturing firms is not trivial• The methodology for PSS conceptualisation is directly applicable in manufacturing firms• Early proposal for understanding and structuring design and development activities related to PSS in manufacturing companies 64
  65. 65. Questions?
  66. 66. Theory of Technical SystemsOPERATORS: I love Boris! Adrian Information/ Management Technical Human knowledge & goal Active Systems Operators system system EnvironmentOPERANDS: TS Hu Inf M&G AEnv INPUT OUTPUT material materialinformation information I love Boris! energy A xox energy other other TRANSFORMATION PROCESS 66
  67. 67. PSS development is different to traditionalproduct development• the focus on activities instead of products as the mediator of value – the development and providing activities within a company should be aligned with their customers’ activities.• the involvement of the customer and other partners in the design process.• the redistribution of role and responsibility as the company takes greater responsibility of its products and also customer activities.• the expansion of competencies required to offer and deliver PSS solutions – how should the partnerships with external companies be integrated.• the integration of products and services – the development of the total range of products and services that are offered should be coordinated.• the need for a structured, systematic and formalised approach to capturing, storing and analysing data about the product’s use.• the closer strategic relations between the actors in a PSS and how all the development activities are integrated and coordinated. 67
  68. 68. A PSS as a design process is a set ofcoordinated development activities atstrategic, tactical and operational levels ofthe providing company (or companies)including the customer activities.• The model for PSS development shows development activities occur during operations (based on a service platform), in the development projects of products and services, during the product and service development process, business/product planning and strategy formulation.• The characteristics of services involve the customer in the co-creation of value – the role of marketing, production and design in manufacturing firms should be prepared for increased user-orientation activities during the development process. 68
  69. 69. PSS approaches as an integrated businessstrategies are a set of strategies (i.e.business strategy, product strategy, servicestrategy) coordinated internally in anorganisation but also externally withcustomers, suppliers and other partners.• The expansion of competencies required to offer and deliver PSS solutions – how should the partnerships with external companies be integrated.• The development and providing activities within a company should be aligned with their customers’ activities.• The integration of products and services – the development of the total range of products and services that are offered should be coordinated. 69
  70. 70. Can the value of Does the potential Can the value of the actors’ utility of the product the product’s life activities be match the utility be increased increased and/or derived from actors’ and/or made more made more activities? resource efficient? resource efficient? Actor Product Activity Life Phase Chains Systems Value Are there any proposition Are there any opportunities for opportunities for actors along the actors along the actors’ activity product’s life chain? chain? Are the perceived benefits greater than the sacrifices for all actors? Actor NetworkHow the four dimensions of PSS concepts should be integrated and coherent
  71. 71. How the three dimensions of PSS concepts should be integrated and coherent VALUE RELATIONSHIPS Actor Value relations Network between actors How are the actors related throughout the product’s life How are the actors related through their activities? Value delivery Value created Valuethrough activities proposition Actor Product Activity Life Phase Chains Systems ACTIVITIES How well is the product and product life suited to the activities they become part of?
  72. 72. How case studies contributed to framework Business Strategy Actor network Portfolio Management Case study B: Business/ Steelcase Product planning Partner Development Projects Company Partner Product Product development Company development Customer Company Customer Case study C: Vitsœ Product life cycle and customer activity and Case study D: Knowledge Management knowledge management RiverSimple Operations Partner operations Case study E: SCA Company operations Hygiene Products Customer activities 72
  73. 73. Morphology of service-oriented strategiesSTRATEGIC VARIATIONS OF CHARACTERISTICSCHARACTERISTICS Resource Minimise Minimise use of Increase Prolong Close material ... efficiency consumption of product utility of product loop strategy product product utility Responsibility or Installation Use Maintenance Repair Upgrade Reclaim Disposal ... management of product life Support or Design Operation Finance Training Support Monitoring Optimisation Consulting ... management of customer activityPSS DIMENSIONSPSS DIMENSIONSPSS DIMENSIONSPSS DIMENSIONS Partner or Suppliers Distributors Customers Customer’s Customer’s ... collaborate with suppliers customers actor (end-users) Availability of Always available for the Available at the customer Available at certain times ... offering customer when needed (serial use) or places Degree of Core benefit alone Multiple benefits Multiple benefits ... integration aggregated integrated Revenue Transfer of Value based Value based Value of the Value of Value of the ... mechanism ownership on per use on unit management of taking result of use consumed activities responsibility (performance (outsourcing) of the use based) 73
  74. 74. Suggestions for future work• An Engineering Design approach to service design. The systematic and methodological approach to design that is well established in Engineering Design research has yet to embrace the design of services.• Collaboration with customers and users in PSS development. Customers and users represent valuable resources that can be actively employed in the development and delivery of PSS• Capturing and managing knowledge in PSS development.• Verification of PSS design methods and development processes in manufacturing firms.• Management of customer consumption. Efficiency and sufficiency. 74
  75. 75. Perspectives• Systematic design approaches well established for products in manufacturing firms• Systematic design approaches exist for services, although not well adopted or coordinated with product development in manufacturing firms• PSS design should build upon existing methods and competencies in manufacturing companies• PSS as a design object • Conceptual elements of PSS • Product life • Customer activity • Actor Network• PSS as integrated strategies • Coordinated strategies • Operations • Information and knowledge management • Development process and projects • Business planning • Partnerships 75
  76. 76. PerspectivesPSS design• New business paradigm opposes the existing operational business logic.• Cultural change from “offering a service to support a product” to “designing a service and the product that supports it”• Multiple development tasks - what are the integration points of business, product and service development?• How to harvest and feedback product life data/information/ knowledge to designers?• What are the organisational implications of PSS design?• Potential for more sustainable business. 76

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