The document discusses how a company that sells microwave ovens could add service elements to their business model to combat falling profits from increased competition. It describes strategies for designing product-service systems (PSS), where services are integrated into product design and ownership models. A PSS could maintain contact with customers and offer supplies, maintenance, upgrading, and disposal to deliver utilization of the product as the service. This shifts the business model from a focus on products to maximizing usage. The document suggests the microwave oven company could target a market segment by offering lease, rental, or pay-per-use models for microwaves to create new patterns of flexible usage and ownership.

1. Product/Service Orientation
Thomas J. Howard
thow@mek.dtu.dk
Main Contributions from: Tim C. McAloone, Niki Bey & Krestine Mougaard
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 created for the PROTEUS project and adapted for course
42629, Innovation and Product Development Department of Mechanical
Engineering, DTU”

2. 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
increase competition. How could you add
a service dimension to your business and
what market segment would you target?
2 Material provided by Tim C. McAloone and adapted for course 42629, 2012
Innovation and Product Development Department of Mechanical Engineering, DTU

3. Product/Service Orientation
PRODUCT USE RESULT
• Product related • Product lease • Activity management
service
• Product renting • Functional unit
• Product related
• Pay per service unit
consultancy
PRODUCT SERVICE
ORIENTATION ORIENTATION
Based on Tukker & Tischner 2006
3 Material provided by Tim C. McAloone and adapted for course 42629, 2012
Innovation and Product Development Department of Mechanical Engineering, DTU

4. Product/Service Orientation
4 Material provided by Tim C. McAloone and adapted for course 42629, 2012
Innovation and Product Development Department of Mechanical Engineering, DTU

5. 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
CYCLE
5 Material provided by Tim C. McAloone and adapted for course 42629, 2012
Innovation and Product Development Department of Mechanical Engineering, DTU

6. 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]
6 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical

7. Strategies for Service Design
7 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical

8. Designing a PSS
We need to adopt new approaches for making substantial changes:
– For the end-user:
o New patterns of usage, lifestyle, purchasing and flexibility
– For the producing company:
o Maintain contact, supply, maintenance, upgrading, disposal, and
recycling of the product
o See utilisation of the product as the delivered service
o Realise new ownership patterns such as renting, leasing, service-
contracts, etc.
o Identify new markets and greater share by re-defining core business
– For society:
o Increased product efficiency (due to the producing company having
increased liability for-, insight into- and ownership over the product)
o A closer relationship between social needs and the products that
industry supplies (due to the voice of the customer being louder and
clearer than before)
8 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical

9. 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.
9 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical

10. Questions
?
10 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical

11. Exercise
In your project teams, try to synthesise at
least 3 PSS business configurations that
for you business ideas.
Try to consider what, where, when and
how your customers would pay for your
offerings.
11 Material provided by Tim C. McAloone and adapted for course 2012
42629, Innovation and Product Development Department of Mechanical