Innovative Service-Based Business Concepts for the Machine Tool Building Industry

Organised by: Cranfield UniversityDuring the last decade, machine tool building companies have been forced to put innovative offers on the market. Due to the technical features of their products and the prevailing organizational structures in this sector, especially product-service systems are a promising way of creating a unique selling point. In this paper, potential new business concepts for machine tool builders will be presented which aim at fulfilling basic customer needs like the increase in quality, flexibility, productivity and the reduction of lead times, costs and risks. For the implementation of these product-service systems, practical examples are given.Mori Seiki – The Machine Tool Compan

Exploring the journey to services

Firms are increasingly providing services to complement their product offerings. The vast majority of studies on the service journey, also known as servitization or service transition, examine the challenges and enablers of the process of change through cases studies. Investigations that provide an in-depth longitudinal analysis of the steps involved in the service journey are much rarer. Such a detailed understanding is required in order to appreciate fully how firms can leverage the enablers while overcoming the challenges of servitization. This study investigates what does a service journey look like? It analyzes in some detail the actual service journeys undertaken by three firms in the well-being, engineering and learning sectors. The paper offers four contributions. First, in the change literature, there are two dominant theories: The punctuated equilibrium model and the continuous change model. This study demonstrates that servitization follows a continuous change rather than a punctuated equilibrium. It shows that such continuous change is neither logical nor structured but much more emergent and intuitive in nature. Second, the study provides empirical evidence to support a contingency view of the dominance and sequencing of the different process models of change across the change journey. Third, this research shows the pace of service development and when the coexistence of basic, intermediate and complex services occurs. Finally, it contributes to the literature in the service field by presenting three actual service journeys and the associated seven stages of the service strategy model that organizations should consider when managing their service journeys

Design for product-service systems - a literature review

The trend towards servitization in the capital goods sector remains unbroken. While in theory and practice, the basic principles of this transition have been discussed intensively, up to now there has been a lack in engineering guidelines and design notes to comply with the newly arising requirements for the technical equipment used in PSS. The paper depicts the current state-of-the-art in the "Design for Service" area by giving a comprehensive literature review. Against the background of the transition outlined above, the need for enhancing "Design for Service" towards "Design for Product-Service Systems" is illustrated

Service-based business concepts: A typology for business-to-business markets

Manufacturing industries are increasingly applying alternative business concepts, transforming traditional buyer–supplier relationships into new exchange models of deliveries and payments. In scientific debates on this phenomenon, however, there exist neither consistent terms nor standardised characteristics. This article aims to provide a set of parameters that relate the broad variety of scientific papers in this field of research to a common framework. By applying this framework to multiple case studies, a preliminary typology of new business concepts emerges. These findings have implications for managerial decisions on adopting new business concepts. Our work also suggests future research directions

The relevance of service in European manufacturing industries

Purpose - Case study findings increasingly indicate that the implementation of service-based business concepts is becoming a global business trend. The purpose of this paper is to analyze a broad European survey to understand the extent to which service infusion has already deeply affected manufacturing industries and the factors influencing service infusion. Design/methodology/approach - Data from 3,376 companies participating in the European Manufacturing Survey were included in an evaluation of service offerings and service sales. Multivariate data analyzes were used to develop statistically relevant conclusions regarding service infusion and the factors influencing it. Findings - Whereas, the vast majority of companies surveyed offer services, the turnover generated by services was still low, and the adopted service strategies did not seem fully developed. The most significant determinant of service sales was the breadth of services offered. Other relevant explanatory factors included the characteristics of the type of products sold, whereas the position in the supply chain did not seem to affect service infusion. Research limitations/implications - Using large-scale survey data, this analysis provides a representative picture of service infusion in manufacturing industries and related causal relationships. Further qualitative research should develop interpretations of the relationships found in our quantitative analysis; as such, subsequent quantitative analyzes are necessary. Originality/value - As most previous studies on service infusion are based on case study reports, the value of this paper comes from its use of a broad empirical database. Thus, the paper supports, confirms, and generalizes previous qualitative findings

Business model innovation paths and success in the machine tool industry

Abstract Service-oriented business models are regarded as one of the main competitive priority for European machine builders willing to keep their global leadership, menaced by the growth of Asiatic competitors and by the financial crisis. Despite the efforts of the research community and of industrial companies in the direction of servitization, there is empirical evidence that only few companies successfully innovated their business model. In this paper, the results of an European case study research are reported, aimed at the understanding of business model innovation mechanisms and success in the machine tool sector. Companies resulted distributed in different clusters, each of them characterized by different business model innovation levels, strategic consciousness and achieved performance. The clusters suggest the existence of three alternative paths of business model innovation, which are described in the paper, showing specific innovation mechanisms that can be followed

Assessment of the sustainability effects of product-service systems

The concept of Product-Service Systems (PSS) as a means to realize sustainable business models is a vividly discussed topic in management literature. Most approaches to evaluate the impacts of PSS focus on the economic as well as the ecological dimension of sustainability, whereas social implications are hardly analyzed. However, a more comprehensive evaluation of potential effects of all three dimensions of sustainability is indispensable to foster the diffusion of PSS. Therefore, this article offers an integrative assessment of the sustainability impacts of PSS based on expert interviews in th B2B as well as B2C sector

Servitization as an innovation process: Identifying the needs for change

In the past, innovation efforts in industry were focused on tangible product innovations. Debating the topic of servitization has led to an expanded view of innovation. Intangible product innovations are an opportunity to complement innovation strategies. However, the practices and tools that facilitate creating tangible innovations have failed for intangible innovations. Therefore, many manufacturers hesitate to develop new services or Product Service Systems (PSS). With this background, this chapter presents a concept for managing a systematic innovation process with respect to specific challenges of intangible innovations. This managerial innovation model is based on case studies of servitizing manufacturing industries. The insights derived from actively applying industrial servitization processes were bundled into a generic procedure. The presentation of this generic procedure is organised into five sections: After an introduction, the second section provides a literature summary on service innovations in industrial firms. Then, we present the challenges of servitization processes identified in case studies and characterise the new innovation model