Introduction to Product/Service-System Design

Within this chapter three main topics are wrapped. First, a relatively new method for the development of Product-Service Systems (PSS) called PSS Layer Method is introduced. Second, microenergy systems are introduced as a commendable example to teach the theory of Product-Service Systems. Third, sustainability as a driver for Product-Service Systems and microenergy systems will be emphasized. All three topics are set in relation to an industrial case where the PSS layer method had been applied to a microenergy system which in this case is a solar home system. Such systems are used for energy supply in off-grid installations in rural regions, e.g., in weak infrastructures of developing countries. The reader will learn the basics of the PSS layer method, be introduced to microenergy systems and get an insight on a discussion on sustainability concerns in this case. The chapter closes with reflections on experiences, recommendations for an industrial application of the PSS layer method and an outlook.

Manufacturers are moving more and more towards the business approach of Product/Service Systems (PSS) in order to achieve greater revenue. PSS have many benefits such as achieving closer customer connection and generating increased profit from manufactured products. However, in order to achieve a PSS which is adapted for this business approach, the products and services used need to consider a life-cycle perspective. The business approach of PSS allows for the provider to control the flows of physical products, both the forward flow to the user and the reverse flow of products back to the provider. This new logic of material/product flows allows for adaptations along the product life-cycle. For example, maintenance and end-of-life strategies such as remanufacturing can become more beneficial due to the new circumstances that PSS provide the manufacturer. The aim of this chapter is to elucidate how manufacturers can develop their PSS with a life-cycle perspective. It shows the many aspects that should be considered throughout the life-cycle of both physical products and services. In addition, several considerations and theories are presented for the different stages of the PSS life-cycle. Finally, this chapter presents theory on product/service design with a life-cycle perspective, which serves as a base for the practical design considerations presented in Chapter 3 of this book.

Many manufacturers are moving more and more towards the business approach of Product/Service-Systems (PSS) in order to achieve more revenues. The business approach of PSS puts new requirements on products in comparison to traditional selling. In order to achieve a PSS adapted for this business approach, the products and services used need to consider a life-cycle perspective. Having a life-cycle perspective on products and services in the business strategy of PSS is becoming increasingly important as the strategy emerges and more companies see the benefits of controlling a larger share of the product-value chain. The objective of this chapter is to elucidate how manufacturers have worked with, or could adapt their products for, PSS. Supporting this are results from several case studies, performed at companies that manufacture household appliances, soil compactors and forklift trucks. A key factor when developing products for PSS is to design the product from a life-cycle perspective, considering all the product’s life-cycle phases, e.g., manufacturing, use, maintenance and end-of-life treatment. Several design improvements, all of which are fairly inexpensive and easy to implement, are described. Many of these improvements deal with the accessibility of parts and components during maintenance and remanufacturing operations, and several of the design improvements could reduce the need and cost for maintenance, repair and remanufacturing.

In this chapter, a systematic method to generate design concepts of integrated product-service offerings, or Product/Service-Systems (PSS), is proposed. This method uses formal PSS modelling and reasoning facilities of a service CAD tool. Such a formal modelling method and reasoning facilities are crucial to overcome the limitations of existing tools and methods to support PSS design, in reflecting research findings about the PSS concept, in representing design information, and in supporting systematic design. The method is applied to concept generation of product-service offerings in the health care service industry from the perspective of medical instrument manufacturers. Possibility and limitation of the method in finding explicit relation between service receivers (e.g., patients, instrument operators) and the manufacturers, in dealing with interrelations among the generated offerings within a concept, in presenting and understanding a concept as a whole (by designers), and in separating design tasks to improve the quality of concepts and productivity of the design process, are analyzed. This chapter is prepared not only for potential users and developers of such modelling methods and tools, but also designers of service-oriented business models in industry to organize and utilize their product-service information.

Consumer packaging has become increasingly important as a valueadding element, since packages shape the consumer's experience of the product during use, as well as accelerating the purchase decision. From a Product/Service-System (PSS) perspective, the strategic benefits of viewing packaging as a central value carrier are evident. To consumers, the product and its packaging are often perceived as closely integrated and consumers' initial impression of the quality and value of a product is sometimes determined by their judgment of the package. Therefore, the product, the package and its integrated benefits and features can be regarded as one product/package/service system. However, product developers tend to over-emphasize the value of the functional properties related to the 'core product', overlooking the differentiating benefits that might come from the integration of product and packaging innovation processes. The move towards developing integrated product/service offerings, rather than traditional artefact based products, implies that the role of packaging needs to be reconsidered in light of, e.g., total life-cycle provisions and environmentally sustainable offerings. This chapter reviews previous research on the integration between product and packaging development, and highlights some important challenges and opportunities related to improved value creation in the product/service system paradigm.

Manufacturers face new circumstances, such as servicification of consumers and seriousness of environmental problems. An effective avenue may be pursuing qualitative satisfaction rather than quantitative sufficiency. This chapter aims at proposing a design process model for services or service-oriented products based on Service Engineering, to increase the level of customer satisfaction. Then, a method for evaluating service solutions is introduced. For this purpose, Quality Function Deployment (QFD), used widely in product design, is employed. This method makes it possible to realize evaluating effects of a service on its receiver. Mathematical methods are introduced to differentiate functions and structures. Then, the proposed method is applied to evaluate a model service in order to verify its effectiveness. The results indicate that a specific function is the most important among multistage structure of the target service. Furthermore, a method for designing service activity and product concurrently and collaboratively is also proposed. Design of services and products should be integrated in order to maximize customer value, considering the mutual effects of synergy, alternative and complementarity. For this purpose, first, a fundamental unified representation scheme of human process and physical process in service delivery process is given. Second, the authors evaluate these processes with Quality Function Deployment manner. In the rest of this chapter, the authors describe a detailed process to represent unification of human processes and physical processes by applying the proposed method to an actual service case.

Services are becoming increasingly important in today’s manufacturing industry. As a result, it has become common for companies to provide a combination of services and products as an integrated offering. This chapter focuses on such business and development processes. It begins with a literature review which identifies uncertainty as a critical concept to be addressed properly in such business. Then, based on interviews with nine Swedish companies interested in the PSS offering business, it uncovers findings such as how companies lack a systematized tool to support their development process. In addition, there is a wish to have a tool for companies to address uncertainty. In response to this, and as a solution, this chapter recommends that firms utilize a simple tool addressing the uncertainty of customers’ business processes based on a model for “Process Service Channel”, so that a service provider can effectively generate business processdriven service bundles. Through a case in the printing industry, this chapter demonstrates the effectiveness of the tool. This tool has potential for value-oriented optimisation of production processes and for a strategic customisation of the customer’s business.

The concept of value visualization is concerned with the way that firms communicate and demonstrate the value of their Product-Service Systems (PSS), both internally and externally. In this chapter, a visualization strategy framework for PSS development is proposed. It is particularly tailored for industrial companies that are strategically shifting from selling products to becoming providers offering PSS. Value visualization strategies have traditionally focused on external sales activities. However, companies need to have a broader approach to visualization in all PSS development phases, as well as including different visualization techniques. Furthermore, different visualization strategies are needed for each particular development stage of the PSS. Companies need be able to make use of several different visualization strategies, depending on the actual content of the Product-Service System and its position in the development process. Whereas the product development process is rather heavy at the back, successful PSS development projects with high levels of service need to be heavy at the front (that is, they need to not only develop the system but also ensure its rollout). Examples are provided from eight market-leading companies in different industries, each of which are undertaking a strategic shift from identifying themselves as product sellers toward becoming providers offering PSS. To conclude, value visualization has become vital for winning new contracts and retaining existing ones. It is therefore a strategic resource that managers need to pay attention to, and continuously develop, in order to compete with PSS offerings.

Many manufacturers are shifting focus for different reasons from being providers of mainly physical products to providing increased services in their customer offerings. Traditionally, the focus of manufacturing companies has been more on product development than service development; this is one reason why it is important for Product/Service Systems (PSS) developers to meet others who understand this situation. This chapter describes challenges large PSS providers in Sweden are facing, and how these can be explored and discussed within a PSS company–academia network setting. It is concluded that during the three first years of network meetings, this approach has been a success. In addition, the experiences gained from participation in this network have resulted in recommendations for PSS providers and researchers thinking of starting up similar networks and/or building ones has already begun.

This chapter establishes PSS (Product/Service-Systems) approaches in the context of manufacturing firms and their existing product-oriented business. PSS can be seen as a strategy for manufacturing firms to gain competitive advantage in the market, but what market conditions and organisational factors (e.g., structure, processes, capabilities, measurement and reward systems, people and competencies and culture) support service orientation? The development of PSS is not just a task of initiating a service-oriented development project, but requires careful coordination with business units, customers and partners in business planning and strategy to reap the full benefits. Finally, a path to how manufacturers can make the change from product to service orientation is traced.

The adaptation of Product/Service-Systems (PSS) calls for new development models. On one hand this gives the manufacturing firm possibilities to redesign, upgrade and replace the discrete device that provides the performance their customers are asking for. On the other hand, this new situation has to address aspects that are normally not addressed in early product development, i.e., services. In this chapter, we elaborate on product and service development process models, as well as system models to propose a frame of reference for multiple perspectives on PSS development. These perspectives are of people, product and process. Also, this chapter puts forward implications for the development of PSS models.

In order to meet the increasingly complex needs of customers and to respond to decreasing product margins, typical product manufacturers have developed a growing interest in extending their service business. The extension of the service business requires a systematic development of innovative services. Unfortunately, in business practice it has been observed historically that manufacturing companies often fail to develop services systematically. Some customers asked for services and these desires were often fulfilled. Thus, the extension of the service business reflects a rather unstructured service innovation approach, which has not been consciously pursued. Rather than developing more formal structures to elicit ideas for new services, it is mostly performed ad hoc. Only a limited number of firms use formal approaches to service innovation and have implemented necessary determinants to success. Furthermore, the innovation of services in manufacturing companies captures two specific idiosyncrasies. First, manufacturing companies have to balance product and service innovations. Second, services can be either developed during the product development process or during the product usage. The major challenge to success in innovating services is to combine specific product-service systems with the right service strategy and way to develop service innovations.