Manufacturing, service, and their integration: some history and theory

The purpose of this paper is to explain why the historical integration of manufacturing with service was quickly seen as advantageous in some circumstances, but not so in others.

The paper reviews the history of manufacturing companies in the USA during the last half of the nineteenth century, categorizes them, and ties them to theory.

The bundling of manufactured goods to downstream‐available services was led by companies with new products but with no great manufacturing strengths, as a way to establish barriers to entry. Companies with significant manufacturing capabilities were not as quick or as complete in their integration of manufacturing and service.

This paper shows that servitization has antecedents that go back 150 years.