Facilitating the transition from product-orientated to product service systems

Abstract

Many traditional manufacturing firms within the EU are increasingly challenged by companies operating in developing countries with low-cost labour bases (Yoon et al., 2012). Instead, manufacturers are encouraged to develop competitive advantage by moving up the value chain and providing knowledge intensive products and service. Companies seeking to meet customer expectations and requirements with personalised, flexible and increasingly comprehensive solutions must then convert their product strategies into Product Service Systems (PSS). Due to the inherent differences between the production of goods and services many companies struggle to integrate the two effectively (Friedli et al., 2005). In response to this, numerous models have been developed which aim to integrate product and service development processes and ultimately create a successful PSS offering. Yet these models neglect to take into consideration existing cultural barriers within companies in relation to the transition from product to PSS provision. Therefore, there is a gap in the understanding of PSS as a complete transition process. This research proposes a model and theory from which a transition process can be derived. This aims to convey the benefits of an integrated product/ service offering, create an awareness and understanding of the level of change required to implement a PSS strategy, resulting in the transition of companies from a product-orientated culture to product/ service orientated culture. The research initially examines development process models for product, service and product/ services through an extensive literature review which defines the set of requirements necessary to transition to a PSS strategy. Primary research is undertaken with eight product-orientated companies and two practicing service developers to establish the primary cultural barriers to the requirements identified. Based on this information, the ‘Transition to and Implementation of Product Service Systems’ (TIPSS) process model is developed which synthesises the fundamental components required by the PSS development models and takes into account cultural barriers which prevent the transition to a PSS. A workshop prototype is derived from the process model in order to provide participants with the fundamental skills and knowledge to initiate the cultural transition process. Companies are studied in relation to their transition development and the degree of transition change quantified using established differential indicators between Goods- and Service-orientated cultures. These indicators of cultural transition are used to validate the TIPSS Process model.