Servitization and operations management: a service-dominant logic approach
Smith, Laura; Maull, Roger S.; Ng, Irene C. L.
Date: 2014
Journal
International Journal of Operations and Production Management
Publisher
Emerald
Publisher DOI
Related links
Abstract
Purpose – The purpose of this paper is to provide further insight into operations management of the
product-service (P-S) transition, known as servitization, and the resulting product service system (PSS)
offerings. In exploring the P-S transition, this paper adopts a service-dominant (S-D) logic view of
value creation, using it as ...
Purpose – The purpose of this paper is to provide further insight into operations management of the
product-service (P-S) transition, known as servitization, and the resulting product service system (PSS)
offerings. In exploring the P-S transition, this paper adopts a service-dominant (S-D) logic view of
value creation, using it as a lens through which to explore value propositions of the P-S transition and
their operations design.
Design/methodology/approach – This paper presents an in-depth case study of an original
equipment manufacturer of durable capital equipment who, over the last five years, has expanded its
offerings to include use- and result-orientated PSS. The research design uses a multi-method approach;
employing 28 in-depth qualitative interviews with customers and employees and analysis of texts,
documents and secondary data including five years of enterprise resource planning (ERP), call centre
and contract data.
Findings – The paper identifies ten generic P-S attributes that are abstracted into four nested value
propositions: asset value proposition; recovery value proposition; availability value proposition; and
outcome value proposition. In examining the operations design for delivery of these value
propositions, it is found that the role and importance of contextual variety increases as the
organisation moves through the value propositions. Interdependencies amongst the value propositions
and differences in operational design for each value proposition are also found.
Research limitations/implications – The paper investigates PSS through a S-D logic mindset.
First, the paper considers value propositions of PSS not according to “product” or “service” but in
terms of how resources (both material and human) are optimally designed to co-create customer value.
Second, a value co-creation system of nested value propositions is illustrated. In so doing, the findings
have a number of implications for literature on both PSS and S-D logic. In addition, the research adds
to the PSS literature through the identification and consideration of the concept of contextual use
variety.
Practical implications – The paper demonstrates the complexity of the transition from product to
service. Specifically, service cannot be seen as a bolt-on extra to their product offering; complexity
caused by interactions and changes to the core offering require a systems perspective and
consideration of both firm and customer skills and resources.
Originality/value – This paper extends existing literature on the P-S transition and its implications
for operations management. Notably, it takes an S-D logic perspective of value creation and in so doing
highlights the importance and role of contextual use variety in the P-S transition. It also provides
further empirical evidence that the P-S transition cannot be treated as discrete stages but is
evolutionary and requires a complex systems perspective
Management
Faculty of Environment, Science and Economy
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