Abstract no 020-0134
A lean perspective on servitization of manufacturing
Dept of Industrial Management and
Economics, Division of Operations
Management, Chalmers University of
SE-412 96 Göteborg, Sweden
Phone: +46 31 772 12 17
Dept. of Industrial Engineering and
Management, School of Engineering
P.O. Box 1026
SE-551 11 Jönköping, Sweden
Phone: +46 36 10 16 34
POMS 22nd Annual Conference, Reno, Nevada, USA, Apr 29 to May 2, 2011 Track title: Quality, Processes and JIT
Servitization of manufacturing is a fairly recent approach addressed in literature. The term is recognized as the process of creating value by integrating products with services. Servitization is supposed to contribute to a sustainable society through its potential to support dematerialization, i.e. reduction of materials used in production and consumption. Key aspects of lean are resource efficiency and customer-orientation. Though lean production has gained a high degree of attention, few studies have addressed the potential relationships between lean and servitization. Servitization is however not only relevant from a sustainability perspective, but can be regarded as “the next step” to create user value. This paper aims at providing a better understanding of the relationships between lean and servitization through an analysis of literature where the lean and servitization approaches are compared and contrasted. The underlying assumption is that a lean approach might support a manufacturing organization’s transition towards a servitization organization.
Keywords: Servitization, Product-service systems, Lean, Sustainability
Servitization has been around for many years, trying to combine products and service into attractive packages (Tukker and Tischner, 2006). Though different definitions appear in the literature such as product-service systems (PSS), functional products, or integrated solutions (e.g. Mont, 2004; Windahl and Lakemond, 2006; Baines et al, 2009a; Baines et al, 2009b; Sakao et al, 2009), the concept refers to combinations of products and services. This combination of product and service enables the provider to deliver extra value to the customers thus competing by more than merely cost (Porter and Ketels, 2003). Servitization can provide improvements in revenue and profit margins, a closer customer relationship as well as better understanding of customer needs and requirements (Neely, 2007). Servitization makes, through the integration of products and services, the offer more complex. As a consequence, the customer may be more depending on the supplier
and tends not to switch to a competing supplier unless the delivery is extremely poorly provided. Companies that have done this transition towards servitization over the years are e.g. IBM, going from a very high hardware focus to business solutions, and SKF, who sells not only bearings but the whole technical solution including service and maintenance.
Given the situation that servitization has attracted increasing attention among scholars and industry, surprisingly little attention is devoted to how it relates to manufacturing strategy. One exception is presented by Baines et al (2009a) who, based on a literature study combined with a case study, outline a framework in which operations strategy is linked to servitization. However, this framework is rather generic and thus does not address specific production philosophies. Therefore, this paper sets out to investigate links between the Lean production philosophy and servitization. More precisely, by taking the starting point in manufacturing decision criteria elaborated from Hayes and Wheelwright (1984), an analysis of the links is presented.
The paper is stuctured as follows. First, the method uses is introduced and then we briefly describe the...
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