The interplay of product modularity, service types, and servitization depth on firm performance: a moderated mediation model

Abstract

The servitization literature has explored the role that product modularity plays in supporting service design and delivery. Importantly, product modularity has the potential to aid manufacturers in providing customised solutions on a larger scale, thereby strengthening firm performance. However, despite the prospective benefits of product modularity, manufacturers also need considerable servitization depth, which comprises service orientation, resources, and delivery systems, to provide services in a cost-effective manner. Taking this into account, the study both theoretically articulates and empirically tests relationships among product modularity, servitization depth, service types, and firm performance, employing a moderated mediation model. Using survey data collected from 204 manufacturers in the UK and German, the findings indicate that product modularity exerts a positive influence on firm performance, with servitization depth acting as a mediating factor. The mediation effect of servitization depth on the correlation between product modularity and firm performance was found to fluctuate based on the service types offered by the manufacturer. This study adds to the existing literature on servitization and the role of product modularity and servitization depth in achieving superior firm performance.

Keywords:

• Servitization
• servitization depth
• firm performance
• product modularity
• service types

SDG 9:

• Industry, innovation and infrastructure

SDG 12:

• Responsible consumption and production

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The authors are grateful for the support of the Engineering and Physical Science Research Council through the Digitally Enhanced Advanced Services NetworkPlus funded by grant ref EP/R044937/1. Finally, the authors would like to express their sincere gratitude to the editor and anonymous PPC referees.

Notes on contributors

Marin Jovanovic

Marin Jovanovic is an Associate Professor in the Department of Operations Management at Copenhagen Business School and a Visiting Scholar at Luleå University of Technology. He received a Ph.D. degree in Industrial Economics and Management from KTH Royal Institute of Technology and a Ph.D. degree (cum laude) in Industrial Management from Universidad Politécnica de Madrid. His research has been published in academic journals such as Organisation Science, Journal of Product Innovation Management, R&D Management, International Journal of Operations & Production Management, Technovation, International Journal of Production Economics, Journal of Business Research, and Industrial Marketing Management, among others. His research interests include digital transformation in the manufacturing, maritime, and healthcare sectors; platform ecosystems in the business-to-business context; and artificial intelligence.

Oscar F. Bustinza

Oscar F. Bustinza is a Professor of Management at the University of Granada. His work aims to analyse the drivers of a firm’s boundary choices, demand chain management, and service innovation based on data-driven analysis. Prof. Bustinza’s research has been published in the Journal of Supply Chain Management, the International Journal of Operations & Production Management, the Journal of Business Research, the International Journal of Production Economics, Supply Chain Management: An International Journal, and the British Journal of Management, among other outlets. Prof. Bustinza was the Principal Investigator for Service Innovation in MAKERS, an H2020 project with a budget of over €1 million that supported an EU-wide network of researchers.

Phil Davies

Phil Davies is a Senior Lecturer in Operations Management at the University of Bristol Business School. His current research interests include supply chain resilience, delivery system design, and the circular economy. He is interested in additive manufacturing and responsive systems for supply chain resilience. For delivery system design, he focuses on modular service design and delivery, as well as the design and delivery of advanced services (i.e. servitization). He employs a variety of empirical methods in his research, with a particular expertise in qualitative analysis.

Glenn Parry

Glenn Parry is Professor of Digital Transformation and Head of the Department of Digital Economy, Entrepreneurship and Innovation at Surrey Business School, University of Surrey. His work is characterised by an approach of partnering with organisations to develop creative solutions to challenges. He focuses on supply chain, operations management, and business models. He is CoDirector of DECaDE: Centre for the Decentralised Digital Economy, representing £4M of UKRI/EPSRC investment plus over £6M of industrial contribution and Co-Investigator on the £1M EPSRC Responsive Additive Manufacture to Overcome Natural and Attack-based disruption (RAMONA) project, examining supply chain resilience. Glenn is a regular editor and reviewer for leading journals andhas published over 80 papers.