Development of product-service systems: challenges and opportunities for the manufacturing firm

Abstract

Product-Service Systems (PSS) raise interesting opportunities for the manufacturing firm as the function is provided to meet customer needs rather than the physical hardware itself. PSS offerings based on the manufacturer's knowledge about the product and the technology can increase its status as problem-solver and solution-provider, reduce life cycle cost and produce high revenue. However, PSS including, e.g. hardware, services, software and electronics are efficient and competitive only if developed for the specific purpose with features such as easy to maintain, upgradeable, with built-in sensors for collecting in-use and service data, and easy to use. This changes the requirements on the manufacturing firm's development process. Looking back historically, the last century gives an interesting changing landscape of the rationale for the product-development methods used in manufacturing firms. This article, based on the previous research in the product- and service-development fields, and on empirical results from studies at several manufacturing firms, looks into how the engineering work is affected by PSS and how it can be enhanced for PSS, especially in terms of required competencies and other capabilities. It results in recommendations for a new, functional product-development process.

Keywords:

• product service systems
• functional product development
• integrated solutions
• engineering methods

Acknowledgements

The authors thank all participating companies for their support. This research was mainly financed by the Swedish Governmental Agency for Innovation Systems (VINNOVA) and the Swedish Foundation for Strategic Research (SSF).