Designing and providing integrated product-service systems – challenges, opportunities and solutions resulting from prescriptive approaches in two industrial companies

Abstract

Due to customer pressure and growing competition, industrial companies are increasingly moving towards providing integrated offerings of products and services (PSS). Despite this trend, literature providing a deep understanding of the challenges associated with this transition is limited, while publications discussing approaches that focus on overcoming these challenges are particularly lacking. This article is based on a multi-case study of two Swedish industrial companies undergoing the transition to designing and providing PSS. It reports on the challenges identified at the case companies as well as opportunities arising from and solutions to these challenges. Subsequent to initial research on the challenges, prescriptive approaches such as a life cycle costing method and a PSS design method were applied in the case companies over an extended time frame. On the one hand, these prescriptive approaches provided both a deeper understanding of the challenges, which include a persistent product centred mindset, a lack of adjustment to changed incentive structures and the separation of product and service design. On the other hand, they also led to effective solutions such as focusing on customer value and introducing a PSS transition facilitator for the design team. These solutions were adapted to the situations in the respective companies and they partly went beyond the prescriptive measures first introduced. Therefore, the article shows the applicability of prescriptive approaches and methods to detect, understand and alleviate the challenges of PSS design and provision. Further, the article provides broadly applicable learning for industrial companies undergoing this process.

Keywords:

• PSS
• servitisation
• design method
• implementation
• product–service integration

Acknowledgements

The authors wish to thank both case companies Levor and Navitas, which funded this research individually. Our gratitude of course belongs to the many practitioners who participated in this research through dedicating their time, sharing their knowledge and experience and allowing us to get a deep understanding for the transition to PSS in industrial companies.

Notes

1. Due to requirements of confidentiality, the authors had to ensure that both companies cannot be identified based on the information given. Therefore, aliases are used instead of actual company names, and some remarks by participants of the study were generalised to ensure anonymity. Regardless, the authors took utmost care to deliver an accurate and precise representation of the situation at Levor and Navitas as a basis for the creation of broadly applicable knowledge for academia and practice alike.