Improving Usage Metrics for Pay-per-Use Pricing with IoT Technology and Machine Learning

Abstract

Overview: Servitization has attracted significant attention from the manufacturing industry for its potential to provide competitive advantage. Advanced services require alternative pricing models, such as pay-per-usage (PPU), but many support goods fail to produce countable output units, leaving few choices for billing metrics. However, this article proposes an improved set of usage metrics based on Internet of Things (IoT) technology and machine learning. These metrics capture value-in-use and allow for more accurate assessment of the depreciation, providing benefits to both the manufacturer and the customer and supporting the extension of PPU models to a wider range of industrial support goods and product-service systems.

Keywords: :

• Servitization
• Product-service systems
• Internet of Things
• Machine learning
• Metrics

Additional information

Notes on contributors

Timon B. Heinis

Timon B. Heinis is a research associate and PhD candidate in the department of product development and engineering design at ETH Zurich. He holds a Master’s degree in mechanical engineering with a specialization in mechatronics and product development. He does design research for Internet of Things applications and tries to foster the application of new technologies in industry. [email protected]

Christoph L. Loy

Christoph L. Loy is a postgraduate student in management, technology, and economics at ETH Zurich visiting the department of product development and engineering design at ETH Zurich for his Master’s thesis. His research is focused on how new technologies enable advanced services. He holds a Bachelor’s degree in mechanical engineering. [email protected]

Mirko Meboldt

Mirko Meboldt is a professor of product development and engineering design at ETH Zurich. He started his industrial career at Hilti AG, Liechtenstein, where he was responsible for global technology and product development processes. He is interested in human-centered product development and regards the connection of research and education as key to excellence in training. His main research focuses on the development of new products in the field of mechanical engineering, biomedical applications, and associated technologies. He holds an MSc and a PhD in mechanical engineering from University of Karlsruhe (KIT), Germany. [email protected]