Abstract
AbstractAlthough servitization as a transformation process is being recognized by an increasing number of firms as a source of competitive advantage, the role of economic evaluations in service strategy formulation has so far attracted limited attention – and predominantly from the manufacturer perspective. This paper assesses how the analysis of costs and benefits of Product-Service Systems (PSS) as servitized offerings influences the formulation of service strategies in the shipping industry. The study examines both the manufacturer and customer perspectives using two case studies from the shipping sector. Life Cycle Costing (LCC) was used as a tool to assess the associated costs and benefits of two proposed PSS. Based on the results of the LCC, the drivers and barriers of the actual transformation processes were explored through workshops and interviews served to map the perspectives of both manufacturers and customers. For both case studies the LCC revealed that, while the PSS resulted in a decrease i...
Highlights
In recent years, servitization has attracted considerable attention from both academia and industry
5.2.1 Results from life cycle costing The goal of the analysis is to evaluate the effect of performance agreements on the boiler consumption from a life cycle perspective
In this article we aimed to answer the following question: RQ: How does the analysis of costs and benefits of Product-Service Systems influences the formulation of service strategies in the shipping industry?
Summary
Servitization has attracted considerable attention from both academia and industry. Service strategies are important for PSS, as they help guide the servitization process, so that it can result in value in use to the customer (Baines et al, 2007; Roy & Cheruvu, 2009) and improved corporate competitiveness for the manufacturer (Belvedere, Grando, & Bielli, 2013; Miller, Hope, Eisenstat, Foote, & Galbraith, 2002; Shepherd & Ahmed, 2000). Economic metrics such as costs and revenues are fundamentally connected to value. While the economic benefits and implications of PSS have been explored—most notably in (Lindahl, Sundin, & Sakao, 2014; Sawhney, 2004)—it is not clear how the analysis of costs and benefits influences the formulation of service strategies
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