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Framework for Manufacturing Servitization in Virtual Enterprise Environment and Ecosystem
Information Control Problems in Manufacturing Proceedigs of theOttawa, 15th IFAC Symposium on May 11-13, 2015. Canada Proceedigs the 15th IFAC Symposium on Information of Control Problems in Manufacturing Available online at www.sciencedirect.com Information Control Problems in Manufacturing May 11-13, 2015. Ottawa, Canada May 11-13, 2015. Ottawa, Canada
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Framework for Manufacturing IFAC-PapersOnLine 48-3 (2015) 2244–2249 Servitization Framework for Manufacturing in Virtual Enterprise EnvironmentServitization and Ecosystem Framework for Manufacturing Servitization in Virtual Enterprise Environment and Ecosystem in Virtual Enterprise Environment and Ecosystem *David CHEN and **Sergio CUSMEROLI
*David CHEN and **Sergio CUSMEROLI * IMS, University of Bordeaux *David CHEN and **Sergio CUSMEROLI * 351 Cours de la liberation, 33405 Talence, France, (e-mail: [email protected]) IMS, University of Bordeaux * **TXT Frigia, 27 -IMS, 20126 Milano, Italy (e-mail: [email protected]) [email protected]) University of Bordeaux 351e-solutions, Cours de laVia liberation, 33405 Talence, France, (e-mail: 351 Cours de la liberation, 33405 Talence, France, (e-mail: [email protected]) **TXT e-solutions, Via Frigia, 27 - 20126 Milano, Italy (e-mail: [email protected]) **TXT e-solutions, Via Frigia, 27 - 20126 Milano, Italy (e-mail: [email protected]) Abstract: Manufacturing servitization is considered in Europe as one of the important developments in the years toManufacturing come to allowservitization European industries improving its competitiveness in the market. This paper Abstract: is considered in Europe as one of the important developments in presents a framework to support manufacturing companies accessing and determining its strategy and Abstract: Manufacturing servitization is considered in Europe as one of the important developments in the years to come to allow European industries improving its competitiveness in the market. This paper objective in a manufacturing servitization project. The framework is elaborated within the frame of a FP7 the years to come to allow European industries improving its competitiveness in the market. This paper presents a framework to support manufacturing companies accessing and determining its strategy and Europeanain Integrated Project ‘MSEE’. Basic concepts notions relating thewithin servitization willofbea first presents framework to support manufacturing companies accessing andto determining strategy and objective a manufacturing servitization project. Theand framework is elaborated theits frame FP7 presented. Then various dimensions that constitute the framework will be detailed. The three dimensional objective in a manufacturing servitization project. The is elaborated within the frame of a FP7 European Integrated Project ‘MSEE’. Basic concepts and notions relating to the servitization will be first frameworkIntegrated will various be presented and examples to illustrate the userelating of be thedetailed. will be European Project ‘MSEE’. Basic concepts notions toframework the servitization willoutlined. be first presented. Then dimensions that constitute theand framework will The three dimensional 1 . Conclusions are given in the end of the paper presented. Then various dimensions that constitute the framework will be detailed. The three dimensional framework will be presented and examples to illustrate the use of the framework will be outlined. 1 to illustrate the use of the framework will be outlined. framework will be presented examples . Conclusions are given in theFederation endand of the © 2015, IFAC (International ofpaper Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Keywords: Service, Framework, Architecture, Conclusions are given in the end of the paper1.Reference Model, Servitization. Keywords: Service, Framework, Architecture, Reference Model, Servitization. Keywords: Service, Framework, Architecture, Reference Model, Servitization. The framework for manufacturing servitization presented in 1. INTRODUCTION this is thefor result of a research work performed in the The paper framework manufacturing servitization presented in 1. INTRODUCTION European MSEE Project (Manufacturing SErvice Ecosystem) framework for manufacturing servitization presented in Developing service 1. industry has gained much attention in all The INTRODUCTION this paper is the result of a research work performed in the (MSEE, 2011). The project aims to create a new Virtual developed countries. Manufacturing service provided around this paper is the result of a research work performed in the European MSEE Project (Manufacturing SErvice Ecosystem) Developing service industry has gained much attention in all Factory Models, where orientation and MSEE The Project (Manufacturing SErvice Ecosystem) tangible products aManufacturing particular of much service proposed Developing serviceis industry has type gained attention in by all European (MSEE, Industrial 2011). project aims toservice create a new Virtual developed countries. service provided around collaborative innovation will support a new renaissance of (MSEE, 2011). The project aims to create a new Virtual companies to improve the competiveness of their products in developed countries. Manufacturing service provided around tangible products is a particular type of service proposed by Factory Industrial Models, where service orientation and Europe in the global manufacturing context. Factory Industrial Models, where service orientation and the market. It generally considered that European tangible products is a particular type of service proposed by companies to improve the competiveness of their products in collaborative innovation will support a new renaissance of innovation will support a new renaissance of manufacturing will progressively migrate from companies to improve the competiveness of their products in collaborative Europe in the global manufacturing context. the market. Itenterprise is generally considered that European The main reason that motivated this work is the lack of a Europe in the global manufacturing context. traditional product-centric business to product-based servicethe market. It is generally considered that European manufacturing enterprise will progressively migrate from framework that identifies at high abstraction level all possible oriented virtual enterprise and (MSEE, 2011). manufacturing willecosystems progressively migrate from The main reason that motivated this work is the lack of a traditional product-centric business to product-based servicemanufacturing servitization situations where isa the company cana The main reason that motivated this work lack of traditional product-centric business to product-based service- framework that identifies at high abstraction level all possible oriented virtual enterprise and 2011). find its place. The purpose of this framework is therefore to that identifies at high abstraction level all possible Manufacturing servitization isecosystems a long and(MSEE, complex process framework manufacturing servitization situations where a company can oriented virtual enterprise and ecosystems (MSEE, 2011). provide such a tool that helps companies identifying their manufacturing servitization situations where a company can that needs to be carefully accessed, prepared and planned. In Manufacturing servitization is a long and complex process find its place. The purpose of this framework is therefore to migration paths from traditional product-centric find its place. of this framework is therefore to particular, be necessary, a company pursuits Manufacturing is a for long and complex process provide such aThe toolpurpose that helps companies identifying their that needs it to would beservitization carefully accessed, prepared andthat planned. In possible enterprises to service-oriented virtual enterprises and provide such a tool that helps companies identifying their in a servitization project, to know clearly before to start that needs to be carefully accessed, prepared and planned. In particular, it would be necessary, for a company that pursuits possible migration paths from traditional product-centric The to defineenterprises and delimit and the possible migration paths behind from is traditional product-centric where it is it(current position) where to go (target particular, would project, be necessary, for aclearly company thatposition) pursuits enterprises to rationale service-oriented virtual in a servitization toandknow before to start ecosystems. domain of manufacturing servititization. so that strengths, weaknesses and needed investments can be enterprises to service-oriented virtual enterprises and in a servitization project, to know clearly before to start ecosystems. The rationale behind is to define and delimit the where it is (current position) and where to go (target position) The rationaleservititization. behind is to define and delimit the identified. is also necessaryand forwhere aneeded company to know all the where is It (current position) to investments go (target position) domain of manufacturing so thatitstrengths, weaknesses and can be ecosystems. The framework has been tested with several use cases inside steps, strategies to consider in toa know servitisation so that options strengths, weaknesses investments can be domain of manufacturing servititization. identified. It is and also necessary and for aneeded company all the MSEE project. It has been shown that the framework is (Chen et al., identified. It 2014). is and also strategies necessary for a company all the The framework has been tested with several use cases inside steps, options to consider in toa know servitisation useful for stakeholders/actors in ause manufacturing The framework has been testedinvolved with several cases inside steps, options and strategies to consider in a servitisation MSEE project. It has been shown that the framework is (Chen et al., 2014). project to discuss and visualize, the As-Is and MSEE project. It has been shown thatinthe framework is The state-of-the-art performed in MSEE project (MSEE, servitization useful for stakeholders/actors involved a manufacturing (Chen et al., 2014). To-Be positions of the project as well as possible alternatives. useful for stakeholders/actors involved in a manufacturing 2011) showed that manufacturing servitization domain is not servitization project to discuss and visualize, the As-Is and The state-of-the-art performed in MSEE project (MSEE, servitization project discussasand visualize, the As-Is and explicitly well that defined. Although in many concepts, models The state-of-the-art performed MSEE project (MSEE, To-Be positions of thetoproject well as possible 2011) showed manufacturing servitization domain is and not The paper is organized as follows. Section 2 givesalternatives. some basic To-Be positions of the project as well as possible methods have been developed since years (Baines et al., 2011) showed that manufacturing servitization domain is not explicitly well defined. Although many concepts, models and definitions and concepts. Section 3 presents the alternatives. dimensions 2009) (Gebauer, 2008)developed (Oliva et since al., 2012), most of them are The paper is organized as follows. Section 2 gives some basic explicitly well defined. Although many concepts, models methods have been years (Baines et and al., of framework. Caseas examples be given in section 4 to Thethepaper isand organized follows. Section 2 gives some basic definitions concepts. Sectionwill 3 presents the dimensions partial and fragmented approaches focusing on some aspects. methods have been developed since years (Baines et al., 2009) (Gebauer, 2008) (Oliva et al., 2012), most of them are illustrate the use of the framework in companies. Section 5 definitions and concepts. Section 3 presents the dimensions An explicitly structured universe of2012), discourse allowing 2009) (Gebauer, 2008) approaches (Oliva et al.,focusing most of them area of the framework. Case examples will be given in section 4 to partial and fragmented on some aspects. presents some discussions on a possible standardization work of the framework. Case examples will be given in section 4 to company allapproaches possible servitization partial andvisualizing fragmented focusing on some aspects.a illustrate the use of the framework in companies. Section 5 An explicitly structured universemanufacturing of discourse allowing and pointsthe outuse theoffuture perspectiveinto companies. further develop some illustrate the framework Section 5 situations and defining servitization is still missing. a presents some discussions on a possible standardization work An explicitly structured universemanufacturing of target discourse allowing company visualizing allitspossible servitization related works. Conclusions will be given in section 6. presents some discussions on a possible standardization work and points out the future perspective to further develop some company manufacturing servitization situations visualizing and definingallitspossible servitization target is still missing. and points out Conclusions the future perspective to further develop related works. will be given in section 6. some situations and defining its servitization target is still missing. related works. Conclusions will be given in section 6. 1
Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the project. 1 1 Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the project. Copyright 2318 project. © 2015 IFAC 2405-8963 © 2015, IFAC (International Federation of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Copyright 2015 responsibility IFAC 2318Control. Peer review©under of International Federation of Automatic Copyright © 2015 IFAC 2318 10.1016/j.ifacol.2015.06.422
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3.1 Dimension ‘Extended product’
2. BASIC CONCEPTS AND DEFINITIONS Generally speaking, a service can be seen as a provider/client interaction that creates and captures value (IBM). A manufacturing service is defined as an optimal combination of products and services to generate more income and better satisfy customers. Servitization is a migration process wherein product companies embrace a service orientation and / or develop more and better services, with the aim to offer total client solutions.
This dimension aims at defining the steps of evolution from a simple physical product to virtual intangible service. This process from traditional manufactured product to extended product & service is better described in Thoben (2001). Figure 2 illustrates this migration process from tangible product to intangible services around product and finally service as product. It characteristics our view clearly focuses on extending a formerly tangible product to intangible ones.
As stated previously, the proposed framework is to be used by a company at a first stage of a manufacturing servitization project to define its development strategy and journey. How to identify the dimensions (axes) of the framework among various possible dimensions that may exist? The answer is related to the objective of a manufacturing servitization that is the development of services to support manufactured product and innovations. Consequently the rationale here is to define those dimensions that allow a company explicitly positioning its development around the three concepts: product, service and innovation. In other words, one must precise: (a) what product (or extended product) to develop; (b) what type of service to provide; (c) in which context to develop service innovation. This leads to the identification of the three main dimensions at high level of abstraction: (1) Extended Product dimension; (2) Service type (also called servitization) dimension; (3) Service innovation dimension. Rather than to redefine those concepts from sketch, it is proposed to take existing approaches and concepts largely published (Baines et al., 2009) (Gebauer, 2008) (Oliva et al., 2012) and many others, as well as a very detailed study of the state-of-the-art performed under MSEE project presented in (MSEE, 2011).
The dimension ‘Extended product’ concept is best explained in (Thoben et al., 2001). An extended product is seen as an integrated offer of a physical product “extended” by services aiming at the provision of a customer oriented solution (figure 1 (Thoben et al., 2001)). The Extended Product concept can be illustrated in a model consisting of three layers, the kernel as a representation of the core functionalities of a product (core product or product in a narrow sense), the middle layer representing the overall product (packaging) and the outer shell describing the intangible parts of the offer (services) (Thoben et al., 2001).
Tangible Product
Product and supporting Services
Product and differentiating Services
Product+ Service
Product as a Service
Product2 Service
Fig. 2. Extended Product dimension Take the airplane engine manufacturing as an example. Traditionally company manufactures engine (this is the tangible product at the starting point). Then company provides some supporting services such as maintenance for example (selling engines + maintenance); this is step 2. Engine manufacturer may also provide some other services which are not directly related to the physical product (Product + differentiating services). For example the credit to a customer with a low interest rate to buy the products. Finally at highest level, company will not sell any more physical product but only service (service as product): selling flying hours (immaterial good): this is step 4. 3.2 Dimension ‘Servitization’ The servitization dimension concepts are based on the work of Service Typology by Variety and Contact Intensity done by (Fähnrich et al., 2007). They differentiate services with the help of the two dimensions “variety” and “contact intensity” of services as shown figure 3.
Fig. 1 Extended Product concept (Thoben et al. 2001) 3. MAIN DIMENSIONS OF THE FRAMEWORK The framework for manufacturing servitization is constituted by three dimensions: Extended Product dimension, Service Innovation dimension and Servitization dimension. The framework defines in total sixty-four possible servitization situations (intersections of the three dimensions).
Fig 3. Service Typology by Variety and Contact Intensity - “Customer-focused services” such as training are coined by a high contact intensity between service provider and customer, however, they are poor in variety.
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- “Knowledge-focused services” as consulting are also very contact intensive, yet their complexity or variety is much higher. - “Flexibility-focused services” also called “Portfoliooriented”, for example the repair of a machine, are coined by a high variety (e. g. variety of problems to be solved by repair services), and are rather low with regard to contact intensity. - Process-focused services such as transportation do not have a lot of varieties and are not very contact intensive (Fähnrich et al., 2007) (MSEE D14.1, 2012). 3.3 Dimension ‘Service Innovation’ The dimension ‘Service Innovation’ aims at identifying basic types of manufacturing value creation organization from single traditional simple enterprises to more complex innovation ecosystems. Four steps of evolution have been defined as shown figure 4. Step 1 corresponds to an initial case (simple traditional manufacturing company). Step 2 is a supply chain which can be seen as a system of product manufacturer, raw material and components suppliers as well as customers, which transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. Step 3 is a value network that is a set of organizations and/or individuals that interact with each other to create values that benefit the entire group. Step 4 is an innovation ecosystem considered as a complex structure formed by the interaction of the participating community within an environment. The community consists of industry companies, start-ups, universities and research centers, collaboration institutions, technical and business services. The environment is core markets where the community coexists and the adjacent markets from which know-how is shared.
service innovation consultant company (M=Service as product, E=Innovation ecosystem, S=knowledge oriented). Not all enterprises need to reach the highest servitization situation. Each enterprise should identified its strengths and weakness and define its own appropriate servitization strategy and objective. This framework provides an added value to the state-of-theart in service R&D domain, as follows: - It categorizes and structures existing fragmented concerns and issues into one consistent framework - It explicitly define the domain (3D space) of manufacturing servitization for a better understanding of service problems - It allows company to visualize all possible servitization options and to define the target of its servitization project
Fig. 5. Framework for Manufacturing Servitisation 4. INDUSTRY CASE STUDY EXAMPLES This sections presents four case examples to illustrate the use of the proposed framework in enterprises. 4.1 Household electrical appliance case (INDESIT) INDESIT is one of the leading European manufacturing and distributors of domestic appliances (e.g. washing machines, dryers, dishwashers, fridges, freezers, cookers, hoods, ovens and hobs). It has a traditional product-oriented organization and processes are usually evaluated according to product indicators. In reality the level of servitization of the company is rather low, as it is limited to selling the physical product and only few basic services are offered in a traditional way (e.g. warranty, technical support, service call centre etc.).
Fig. 4. Service Innovation from single company to ecosystem 3.4 Framework for manufacturing servitization Putting together the three dimensions presented in the above sections, the resulting framework for servitization is shown figure 5 (Chen et al., 2014). The intersection of the three axes identifies a given situation for a company (from a business point of view). For example the initial case (M=Product only, E=Single enterprise, S=Process oriented) corresponds to a traditional product manufacturing firm with only defined product shipping and delivery process. On the other side, the most evolved situation of servitization is for example a
The company wishes to move towards more services in order to better sell the product and gain competitiveness in the market. The company has already implemented after sale service to maintain and repair their washing machines. In the MSEE project, INDESIT has defined a new product + service idea called Carefree Washing Service; it mainly consists in offering a new service to the consumers comprising both an advanced machine and additional services, such as monitoring the washing machine, monitoring the users’ behaviours and product use, providing ad-hoc recommended actions and best practices, offering
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customized commercial proposals, and providing predictive maintenance actions. In particular, advices and proposals are tailored on the effective users’ needs and behaviours instead on statistical data or indirect information. The final scope is providing a personalized service supporting the users specifically to improve product awareness and achieved performances (Peruzzini, 2014). In other words IINDESIT desires to develop more differentiating services e.g. to add some sensors to the washing machines so that users of those machines can be alerted if they don’t use the machine correctly, be advised on how to save detergents and be informed on new product/service and so on (MSEE D14.7, 2014). These initial (Red) and target (bleu) servitization situations can be identified in the framework as shown in figure 6.
Service%innovation%strategy%(pre@MSEE)% M = Manufacturing Extended Products IV Service is the Product. Product is a Service Platform III Service differentiates the Product
- Product+Service sales
I Product
I Single II Supply chain Enterprise
IV Innovation Ecosystem
III Value Network
E = Ecosystem Collaborative Innovation
maintenance contract. Furthermore, the new idea not only added some services to the traditional product, but also implied a change of the current infrastructure and ecosystem, which were strongly product-centered and limited to internal actors. Contrariwise, the Carefree Washing Service requires a more complex infrastructure and the cooperation with some external partners for service development and delivery (Peruzzini, 2014a, 2014b). 4.2 Shirt manufacturer case (BIVOLINO) Bivolino, founded in 1954, is a Belgian clothing manufacturer, specialized in customized shirts. In 1969, Bivolino introduced a new ergonomic measurement system, allowing each shirt to be individually fitted to the body. In 1981, Bivolino became the first shirt label to take steps towards computerised production, which automatically produces the pattern making gradations (Byvoet et al., 2014). The enterprise has evolved starting from the manufacturing of shirts on demand (the customer) to the manufacturing in mass production with storage of shirts and externalization of the manufacturing in low-cost countries. Now the Enterprise is coming back to the manufacturing of shirts on demand using the possibilities of the computerization of the design and manufacturing process to reduce the delivery time and about all to eliminate the storage. By now, and using this technology, Bivolino was producing 900.000 shirts a year and employing 270 people (Byvoet et al., 2014).
Service is used to increase product selling
II Service added to the Product
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I Process Oriented
II Portfolio Oriented III Customer Oriented
IV Knowledge Oriented
S = Service Driven Engineering
Fig. 6. As-Is & To-Be servitization positions of INDESIT At the beginning of the project, INDESIT presented a low servitization level (level 2 of the Extended Product dimension) since its lifecycle was oriented to products rather than to services; services was limited to warranty, technical support and online documentation. The goal is moving towards a higher level of servitization (level 3), which corresponds to the provision of more structured and integrated services to enrich and differentiate the product (Peruzzini, 2014).
The AS IS situation is to manufacture shirts for M&S, knowing that the customer of M&S use the company’s configurator (under the label M&S) and the shirts are manufactured by a sub-contractor under contract to the studied company. For each usage of the configurator System, M&S pays to the company in addition the service (MSEE D14.7, 2014). This initial situation is indicated in figure 7. So, the actual level of servitization at the ‘Extended Product’ dimension is already at level 2 (mass customized shirts) and 3 (shirt as a service): Concerning product+service both supporting and differentiating. Bivolino in 3D Space
As a result of the servitization, INDESIT transforms its simple portfolio/customer based after-sale services to knowledge based customer-oriented proactive service (online monitoring and diagnosis with best practice advising and customized commercial offers). On the other hand it extends its current single enterprise and supply chain to a wider ecosystem environment. For this purpose, INDESIT created an ad-hoc Virtual Manufacturing Enterprise (VME) by the involvement of internal business units (i.e. R&D, Service, Marketing, IT) and external stakeholders such as end-users and hardware or software suppliers. The new idea has been called “Carefree Washing Service” because the users do not need to care about additional actions (e.g. maintenance, machine control) but they can just wash their clothes being sure that the machine is working in an optimal way. The Carefree Washing Service allows also easily differentiating the product itself by program downloading, customized accessories or personalized
M = Extended Product
UC2: Manufacturing Service
IV Service is the Product. Product is a Service Platform
UC1: Configurable Configurator UC3: Shirt as a Service (beyond MSEE)
III Service differentiates the Product
SotA: Mass-Customized Shirt E = Service Innovation
II Supply chain
I Single Enterprise
III Value Network
II Service added to the Product I Product Only
SotA II Portfolio-oriented
All Use Cases
IV Innovation Ecosystem
SotA CUSTOMERS
CUSTOMERS
Use Case 2 Use Case 1 & beyond
I Process Oriented
III Customer-oriented
IV Knowledgeoriented
S = Servitisation
Fig. 7. Servitization positions of BIVOLINO (Hirsch, 2014) More recently the company decides to move forward to the servitization. The idea of the new service appears: why not to produce the Cut File for the own production of M&S using a
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customized configurator? In such situation M&S can produce the shirts in its own factories. In addition, new business opportunities can be created through the development of Product2Service use cases (level 4 of extended product dimension). The corresponding new Business Model for Bivolino to sell Software Services for made-to-measure (MTM)- made-toorder (MTO) Clothing (Configurator Customizer) to eretailers ready to use customized on-line platforms and frontends for MTM shirts and blouses. A configurable 3Ddatabase (Configurator Customizer) allows designing collections according to the customer’s needs. The revenues come from royalties of sold products by the customer (Byvoet et al., 2014). Concerning the Servitization dimension (S), Bivolino has already moved from ‘Process-oriented’ manufacturing and shipping services (SotA in the figure 7) to Customer oriented service and will remain at this level of servitization for the UC2 (Case 2 indicated in the Extended Product dimension).
As overview of the servitization position, the TP Vision is located on 3rd servitization level (Extended Product dimension) and has already created an initial ecosystem (Service Innovation dimension) that supports its servitization strategy as shown in figure 8. On the other hand, in more detail, TP Vision is offering services for both consumer and businesses. The B2C services are offered via the TP Vision SmartTV proposition and via complementary services on mobile phones as shown in figure 8 (see Customer-oriented service in Servitization dimension). 4.4 Machine maintenance service case (IBARMIA) IBARMIA is a family owned machine tool manufacturer company situated in Spain, which provides specific solutions with high added value. This customer orientation of IBARMIA has evolved from its origin 60 years ago. One of the important markets is China where IBARMIA has sold in recent years important number of machines. Extended'Products'
As for Service Innovation dimension, Bivolino has evolved 6 MSEE Testsimple Cases Supply Chain to Value Network and Innovation from Ecosystem as shown in figure 7. It is to note that for different 6.3 services, An Electronics Consumer Goods Manufacturing Ecosystem a company can operate in differentService collaborative environments (UC1 in Ecosystem; UC2 in Value Network). Alexios Pagkozidis
IV Service is the Product. Product is a Service Platform III Service differentiates the Product
TP Vision, Prins Bernhardplein 200, 1097 JB Amsterdam, Netherlands
4.3 Television receiver manufacturer case (TP VISION) ([email protected])
II Service added to the Product
Abstract
'
TP Vision is a European TV manufacturer. The company is marketing Philips branded TV sets in Europe, Russia, the Middle East, Brazil, Argentina, Uruguay, Paraguay and selected countries in Asia-Pacific. The current focus of the company is the expansion of its servitization capabilities for its Smart TV Platform (Pagkozidis, 2014).
In this chapter, TP Vision, is demonstrating how a TV manufacturer is expanding its’ servitization capabilities by employing MSEE assets. The demonstration is focused on the development of a pilot service use of MSEE assets in order to launch the Smart Messaging and Notification service and its’ evolution through Social TV and Philips Ambilight TV app. In this chapter, we present both strategic and implementation aspects of the work during MSEE. From strategic point of view, the idea behind the servitization pilot was to reuse same technology to create new value to the customers by employing MSEE business model innovation methodologies and strategic positioning in the ecosystem. Next the chapter comprehends the MSEE application and the measurement of benefits related to the use of these assets. Finally, at the end of the chapter, the application of the MSEE and lessons learned are discussed.
6.3.1
Intelligent'Preven3ve' Maintenance'
IV Innovation Ecosystem
III Value Network
I Single II Enterprise Supply chain
Service'Innova3on'
Introduction
Cura3ve'Maintenance'
I Product
I Process Oriented
II Flexibility Oriented
III Customer Oriented
IV Knowledge Oriented
Servi3sa3on'
TP Vision’s objective is to launch the Smart Messaging and TP Vision is a European TV manufacturer. The company is marketing Philips branded TV sets in Fig. 9. Servitization positions of IBARMIA Notification service and its’ evolution Social TVcountries and in Europe, Russia, the Middle East, Brazil, Argentina, Uruguay,through Paraguay and selected Asia-Pacific. The current focus of the company expansion of its servitization capabilities Philips Ambilight TV app.is the The Smart Messaging and for its Smart TV Platform. Thus, TP Vision constantly seeks and develops solutions that can integrate More recently IBARMIA developed a Manufacturing Service Notification service aims to provide the users of the TP processes which will satisfy the increased demand for service bundling of traditional TV products. Ecosystem (MSE) focused on Machine-Tools Maintenance Vision’s SmartTV notification and messaging features. The MSEE contribution towards this direction is the supplying of TP Vision with the The necessary tools and methodologies in order to implement successful servitization of products. In the bellow service vision was to provide to different Content Service (Beobide et al., 2014). The Intelligent Maintenance Service paragraphs we will present the results of pilot use of MSEE assets in order to launch the Smart Mes- implemented in the machines produced by IBARMIA aims at theservice capability to message theirTVusers while they are sagingProviders and Notification and its’ evolution through Social and Philips Ambilight TV app. Smart monitoring and breakdown prevention. The service watching TV shows (Pagkozidis, 2014). As overview of the servitization position, the TP Vision is located on 3rd servitization level and has provides with monitoring of the machine tool status, already created an initial ecosystem that supports its servitization strategy (Figure 75). detecting precisely the source of any alarm message or any malfunction, prevent any problem before it happens in order to avoid having a huge impact on the productivity. It involves the development of a new solution based on the BeltzBox device. This device will be connected to Ibarmia’s machines, reading and monitoring key variables, and on top of this, different IT tools will be in charge of automatically triggering maintenance operations when necessary. Alarms in the machine-tools gather associated info that can help Ibarmia technicians to better identify the cause of the problem and fix the problem in less time. This means less cost, both for the customer and for IBARMIA (Beobide et al., 2014).
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Figure 75 position – Servitization of TP Vision Fig. 8. Servitization of position TP Vision (Pagkozidis, 2014)
As shown in figure 9, this servitization project allows IBARMIA moving from a traditional curative maintenance (Extended Product dimension level 2) to Intelligent
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preventive maintenace (Extended Product dimension level 4). As a result, IBARMIA also shifts from a Process-oriented service to a more active customer-oriented service. To meet this challenge, IBARMIA also expended from a supply chain based organisation to an innovative ecosystem involving not only research centers but also local industry partners in China to provide additional required functions/activities such as telecommunication, repairing, transport, training etc. 5. DISCUSSION There are few standards in manufacturing servitization. As a starting point in a servitization project, a standard framework as proposed in the paper would help companies to better identify possible target servitisation level to reach, be aware of its current situation and all possible choices and options. Not all enterprises need to reach the highest servitisation level: this will depend on the business objective and the strategy of each company. Potential standardisation of the framework might aim to: - identifying and defining relevant concepts and vocabularies related to manufacturing servitisation, - categorizing and structuring those concepts, issues and concerns for a better clarity and rigor for use in industries, - facilitating the communication between actors and stakeholders in a servitisation project - favouring the development of models, methods and tools under a standard framework for industry adoption. Future perspective relating to the development of associated approaches can be considered as follows: - Elaborate a questionnaire to help collecting information in a company in order to identify the AS IS servitisation level and define the TO BE one. - For each servitization situation (intersection of the three axis), identify a set of models, methods and tools that can be used to support the service development at that level - Elaborate a maturity model using the framework to access the maturity of existing servitization level and define actions to implement to move to a higher servitization maturity. 6. CONCLUSIONS This framework has categorized and structured some existing relevant concepts and knowledge on manufacturing servitisation (Extended Product, Service Typology, Service Innovation organization). The added value of the framework is a better organisation of dispersed and fragmented knowledge in one unique and consistent structure. From end users point of view, the framework can help them better visualizing and accessing the servitization positions and possible alternatives in their servitisation project. Consequently there is a good potential to develop a standard on the basis of the proposed framework. REFERENCES Baines, T.S. et al., 2009. The servitization of manufacturing: A review of literature and reflection on future challenges. Journal of Manufacturing Technology Management, 20(5), pp.547–567.
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Beobide, J., Jimenez, I., Frías, I., Loitxate, M. (2014), A Machine Tool Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) VerlagMainz, 2014, ISBN 978-3-95886-003-2. Byvoet, M., Hirsch, M., and Winkler M. (2014), A Garments Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Chen, D. and Gusmeroli, S. (2014), Framework for Manufacturing Servitization Potentials for standardization, In Workshop of IESA’2014, Albi, France, March 24th-25th, 2014. Fähnrich, K.; Meiren, T. (2007). Service Engineering: State of the Art and Future Trends. In Advances in Services Innovations, pp.3-16. Gebauer, H., 2008. Identifying service strategies in product manufacturing companies by exploring environment– strategy configurations. Industrial Marketing Management, 37, pp.278 – 291. MSEE (2011), “Manufacturing SErvice Ecosystem ", Annex I - "Description of Work", MSEE consortium, 2011-0429. MSEE D14.1 (2012), Integrated Service Life Cycle Model, MSEE Integrated Project deliverable D14.1, Owner: Mike Freitag (Fraunhofer IAO), October 24, 2012. MSEE D14.7 (2014), SP1 Methodology: description and results of application, MSEE Integrated Project deliverable D14.7, Owner: Yves Ducq (UB), June 6, 2014. Oliva, R., Gebauer, H. & Brann, J.M., 2012. Separate or Integrate ? Assessing the impact of separation between product and service business on service performance in product manufacturing firms. Journal of Business-toBusiness Marketing, 19(4), pp.1–32. Thoben, K.-D., Jagdev, H., Eschenbächer, J. (2001) Extended Products: evolving traditional product concepts. In Proceedings of the 7th International Conference on Concurrent Enterprising, Bremen, Germany, June 2001. Hirsch, M. (2014), The Bivolino Use Case, IEEE Technology Management Council (ITMC) and ICE 2013, The Hague, 25.06.2013. Pagkozidis, A. (2014), An Electronics Consumer Goods Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Peruzzini, M. (2014a), A White Goods Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Peruzzini, M. (2014b), The INDESIT case: service innovation in white goods industry, MSEE conference in conjunction to 20th ICE conference IEEE TMC Europe Conference, Bergamo, 23rd-254th June 2014
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Framework for Manufacturing IFAC-PapersOnLine 48-3 (2015) 2244–2249 Servitization Framework for Manufacturing in Virtual Enterprise EnvironmentServitization and Ecosystem Framework for Manufacturing Servitization in Virtual Enterprise Environment and Ecosystem in Virtual Enterprise Environment and Ecosystem *David CHEN and **Sergio CUSMEROLI
*David CHEN and **Sergio CUSMEROLI * IMS, University of Bordeaux *David CHEN and **Sergio CUSMEROLI * 351 Cours de la liberation, 33405 Talence, France, (e-mail: [email protected]) IMS, University of Bordeaux * **TXT Frigia, 27 -IMS, 20126 Milano, Italy (e-mail: [email protected]) [email protected]) University of Bordeaux 351e-solutions, Cours de laVia liberation, 33405 Talence, France, (e-mail: 351 Cours de la liberation, 33405 Talence, France, (e-mail: [email protected]) **TXT e-solutions, Via Frigia, 27 - 20126 Milano, Italy (e-mail: [email protected]) **TXT e-solutions, Via Frigia, 27 - 20126 Milano, Italy (e-mail: [email protected]) Abstract: Manufacturing servitization is considered in Europe as one of the important developments in the years toManufacturing come to allowservitization European industries improving its competitiveness in the market. This paper Abstract: is considered in Europe as one of the important developments in presents a framework to support manufacturing companies accessing and determining its strategy and Abstract: Manufacturing servitization is considered in Europe as one of the important developments in the years to come to allow European industries improving its competitiveness in the market. This paper objective in a manufacturing servitization project. The framework is elaborated within the frame of a FP7 the years to come to allow European industries improving its competitiveness in the market. This paper presents a framework to support manufacturing companies accessing and determining its strategy and Europeanain Integrated Project ‘MSEE’. Basic concepts notions relating thewithin servitization willofbea first presents framework to support manufacturing companies accessing andto determining strategy and objective a manufacturing servitization project. Theand framework is elaborated theits frame FP7 presented. Then various dimensions that constitute the framework will be detailed. The three dimensional objective in a manufacturing servitization project. The is elaborated within the frame of a FP7 European Integrated Project ‘MSEE’. Basic concepts and notions relating to the servitization will be first frameworkIntegrated will various be presented and examples to illustrate the userelating of be thedetailed. will be European Project ‘MSEE’. Basic concepts notions toframework the servitization willoutlined. be first presented. Then dimensions that constitute theand framework will The three dimensional 1 . Conclusions are given in the end of the paper presented. Then various dimensions that constitute the framework will be detailed. The three dimensional framework will be presented and examples to illustrate the use of the framework will be outlined. 1 to illustrate the use of the framework will be outlined. framework will be presented examples . Conclusions are given in theFederation endand of the © 2015, IFAC (International ofpaper Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Keywords: Service, Framework, Architecture, Conclusions are given in the end of the paper1.Reference Model, Servitization. Keywords: Service, Framework, Architecture, Reference Model, Servitization. Keywords: Service, Framework, Architecture, Reference Model, Servitization. The framework for manufacturing servitization presented in 1. INTRODUCTION this is thefor result of a research work performed in the The paper framework manufacturing servitization presented in 1. INTRODUCTION European MSEE Project (Manufacturing SErvice Ecosystem) framework for manufacturing servitization presented in Developing service 1. industry has gained much attention in all The INTRODUCTION this paper is the result of a research work performed in the (MSEE, 2011). The project aims to create a new Virtual developed countries. Manufacturing service provided around this paper is the result of a research work performed in the European MSEE Project (Manufacturing SErvice Ecosystem) Developing service industry has gained much attention in all Factory Models, where orientation and MSEE The Project (Manufacturing SErvice Ecosystem) tangible products aManufacturing particular of much service proposed Developing serviceis industry has type gained attention in by all European (MSEE, Industrial 2011). project aims toservice create a new Virtual developed countries. service provided around collaborative innovation will support a new renaissance of (MSEE, 2011). The project aims to create a new Virtual companies to improve the competiveness of their products in developed countries. Manufacturing service provided around tangible products is a particular type of service proposed by Factory Industrial Models, where service orientation and Europe in the global manufacturing context. Factory Industrial Models, where service orientation and the market. It generally considered that European tangible products is a particular type of service proposed by companies to improve the competiveness of their products in collaborative innovation will support a new renaissance of innovation will support a new renaissance of manufacturing will progressively migrate from companies to improve the competiveness of their products in collaborative Europe in the global manufacturing context. the market. Itenterprise is generally considered that European The main reason that motivated this work is the lack of a Europe in the global manufacturing context. traditional product-centric business to product-based servicethe market. It is generally considered that European manufacturing enterprise will progressively migrate from framework that identifies at high abstraction level all possible oriented virtual enterprise and (MSEE, 2011). manufacturing willecosystems progressively migrate from The main reason that motivated this work is the lack of a traditional product-centric business to product-based servicemanufacturing servitization situations where isa the company cana The main reason that motivated this work lack of traditional product-centric business to product-based service- framework that identifies at high abstraction level all possible oriented virtual enterprise and 2011). find its place. The purpose of this framework is therefore to that identifies at high abstraction level all possible Manufacturing servitization isecosystems a long and(MSEE, complex process framework manufacturing servitization situations where a company can oriented virtual enterprise and ecosystems (MSEE, 2011). provide such a tool that helps companies identifying their manufacturing servitization situations where a company can that needs to be carefully accessed, prepared and planned. In Manufacturing servitization is a long and complex process find its place. The purpose of this framework is therefore to migration paths from traditional product-centric find its place. of this framework is therefore to particular, be necessary, a company pursuits Manufacturing is a for long and complex process provide such aThe toolpurpose that helps companies identifying their that needs it to would beservitization carefully accessed, prepared andthat planned. In possible enterprises to service-oriented virtual enterprises and provide such a tool that helps companies identifying their in a servitization project, to know clearly before to start that needs to be carefully accessed, prepared and planned. In particular, it would be necessary, for a company that pursuits possible migration paths from traditional product-centric The to defineenterprises and delimit and the possible migration paths behind from is traditional product-centric where it is it(current position) where to go (target particular, would project, be necessary, for aclearly company thatposition) pursuits enterprises to rationale service-oriented virtual in a servitization toandknow before to start ecosystems. domain of manufacturing servititization. so that strengths, weaknesses and needed investments can be enterprises to service-oriented virtual enterprises and in a servitization project, to know clearly before to start ecosystems. The rationale behind is to define and delimit the where it is (current position) and where to go (target position) The rationaleservititization. behind is to define and delimit the identified. is also necessaryand forwhere aneeded company to know all the where is It (current position) to investments go (target position) domain of manufacturing so thatitstrengths, weaknesses and can be ecosystems. The framework has been tested with several use cases inside steps, strategies to consider in toa know servitisation so that options strengths, weaknesses investments can be domain of manufacturing servititization. identified. It is and also necessary and for aneeded company all the MSEE project. It has been shown that the framework is (Chen et al., identified. It 2014). is and also strategies necessary for a company all the The framework has been tested with several use cases inside steps, options to consider in toa know servitisation useful for stakeholders/actors in ause manufacturing The framework has been testedinvolved with several cases inside steps, options and strategies to consider in a servitisation MSEE project. It has been shown that the framework is (Chen et al., 2014). project to discuss and visualize, the As-Is and MSEE project. It has been shown thatinthe framework is The state-of-the-art performed in MSEE project (MSEE, servitization useful for stakeholders/actors involved a manufacturing (Chen et al., 2014). To-Be positions of the project as well as possible alternatives. useful for stakeholders/actors involved in a manufacturing 2011) showed that manufacturing servitization domain is not servitization project to discuss and visualize, the As-Is and The state-of-the-art performed in MSEE project (MSEE, servitization project discussasand visualize, the As-Is and explicitly well that defined. Although in many concepts, models The state-of-the-art performed MSEE project (MSEE, To-Be positions of thetoproject well as possible 2011) showed manufacturing servitization domain is and not The paper is organized as follows. Section 2 givesalternatives. some basic To-Be positions of the project as well as possible methods have been developed since years (Baines et al., 2011) showed that manufacturing servitization domain is not explicitly well defined. Although many concepts, models and definitions and concepts. Section 3 presents the alternatives. dimensions 2009) (Gebauer, 2008)developed (Oliva et since al., 2012), most of them are The paper is organized as follows. Section 2 gives some basic explicitly well defined. Although many concepts, models methods have been years (Baines et and al., of framework. Caseas examples be given in section 4 to Thethepaper isand organized follows. Section 2 gives some basic definitions concepts. Sectionwill 3 presents the dimensions partial and fragmented approaches focusing on some aspects. methods have been developed since years (Baines et al., 2009) (Gebauer, 2008) (Oliva et al., 2012), most of them are illustrate the use of the framework in companies. Section 5 definitions and concepts. Section 3 presents the dimensions An explicitly structured universe of2012), discourse allowing 2009) (Gebauer, 2008) approaches (Oliva et al.,focusing most of them area of the framework. Case examples will be given in section 4 to partial and fragmented on some aspects. presents some discussions on a possible standardization work of the framework. Case examples will be given in section 4 to company allapproaches possible servitization partial andvisualizing fragmented focusing on some aspects.a illustrate the use of the framework in companies. Section 5 An explicitly structured universemanufacturing of discourse allowing and pointsthe outuse theoffuture perspectiveinto companies. further develop some illustrate the framework Section 5 situations and defining servitization is still missing. a presents some discussions on a possible standardization work An explicitly structured universemanufacturing of target discourse allowing company visualizing allitspossible servitization related works. Conclusions will be given in section 6. presents some discussions on a possible standardization work and points out the future perspective to further develop some company manufacturing servitization situations visualizing and definingallitspossible servitization target is still missing. and points out Conclusions the future perspective to further develop related works. will be given in section 6. some situations and defining its servitization target is still missing. related works. Conclusions will be given in section 6. 1
Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the project. 1 1 Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the Acknowledgement: Authors of the paper thank and acknowledge all partners of MSEE project consortium for their contribution to the project. Copyright 2318 project. © 2015 IFAC 2405-8963 © 2015, IFAC (International Federation of Automatic Control) Hosting by Elsevier Ltd. All rights reserved. Copyright 2015 responsibility IFAC 2318Control. Peer review©under of International Federation of Automatic Copyright © 2015 IFAC 2318 10.1016/j.ifacol.2015.06.422
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3.1 Dimension ‘Extended product’
2. BASIC CONCEPTS AND DEFINITIONS Generally speaking, a service can be seen as a provider/client interaction that creates and captures value (IBM). A manufacturing service is defined as an optimal combination of products and services to generate more income and better satisfy customers. Servitization is a migration process wherein product companies embrace a service orientation and / or develop more and better services, with the aim to offer total client solutions.
This dimension aims at defining the steps of evolution from a simple physical product to virtual intangible service. This process from traditional manufactured product to extended product & service is better described in Thoben (2001). Figure 2 illustrates this migration process from tangible product to intangible services around product and finally service as product. It characteristics our view clearly focuses on extending a formerly tangible product to intangible ones.
As stated previously, the proposed framework is to be used by a company at a first stage of a manufacturing servitization project to define its development strategy and journey. How to identify the dimensions (axes) of the framework among various possible dimensions that may exist? The answer is related to the objective of a manufacturing servitization that is the development of services to support manufactured product and innovations. Consequently the rationale here is to define those dimensions that allow a company explicitly positioning its development around the three concepts: product, service and innovation. In other words, one must precise: (a) what product (or extended product) to develop; (b) what type of service to provide; (c) in which context to develop service innovation. This leads to the identification of the three main dimensions at high level of abstraction: (1) Extended Product dimension; (2) Service type (also called servitization) dimension; (3) Service innovation dimension. Rather than to redefine those concepts from sketch, it is proposed to take existing approaches and concepts largely published (Baines et al., 2009) (Gebauer, 2008) (Oliva et al., 2012) and many others, as well as a very detailed study of the state-of-the-art performed under MSEE project presented in (MSEE, 2011).
The dimension ‘Extended product’ concept is best explained in (Thoben et al., 2001). An extended product is seen as an integrated offer of a physical product “extended” by services aiming at the provision of a customer oriented solution (figure 1 (Thoben et al., 2001)). The Extended Product concept can be illustrated in a model consisting of three layers, the kernel as a representation of the core functionalities of a product (core product or product in a narrow sense), the middle layer representing the overall product (packaging) and the outer shell describing the intangible parts of the offer (services) (Thoben et al., 2001).
Tangible Product
Product and supporting Services
Product and differentiating Services
Product+ Service
Product as a Service
Product2 Service
Fig. 2. Extended Product dimension Take the airplane engine manufacturing as an example. Traditionally company manufactures engine (this is the tangible product at the starting point). Then company provides some supporting services such as maintenance for example (selling engines + maintenance); this is step 2. Engine manufacturer may also provide some other services which are not directly related to the physical product (Product + differentiating services). For example the credit to a customer with a low interest rate to buy the products. Finally at highest level, company will not sell any more physical product but only service (service as product): selling flying hours (immaterial good): this is step 4. 3.2 Dimension ‘Servitization’ The servitization dimension concepts are based on the work of Service Typology by Variety and Contact Intensity done by (Fähnrich et al., 2007). They differentiate services with the help of the two dimensions “variety” and “contact intensity” of services as shown figure 3.
Fig. 1 Extended Product concept (Thoben et al. 2001) 3. MAIN DIMENSIONS OF THE FRAMEWORK The framework for manufacturing servitization is constituted by three dimensions: Extended Product dimension, Service Innovation dimension and Servitization dimension. The framework defines in total sixty-four possible servitization situations (intersections of the three dimensions).
Fig 3. Service Typology by Variety and Contact Intensity - “Customer-focused services” such as training are coined by a high contact intensity between service provider and customer, however, they are poor in variety.
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- “Knowledge-focused services” as consulting are also very contact intensive, yet their complexity or variety is much higher. - “Flexibility-focused services” also called “Portfoliooriented”, for example the repair of a machine, are coined by a high variety (e. g. variety of problems to be solved by repair services), and are rather low with regard to contact intensity. - Process-focused services such as transportation do not have a lot of varieties and are not very contact intensive (Fähnrich et al., 2007) (MSEE D14.1, 2012). 3.3 Dimension ‘Service Innovation’ The dimension ‘Service Innovation’ aims at identifying basic types of manufacturing value creation organization from single traditional simple enterprises to more complex innovation ecosystems. Four steps of evolution have been defined as shown figure 4. Step 1 corresponds to an initial case (simple traditional manufacturing company). Step 2 is a supply chain which can be seen as a system of product manufacturer, raw material and components suppliers as well as customers, which transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. Step 3 is a value network that is a set of organizations and/or individuals that interact with each other to create values that benefit the entire group. Step 4 is an innovation ecosystem considered as a complex structure formed by the interaction of the participating community within an environment. The community consists of industry companies, start-ups, universities and research centers, collaboration institutions, technical and business services. The environment is core markets where the community coexists and the adjacent markets from which know-how is shared.
service innovation consultant company (M=Service as product, E=Innovation ecosystem, S=knowledge oriented). Not all enterprises need to reach the highest servitization situation. Each enterprise should identified its strengths and weakness and define its own appropriate servitization strategy and objective. This framework provides an added value to the state-of-theart in service R&D domain, as follows: - It categorizes and structures existing fragmented concerns and issues into one consistent framework - It explicitly define the domain (3D space) of manufacturing servitization for a better understanding of service problems - It allows company to visualize all possible servitization options and to define the target of its servitization project
Fig. 5. Framework for Manufacturing Servitisation 4. INDUSTRY CASE STUDY EXAMPLES This sections presents four case examples to illustrate the use of the proposed framework in enterprises. 4.1 Household electrical appliance case (INDESIT) INDESIT is one of the leading European manufacturing and distributors of domestic appliances (e.g. washing machines, dryers, dishwashers, fridges, freezers, cookers, hoods, ovens and hobs). It has a traditional product-oriented organization and processes are usually evaluated according to product indicators. In reality the level of servitization of the company is rather low, as it is limited to selling the physical product and only few basic services are offered in a traditional way (e.g. warranty, technical support, service call centre etc.).
Fig. 4. Service Innovation from single company to ecosystem 3.4 Framework for manufacturing servitization Putting together the three dimensions presented in the above sections, the resulting framework for servitization is shown figure 5 (Chen et al., 2014). The intersection of the three axes identifies a given situation for a company (from a business point of view). For example the initial case (M=Product only, E=Single enterprise, S=Process oriented) corresponds to a traditional product manufacturing firm with only defined product shipping and delivery process. On the other side, the most evolved situation of servitization is for example a
The company wishes to move towards more services in order to better sell the product and gain competitiveness in the market. The company has already implemented after sale service to maintain and repair their washing machines. In the MSEE project, INDESIT has defined a new product + service idea called Carefree Washing Service; it mainly consists in offering a new service to the consumers comprising both an advanced machine and additional services, such as monitoring the washing machine, monitoring the users’ behaviours and product use, providing ad-hoc recommended actions and best practices, offering
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customized commercial proposals, and providing predictive maintenance actions. In particular, advices and proposals are tailored on the effective users’ needs and behaviours instead on statistical data or indirect information. The final scope is providing a personalized service supporting the users specifically to improve product awareness and achieved performances (Peruzzini, 2014). In other words IINDESIT desires to develop more differentiating services e.g. to add some sensors to the washing machines so that users of those machines can be alerted if they don’t use the machine correctly, be advised on how to save detergents and be informed on new product/service and so on (MSEE D14.7, 2014). These initial (Red) and target (bleu) servitization situations can be identified in the framework as shown in figure 6.
Service%innovation%strategy%(pre@MSEE)% M = Manufacturing Extended Products IV Service is the Product. Product is a Service Platform III Service differentiates the Product
- Product+Service sales
I Product
I Single II Supply chain Enterprise
IV Innovation Ecosystem
III Value Network
E = Ecosystem Collaborative Innovation
maintenance contract. Furthermore, the new idea not only added some services to the traditional product, but also implied a change of the current infrastructure and ecosystem, which were strongly product-centered and limited to internal actors. Contrariwise, the Carefree Washing Service requires a more complex infrastructure and the cooperation with some external partners for service development and delivery (Peruzzini, 2014a, 2014b). 4.2 Shirt manufacturer case (BIVOLINO) Bivolino, founded in 1954, is a Belgian clothing manufacturer, specialized in customized shirts. In 1969, Bivolino introduced a new ergonomic measurement system, allowing each shirt to be individually fitted to the body. In 1981, Bivolino became the first shirt label to take steps towards computerised production, which automatically produces the pattern making gradations (Byvoet et al., 2014). The enterprise has evolved starting from the manufacturing of shirts on demand (the customer) to the manufacturing in mass production with storage of shirts and externalization of the manufacturing in low-cost countries. Now the Enterprise is coming back to the manufacturing of shirts on demand using the possibilities of the computerization of the design and manufacturing process to reduce the delivery time and about all to eliminate the storage. By now, and using this technology, Bivolino was producing 900.000 shirts a year and employing 270 people (Byvoet et al., 2014).
Service is used to increase product selling
II Service added to the Product
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I Process Oriented
II Portfolio Oriented III Customer Oriented
IV Knowledge Oriented
S = Service Driven Engineering
Fig. 6. As-Is & To-Be servitization positions of INDESIT At the beginning of the project, INDESIT presented a low servitization level (level 2 of the Extended Product dimension) since its lifecycle was oriented to products rather than to services; services was limited to warranty, technical support and online documentation. The goal is moving towards a higher level of servitization (level 3), which corresponds to the provision of more structured and integrated services to enrich and differentiate the product (Peruzzini, 2014).
The AS IS situation is to manufacture shirts for M&S, knowing that the customer of M&S use the company’s configurator (under the label M&S) and the shirts are manufactured by a sub-contractor under contract to the studied company. For each usage of the configurator System, M&S pays to the company in addition the service (MSEE D14.7, 2014). This initial situation is indicated in figure 7. So, the actual level of servitization at the ‘Extended Product’ dimension is already at level 2 (mass customized shirts) and 3 (shirt as a service): Concerning product+service both supporting and differentiating. Bivolino in 3D Space
As a result of the servitization, INDESIT transforms its simple portfolio/customer based after-sale services to knowledge based customer-oriented proactive service (online monitoring and diagnosis with best practice advising and customized commercial offers). On the other hand it extends its current single enterprise and supply chain to a wider ecosystem environment. For this purpose, INDESIT created an ad-hoc Virtual Manufacturing Enterprise (VME) by the involvement of internal business units (i.e. R&D, Service, Marketing, IT) and external stakeholders such as end-users and hardware or software suppliers. The new idea has been called “Carefree Washing Service” because the users do not need to care about additional actions (e.g. maintenance, machine control) but they can just wash their clothes being sure that the machine is working in an optimal way. The Carefree Washing Service allows also easily differentiating the product itself by program downloading, customized accessories or personalized
M = Extended Product
UC2: Manufacturing Service
IV Service is the Product. Product is a Service Platform
UC1: Configurable Configurator UC3: Shirt as a Service (beyond MSEE)
III Service differentiates the Product
SotA: Mass-Customized Shirt E = Service Innovation
II Supply chain
I Single Enterprise
III Value Network
II Service added to the Product I Product Only
SotA II Portfolio-oriented
All Use Cases
IV Innovation Ecosystem
SotA CUSTOMERS
CUSTOMERS
Use Case 2 Use Case 1 & beyond
I Process Oriented
III Customer-oriented
IV Knowledgeoriented
S = Servitisation
Fig. 7. Servitization positions of BIVOLINO (Hirsch, 2014) More recently the company decides to move forward to the servitization. The idea of the new service appears: why not to produce the Cut File for the own production of M&S using a
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customized configurator? In such situation M&S can produce the shirts in its own factories. In addition, new business opportunities can be created through the development of Product2Service use cases (level 4 of extended product dimension). The corresponding new Business Model for Bivolino to sell Software Services for made-to-measure (MTM)- made-toorder (MTO) Clothing (Configurator Customizer) to eretailers ready to use customized on-line platforms and frontends for MTM shirts and blouses. A configurable 3Ddatabase (Configurator Customizer) allows designing collections according to the customer’s needs. The revenues come from royalties of sold products by the customer (Byvoet et al., 2014). Concerning the Servitization dimension (S), Bivolino has already moved from ‘Process-oriented’ manufacturing and shipping services (SotA in the figure 7) to Customer oriented service and will remain at this level of servitization for the UC2 (Case 2 indicated in the Extended Product dimension).
As overview of the servitization position, the TP Vision is located on 3rd servitization level (Extended Product dimension) and has already created an initial ecosystem (Service Innovation dimension) that supports its servitization strategy as shown in figure 8. On the other hand, in more detail, TP Vision is offering services for both consumer and businesses. The B2C services are offered via the TP Vision SmartTV proposition and via complementary services on mobile phones as shown in figure 8 (see Customer-oriented service in Servitization dimension). 4.4 Machine maintenance service case (IBARMIA) IBARMIA is a family owned machine tool manufacturer company situated in Spain, which provides specific solutions with high added value. This customer orientation of IBARMIA has evolved from its origin 60 years ago. One of the important markets is China where IBARMIA has sold in recent years important number of machines. Extended'Products'
As for Service Innovation dimension, Bivolino has evolved 6 MSEE Testsimple Cases Supply Chain to Value Network and Innovation from Ecosystem as shown in figure 7. It is to note that for different 6.3 services, An Electronics Consumer Goods Manufacturing Ecosystem a company can operate in differentService collaborative environments (UC1 in Ecosystem; UC2 in Value Network). Alexios Pagkozidis
IV Service is the Product. Product is a Service Platform III Service differentiates the Product
TP Vision, Prins Bernhardplein 200, 1097 JB Amsterdam, Netherlands
4.3 Television receiver manufacturer case (TP VISION) ([email protected])
II Service added to the Product
Abstract
'
TP Vision is a European TV manufacturer. The company is marketing Philips branded TV sets in Europe, Russia, the Middle East, Brazil, Argentina, Uruguay, Paraguay and selected countries in Asia-Pacific. The current focus of the company is the expansion of its servitization capabilities for its Smart TV Platform (Pagkozidis, 2014).
In this chapter, TP Vision, is demonstrating how a TV manufacturer is expanding its’ servitization capabilities by employing MSEE assets. The demonstration is focused on the development of a pilot service use of MSEE assets in order to launch the Smart Messaging and Notification service and its’ evolution through Social TV and Philips Ambilight TV app. In this chapter, we present both strategic and implementation aspects of the work during MSEE. From strategic point of view, the idea behind the servitization pilot was to reuse same technology to create new value to the customers by employing MSEE business model innovation methodologies and strategic positioning in the ecosystem. Next the chapter comprehends the MSEE application and the measurement of benefits related to the use of these assets. Finally, at the end of the chapter, the application of the MSEE and lessons learned are discussed.
6.3.1
Intelligent'Preven3ve' Maintenance'
IV Innovation Ecosystem
III Value Network
I Single II Enterprise Supply chain
Service'Innova3on'
Introduction
Cura3ve'Maintenance'
I Product
I Process Oriented
II Flexibility Oriented
III Customer Oriented
IV Knowledge Oriented
Servi3sa3on'
TP Vision’s objective is to launch the Smart Messaging and TP Vision is a European TV manufacturer. The company is marketing Philips branded TV sets in Fig. 9. Servitization positions of IBARMIA Notification service and its’ evolution Social TVcountries and in Europe, Russia, the Middle East, Brazil, Argentina, Uruguay,through Paraguay and selected Asia-Pacific. The current focus of the company expansion of its servitization capabilities Philips Ambilight TV app.is the The Smart Messaging and for its Smart TV Platform. Thus, TP Vision constantly seeks and develops solutions that can integrate More recently IBARMIA developed a Manufacturing Service Notification service aims to provide the users of the TP processes which will satisfy the increased demand for service bundling of traditional TV products. Ecosystem (MSE) focused on Machine-Tools Maintenance Vision’s SmartTV notification and messaging features. The MSEE contribution towards this direction is the supplying of TP Vision with the The necessary tools and methodologies in order to implement successful servitization of products. In the bellow service vision was to provide to different Content Service (Beobide et al., 2014). The Intelligent Maintenance Service paragraphs we will present the results of pilot use of MSEE assets in order to launch the Smart Mes- implemented in the machines produced by IBARMIA aims at theservice capability to message theirTVusers while they are sagingProviders and Notification and its’ evolution through Social and Philips Ambilight TV app. Smart monitoring and breakdown prevention. The service watching TV shows (Pagkozidis, 2014). As overview of the servitization position, the TP Vision is located on 3rd servitization level and has provides with monitoring of the machine tool status, already created an initial ecosystem that supports its servitization strategy (Figure 75). detecting precisely the source of any alarm message or any malfunction, prevent any problem before it happens in order to avoid having a huge impact on the productivity. It involves the development of a new solution based on the BeltzBox device. This device will be connected to Ibarmia’s machines, reading and monitoring key variables, and on top of this, different IT tools will be in charge of automatically triggering maintenance operations when necessary. Alarms in the machine-tools gather associated info that can help Ibarmia technicians to better identify the cause of the problem and fix the problem in less time. This means less cost, both for the customer and for IBARMIA (Beobide et al., 2014).
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Figure 75 position – Servitization of TP Vision Fig. 8. Servitization of position TP Vision (Pagkozidis, 2014)
As shown in figure 9, this servitization project allows IBARMIA moving from a traditional curative maintenance (Extended Product dimension level 2) to Intelligent
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preventive maintenace (Extended Product dimension level 4). As a result, IBARMIA also shifts from a Process-oriented service to a more active customer-oriented service. To meet this challenge, IBARMIA also expended from a supply chain based organisation to an innovative ecosystem involving not only research centers but also local industry partners in China to provide additional required functions/activities such as telecommunication, repairing, transport, training etc. 5. DISCUSSION There are few standards in manufacturing servitization. As a starting point in a servitization project, a standard framework as proposed in the paper would help companies to better identify possible target servitisation level to reach, be aware of its current situation and all possible choices and options. Not all enterprises need to reach the highest servitisation level: this will depend on the business objective and the strategy of each company. Potential standardisation of the framework might aim to: - identifying and defining relevant concepts and vocabularies related to manufacturing servitisation, - categorizing and structuring those concepts, issues and concerns for a better clarity and rigor for use in industries, - facilitating the communication between actors and stakeholders in a servitisation project - favouring the development of models, methods and tools under a standard framework for industry adoption. Future perspective relating to the development of associated approaches can be considered as follows: - Elaborate a questionnaire to help collecting information in a company in order to identify the AS IS servitisation level and define the TO BE one. - For each servitization situation (intersection of the three axis), identify a set of models, methods and tools that can be used to support the service development at that level - Elaborate a maturity model using the framework to access the maturity of existing servitization level and define actions to implement to move to a higher servitization maturity. 6. CONCLUSIONS This framework has categorized and structured some existing relevant concepts and knowledge on manufacturing servitisation (Extended Product, Service Typology, Service Innovation organization). The added value of the framework is a better organisation of dispersed and fragmented knowledge in one unique and consistent structure. From end users point of view, the framework can help them better visualizing and accessing the servitization positions and possible alternatives in their servitisation project. Consequently there is a good potential to develop a standard on the basis of the proposed framework. REFERENCES Baines, T.S. et al., 2009. The servitization of manufacturing: A review of literature and reflection on future challenges. Journal of Manufacturing Technology Management, 20(5), pp.547–567.
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Beobide, J., Jimenez, I., Frías, I., Loitxate, M. (2014), A Machine Tool Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) VerlagMainz, 2014, ISBN 978-3-95886-003-2. Byvoet, M., Hirsch, M., and Winkler M. (2014), A Garments Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Chen, D. and Gusmeroli, S. (2014), Framework for Manufacturing Servitization Potentials for standardization, In Workshop of IESA’2014, Albi, France, March 24th-25th, 2014. Fähnrich, K.; Meiren, T. (2007). Service Engineering: State of the Art and Future Trends. In Advances in Services Innovations, pp.3-16. Gebauer, H., 2008. Identifying service strategies in product manufacturing companies by exploring environment– strategy configurations. Industrial Marketing Management, 37, pp.278 – 291. MSEE (2011), “Manufacturing SErvice Ecosystem ", Annex I - "Description of Work", MSEE consortium, 2011-0429. MSEE D14.1 (2012), Integrated Service Life Cycle Model, MSEE Integrated Project deliverable D14.1, Owner: Mike Freitag (Fraunhofer IAO), October 24, 2012. MSEE D14.7 (2014), SP1 Methodology: description and results of application, MSEE Integrated Project deliverable D14.7, Owner: Yves Ducq (UB), June 6, 2014. Oliva, R., Gebauer, H. & Brann, J.M., 2012. Separate or Integrate ? Assessing the impact of separation between product and service business on service performance in product manufacturing firms. Journal of Business-toBusiness Marketing, 19(4), pp.1–32. Thoben, K.-D., Jagdev, H., Eschenbächer, J. (2001) Extended Products: evolving traditional product concepts. In Proceedings of the 7th International Conference on Concurrent Enterprising, Bremen, Germany, June 2001. Hirsch, M. (2014), The Bivolino Use Case, IEEE Technology Management Council (ITMC) and ICE 2013, The Hague, 25.06.2013. Pagkozidis, A. (2014), An Electronics Consumer Goods Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Peruzzini, M. (2014a), A White Goods Manufacturing Service Ecosystem, In ‘Manufacturing Service Ecosystem’ (Eds. S. Wiesner, C. Guglielmina, S. Gusmeroli, G. Doumeingts) Verlag-Mainz, 2014, ISBN 978-3-95886-003-2. Peruzzini, M. (2014b), The INDESIT case: service innovation in white goods industry, MSEE conference in conjunction to 20th ICE conference IEEE TMC Europe Conference, Bergamo, 23rd-254th June 2014
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