Implications of Service-related Business Models on Product Development Processes

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Procedia CIRP 00 (2017) 000–000 Procedia CIRP 80 (2019) 756–761 www.elsevier.com/locate/procedia

26th 26th CIRP CIRP Life Life Cycle Cycle Engineering Engineering (LCE) (LCE) Conference Conference

Implications Service-related Business Implications of Service-related Business Models on 28th CIRP of Design Conference, May 2018, Nantes,Models France on Product Product Development Development Processes Processes A new methodology to analyze the functional and a,physical architecture of a a a Michael Riesener a, Christian Doellea, Manuel Ebia,*, Jonas Tittela Michael for Riesener , Christian Doelle , Manuel Ebi *,family Jonas Tittel existing products an assembly oriented product identification a aLaboratory

for Machine Tools and Production Engineering WZL at RWTH Aachen University, Campus-Boulevard 30, 52074 Aachen, Germany Laboratory for Machine Tools and Production Engineering WZL at RWTH Aachen University, Campus-Boulevard 30, 52074 Aachen, Germany

Paul Stief *, Jean-Yves Dantan, Alain Etienne, Ali Siadat

* Corresponding author. Tel.: +49-241-80-27593; fax: +49-241-80-627593. E-mail address: [email protected] * Corresponding author. Tel.: +49-241-80-27593; fax: +49-241-80-627593. E-mail address: [email protected] École Nationale Supérieure d’Arts et Métiers, Arts et Métiers ParisTech, LCFC EA 4495, 4 Rue Augustin Fresnel, Metz 57078, France

* Corresponding author. Tel.: +33 3 87 37 54 30; E-mail address: [email protected]

Abstract Abstract

Product-service systems (PSS) in machinery and plant engineering offer various convincing value propositions such as increased productivity Product-service systems (PSS) in machinery and plant engineering offer various convincing value propositions such as increased productivity and customization for industrial customers combined with environmental benefits for the overall system. Sustainability is promoted by a reduction Abstract and customization for industrial customers combined with environmental benefits for the overall system. Sustainability is promoted by a reduction of emissions and material use through services like recycling, refurbishment and retrofitting as well as a shared ownership or use model. In order of emissions and material use through services like recycling, refurbishment and retrofitting as well as a shared ownership or use model. In order implement PSS, environment, Original Equipment Manufacturers (OEM) are variety required to focus on several activities with Cycle Engineering as one Into business the trend towards more product customization is key unbroken. Due to Life this development, the need of totoday’s implement PSS, Original Equipment Manufacturers (OEM) are requiredand to focus on several key activities with Life Cycle Engineering as one of theand most important aspects. Basedsystems on the emerged results oftoancope in-depth literature analysis,and it isproduct possible to generically describe new service-related agile reconfigurable production with various products families. To design and optimize production of the most important aspects. Based on the results of an in-depth literature analysis, it is possible to generically describe new service-related businessasmodels fortocompanies in optimal the field of machinery and plant engineering that resultare from offering PSS. This dependencies systems well as choose the matches, product analysis methods needed. Indeed, mostpaper of theinvestigates known methods aim to business models for companies in the fieldproduct of machinery and plant engineering that result from offering PSS. This paper investigates dependencies and effects of these business models on the product development process by analyzing constitutive features of the business model and determining analyze a product or business one product family on the physical level. Different families, however,features may differ largely in terms of and the number and and effects of these models on the product development processproduct by analyzing constitutive of the business model determining their consequences for This the product development process. A domain and mapping matrix is used as aproduct method to detect influences offor different business nature of components. fact impedes an efficient comparison choice of appropriate combinations the production their consequences for the product development process. A domain mapping matrix is used as a methodfamily to detect influences of different business model aspects on the product development process.existing Research findings highlight the functional importance of physical a close integration ofThe product system. A new methodology is proposed to analyze products in view of their architecture. aim isand to service cluster model aspects on the product development process. Research findings highlight the importanceand of a close integration of product and service development processes. The development of services hasfortothe be optimization systemized. Companies need to develop a networking architecture to link their these products in new assembly oriented product families of existing assembly lines and the creation of future reconfigurable development processes. The development of services has to be systemized. Companies need to develop a networking architecture to link their PSS components and analyze usage data. Userthe integration into the of development is necessary in order to ensureare a comprehensive assembly systems. Based on Datum Flow Chain, physical structure the productsprocess is analyzed. Functional subassemblies identified, and PSS components and analyze usage data. User integration into the development process is necessary in order to ensure a comprehensive fulfillment of customers’ needs. The share of IT professionals has to be raised as well as interdisciplinary work and service mentality. Networks afulfillment functional of analysis is performed. hybrid functional graph (HyFPAG) is the output which depicts the customers’ needs. TheMoreover, share of ITa professionals has toand be physical raised as architecture well as interdisciplinary work and service mentality. Networks and partnerships with various stakeholders are possible approaches to face challenges resulting from an increased system complexity. similarity betweenwith product families by providing design support toto both, productionresulting system planners and product designers. An illustrative and partnerships various stakeholders are possible approaches face challenges from an increased system complexity. © 2019 of The Authors. Published Elsevierthe B.V. This is methodology. an open access article under case the CC BY-NC-ND licensefamilies of steering columns of example nail-clipper is used by to explain proposed industrial study on two product © 2019 Thea Authors. Published by Elsevier B.V. This is an open accessAn article under the CC BY-NC-ND license © 2019 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). thyssenkrupp Presta France is then carried out to give a first industrial evaluation of the proposed approach. (http://creativecommons.org/licenses/by-nc-nd/3.0/). (http://creativecommons.org/licenses/by-nc-nd/3.0/) under responsibility the scientific committee of the 26th CIRP Life Cycle Engineering (LCE) Conference. ©Peer-review 2017 The Authors. Published byof B.V. committee Peer-review under of the committee of of the the 26th 26th CIRP CIRP Life Life Cycle Cycle Engineering Engineering (LCE) (LCE) Conference. Conference. Peer-review under responsibility responsibility ofElsevier the scientific scientific Peer-review under responsibility of the scientific committee of the 28th CIRP Design Conference 2018. Keywords: Business model; product-service system; development process Keywords: Business model; product-service system; development process Keywords: Assembly; Design method; Family identification

1. Within 1. Motivation Motivation Within service-related service-related business business models models that that are are based based on on useuseoriented or result-oriented PSS, the customer pays for using the 1. Introduction of the product range and characteristics manufactured and/or oriented or result-oriented PSS, the customer pays for using the The intensity of international competition in machinery and PSS or for the specified output generated by the PSS [5]. system.output In thisgenerated context, the main challenge in The intensity of international competition in machinery and assembled PSS or for in thethis specified by the PSS [5]. plant increasing [1]. from Changing business model consequentially Dueengineering to the is fast development in the domain of modelling and aaanalysis is now not only to cope withrequires single plant engineering is increasing [1]. A A differentiation differentiation from the the Changing business model consequentially requires competition products is adjusting business Modifications communication andon ongoing trend of digitization and products, limited the product rangeprocesses or existing[6]. product families, competition based based onancost-effective cost-effective products is not not expedient expedient adjusting arelated related the business processes [6]. Modifications for high-tech companies. The connection of products and within the business process of product development to digitalization, enterprises are facing important alsothe to be able to process analyze of andproduct to compare products appear to define for high-tech manufacturing companies. The connection of products and but within business development appear to services in product-service systems (PSS) appears to be a be necessary [7], but services in machinery and plant challenges today’s market environments: a continuing product families. It can be observed that classical existing services in inproduct-service systems (PSS) appears to be a new be necessary [7], but services in machinery and plant promising approach [2]. services offer engineering are developed and without tendency reduction of product development times and product families regrouped in function clients or features. promisingtowards approach [2]. Industrial Industrial services offer differentiation differentiation engineering areareoften often developed and ofintroduced introduced without from competitors, comparatively high margins and increased adjusting the existing development process [2]. shortened product lifecycles. In addition, there is and an increasing assembly oriented productprocess families[2]. are hardly to find. from competitors, comparatively high margins increased However, adjusting the existing development customer [3]. enable Therefore, it to effects of demand customization, being at theservice-related same time in abusiness global On the product family level, productsthe differ mainly in two customerof loyalty loyalty [3]. PSS PSS enable service-related business Therefore, it is is eligible eligible to investigate investigate the effects of serviceservicemodels [2]. The spectrum ranges from an evolutionary related business models on the product development process in competition over from the world. This trend, main characteristics: (i) the number of components (ii) the models [2].with Thecompetitors spectrum all ranges an evolutionary related business models on the product developmentand process in development with a digital refinement of existing products to a machinery and plant engineering. What modifications are which is inducing development from macro to micro of components (e.g.engineering. mechanical, What electrical, electronical). development with a the digital refinement of existing products to a type machinery and plant modifications are disruptive replacement of [4]. markets, in diminished lot sizesproduct due to business augmenting Classical methodologies considering mainly single products disruptiveresults replacement of the the existing existing product business [4]. product varieties (high-volume to low-volume production) [1]. or solitary, already existing product families analyze the 2212-8271 © 2019 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license To cope with this variety as wellB.V. as This to be able structure on a physical level (components level) which 2212-8271 © 2019 Theaugmenting Authors. Published by Elsevier is an opentoaccessproduct article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). (http://creativecommons.org/licenses/by-nc-nd/3.0/). identify possible optimization potentials in the existing causes difficulties regarding Peer-review under responsibility of the scientific committee of the 26th CIRP Life Cycle Engineering (LCE) Conference. an efficient definition and Peer-review under responsibility of the scientific committee of the 26th CIRP Life Cycle Engineering Conference. production system, it is important to have a precise knowledge comparison of (LCE) different product families. Addressing this doi:10.1016/j.procir.2017.04.009 doi:10.1016/j.procir.2017.04.009

2212-8271 © 2019 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/) 2212-8271 © 2017 The Authors. Published by Elsevier B.V. Peer-review under responsibility of scientific the scientific committee theCIRP 26thDesign CIRP Conference Life Cycle 2018. Engineering (LCE) Conference. Peer-review under responsibility of the committee of the of 28th 10.1016/j.procir.2019.01.024

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necessary? Which constitutive features of the business models play a particularly decisive role? 2. Fundamentals The following sections contain key definitions and concepts within the topics of business model, PSS and the product development process. 2.1. Business model OSTERWALDER ET AL. describe a business model as “the rationale of how an organization creates, delivers, and captures value” [8]. WIRTZ defines a business model as a simplified and aggregated representation of the relevant corporate activities with the architecture of value creation as the illustration of the generation of marketable products and services [9]. GASSMANN ET AL. define four dimensions that have to be covered by a business model: value propositions, customers, value creation and financials [10]. OSTERWALDER ET AL. develop the concept of the Business Model Canvas as a tool for the description, visualization, evaluation and modification of business models. The concept is widely distributed and accepted in research as well as in industry. The Business Model Canvas covers the four main business areas: offer, infrastructure, customers and financial viability. The offer is described by the building block of value propositions. Key activities, key partners and key resources jointly specify the infrastructure for value creation. Customers are described by the building blocks of customer relationships, customer segments and channels. The financial viability of a business model is subdivided into the building blocks of cost structure and revenue streams. [8] 2.2. Product-service system The concept of product-service systems (PSS) was developed in Europe in the late 1990s [11]. GOEDKOOP ET AL. introduce the first definition of a PSS in 1999: "A productservice system (PSS) is a marketable set of products and services capable of jointly fulfilling a user's need." [12] Based on an extensive literature research, BAINES defines a PSS as an integrated product and service offering that delivers value in use [13]. TUKKER develops a common classification of PSS and distinguishes between product-oriented, use-oriented and result-oriented systems. Within a product-oriented PSS, the business model is still focused strongly on products while offering additional services at the same time. Use-oriented PSS are no longer geared to selling products. The PSS remains the property of the provider and is made available to the customer for a certain period of time. Within result-oriented PSS, customers and providers agree on a specific functional result without describing a predefined solution or product. The output of the PSS is sold rather than the PSS itself. [5] Based on the presented definitions, service-related business models in machinery and plant engineering are considered to be the entrepreneurial implementation of use-oriented and result-oriented PSS within this paper.

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2.3. Product development process Product development aims at generating functional and producible products [7]. The literature contains numerous frameworks for the product development process. These models are abstract descriptions of actions and recommendations that support a product developer. Process models are usually created in a general and theoretical form in order to fit the wide range of possible development situations. Therefore, every model has to be adapted to the specific situation. [14] Deterministic process models have distinct phases and structured workflows that are already defined at the beginning of product development. The starting point for product development is typically the planning and clarification of the development task. This step is followed by the conception phase during which requirements are concretized and ideas are detailed. A primary product concept is defined. This includes the definition of product functions as well as the product structure. Within the design phase, product elements are worked out technically and economically. At the end of the product development process there is the elaboration phase. [15] The understanding of the product development process within this paper is based on VDI 2221 and the main process phases of the development and design process according to PAHL AND BEITZ [16, 17]. 3. Related Research There are several publications about service-related business models in machinery and plant engineering. This chapter describes and evaluates relevant existing approaches. Based on empirical studies, BIEGE develops a design concept for the implementation of product adaptation strategies for service concepts for manufacturing companies of capital goods. Six recommended actions for manufacturers who are interested in adapting the design of material goods for usage in service-related business models are enumerated. [18] The author recommends the creation of a separate service organization within the company. Furthermore, the introduction of service-related business models that anticipate customer needs is recommended. Capital goods have to be constructively adapted to a service-related business model in order to increase opportunities and reduce risks. The author classifies service-related business models into use-oriented and result-oriented business models by differentiating the rights of disposal of the capital good. For both cases, reusability, a reduction of the customization level of the capital good and a design according to the qualification of the personnel employed are recommended. Customer involvement in the development processes of products and services is recommended to optimize product-related services and followed by changes in the structural organization to create a service orientation in the company. Finally, knowledge management methods and tools as well as the engagement in standardization committees and associations are suggested [18]. The recommendations of BIEGE'S approach are of a general nature and only partly refer to the development of products.

Michael Riesener et al. / Procedia CIRP 80 (2019) 756–761 Author name / Procedia CIRP 00 (2019) 000–000

Additionally, the focus is set on the indication of attention rather than on the development of concrete guidelines of action. KUNTZKY establishes a concept for the modularized development of PSS, which integrates already existing PSS into the development process and also considers a company's business model. A case-based-reasoning method is used for the development of PSS where already existing PSS form the basis for the development of new PSS. Existing PSS are not only considered as a complete solution, but are also included with regard to detailed, modularized function blocks oriented to the life cycle of a PSS. Therefore, the PSS is examined in a model of three levels. The first level provides an overview of the PSS functionality, the second level presents the subsystems and components of PSS, and the third level evaluates individual subsystems and their operating conditions of a PSS. [19] KUNTZKY'S approach considers bundles of products and services for satisfying customer needs instead of standalone products. However, the business model is only considered to be one of several PSS subsystems. Derivations from a servicerelated business model are not discussed explicitly. SCHUH ET AL. developed a generic description of servicerelated business models in machinery and plant engineering. Based on an in-depth literature review and analysis, the authors identify 39 constitutive features of service-related business models that are linked to the nine building blocks of the Business Model Canvas concept by OSTERWALDER AND PIGNEUR. Most features relate to the building blocks of value propositions and key activities. Fig. 1 illustrates these identified features. [20] Key Activities Key Partners  Implement services  Value networks  Focus on customers  Customers and  Adapt development suppliers as key process partners  Prove performance  Collect, analyze and use data  Enable connectivity  Design PSS for lifecycle Key Resources  Increase PSS  Intellectual lifetime resources  Manage information  Human resources and knowledge  Product  Manage development and stakeholders production  Consider legal resources issues  Manage risk  Conduct marketing

Value Propositions  Guarantee of performance  Increase in performance  Value proposition expansion  Solution for customer problems  Customization  Increase in quality  Eco-friendliness  ROI improvement

Cost Structure  Cost increase (R&D, software, connectivity, personnel)  Cost reduction (hardware, lifecycle, service staff, marginal costs of digital services)

Customer Relationships  Intensified customer relationships  Increased customer integration

Customer Segments  Established customer segments  Value-based segmentation

Channels  Sales and distribution network  Intensified customer communication  Increased need for customer advisory in sales  Marketing by quantifying additional customer benefits

Revenue Streams  Revenue sources (additional services, solution provision)  Stable cash flows  Data based pricing mechanism

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related business models and the product development process. Hence, the method needs to contain specific scopes of the regarded business models and development processes. Moreover, the method should be adaptable for existing business processes in machinery and plant engineering. 4. Method to evaluate implications of service-related business models on the product development process The main research question for the development of the method is: “What implications do constitutive features of service-related business models in machinery and plant engineering have on the product development process?” 4.1. Methodological approach For the analysis of the implications of service-related business models on the product development process in machinery and plant engineering, a domain mapping matrix (DMM) is used. This kind of matrix enables the determination of complex and cross-linked connections between objects from different domains. Focal points and dependencies can be determined and the intensity of a coherence can be evaluated using a value scale. This allows transparency with regard to the dependencies between the objects from different categories and a structured discussion of the facts. [14] Fig. 2 shows the structure of a DMM. Category 1

Category 2

758

Element

1.1

1.2

1.3

…

1.n

2.1

𝑖𝑖1,1

𝑖𝑖1,2

𝑖𝑖1,3

…

𝑖𝑖1,𝑛𝑛

𝑖𝑖2,1

𝑖𝑖2,2

𝑖𝑖2,3

…

𝑖𝑖2,𝑛𝑛

𝑖𝑖3,1

𝑖𝑖3,2

𝑖𝑖3,3

…

𝑖𝑖3,𝑛𝑛

2.2

2.3 … 2.m

Passive sum

…

𝑖𝑖𝑚𝑚,1

𝑚𝑚

� 𝑖𝑖𝑗𝑗,1 𝑗𝑗=1

…

𝑖𝑖𝑚𝑚,2

𝑚𝑚

� 𝑖𝑖𝑗𝑗,2 𝑗𝑗=1

…

…

𝑖𝑖𝑚𝑚,3

…

� 𝑖𝑖𝑗𝑗,3

…

𝑚𝑚

𝑗𝑗=1

…

𝑖𝑖𝑚𝑚,𝑛𝑛

𝑚𝑚

� 𝑖𝑖𝑗𝑗,𝑛𝑛

Active Sum 𝑛𝑛

� 𝑖𝑖1,𝑘𝑘

𝑘𝑘=1 𝑛𝑛

� 𝑖𝑖2,𝑘𝑘

𝑘𝑘=1 𝑛𝑛

� 𝑖𝑖3,𝑘𝑘

𝑘𝑘=1

…

𝑛𝑛

� 𝑖𝑖𝑚𝑚,𝑘𝑘

𝑘𝑘=1

𝑗𝑗=1

Fig. 2: Structure of a domain mapping matrix

Fig. 1: Features of service-related business-models

The features of SCHUH ET AL. represent a holistic and generic description of service-related business models in machinery and plant engineering. Some features, e.g. “Adapt development processes” or “Increased customer integration” indicate possible impacts on the product development process. However, the approach does not discuss effects of servicerelated business models on development processes in general. The analysis of related research illustrates the need for a method for investigating the implications of service-related business models on the development process. Existing approaches do not holistically cover the requirements targeted in this paper for finding specific dependencies between service-

The following steps are performed to apply the DMM. First, the two categories, which are to be set in relation to each other, are defined and applied as abscissa and ordinate of a matrix. Then, the elements that are relevant for the system under consideration are listed in the two categories. The relationships between the elements are enlisted. The direction of the dependency and its weighting can be entered. Finally, the matrix is analyzed by means of a cluster analysis or active and passive sums. Active sums are calculated for each row of a matrix. They are the result of summing all numerical values within the respective row. Passive sums are formed analogously for each column of a matrix. They result from the summation of all numerical values within the respective

Michael Riesener et al. / Procedia CIRP 80 (2019) 756–761 Author name / Procedia CIRP 00 (2019) 000–000

column. Definitions of active and passive sums lead to the assignment of actively influencing variables to the ordinate and passively influencing variables to the abscissa. [14] 4.2. Determination of categories and elements In this paper, the implications of service-related business models on the product development process in machinery and plant engineering are analyzed. Therefore, the two categories service-related business models and product development process are the input for the domain mapping matrix. The category service-related business models in machinery and plant engineering is assigned to the ordinate of the DMM. As introduced in previous work [20], it is generically described by 39 features, which are assigned to the nine building blocks value propositions, key activities, key partners, key resources, customer relationships, customer segments, channels, cost structure and revenue streams. These 39 features (see Fig. 1) are the elements of the first category of the DMM. The category product development process is assigned to the abscissa of the DMM. As mentioned in chapter two, several approaches form the basis for understanding of product development processes in this paper. A suitable description of the product development process, so that it can be used in the DMM, has to be developed. It contains a business model-oriented perspective on the product development process in machinery and plant engineering. On this account, requirements for an appropriate description perspective on the product development process are developed. A special focus is put on the addressees of the description and the characteristics of service-related business models in machinery and plant engineering. The addressees are managers and executives who are responsible for the introduction of a service-related business model. The fulfilment of these requirements by existing and widespread description models for the product development process has been checked and evaluated. Common description models do not offer a business model-oriented perspective on the product development process. For this reason, a new descriptive perspective has to be developed. Based on leading questions, a business model-oriented perspective can be created to describe the product development process in machinery and plant engineering. These leading questions cover aspects of the product development process that are relevant in the context of business models and typically addressed by managers: What are the goals of product development? Which resources are necessary? Which sub-processes are relevant? Which objects have to be researched and developed? Which corporate culture favors the development process? Which working methods have to be applied? What are internal and external interfaces of the product development process? The business model-oriented description of the product development process in machinery and plant engineering is the single element of the second category of the DMM. This leads to a one-dimensional use of the second category of the matrix. For this reason, the matrix is referred to in the following as domain mapping vector. The leading questions have to be considered while explaining and quantifying implications of service-related business models.

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4.3. Application of the method After the definition of the axes of the domain mapping vector the application of the method step can be conducted. For that purpose, the dependencies between the elements are determined and evaluated. A three-step scale in the integer value range from 0 to 2 is used for the evaluation of the dependencies. The value 0 is applied if no effects can be detected. Weak effects are evaluated using the value 1. Strong effects are illustrated within the vector by applying the value 2. The individual correlations are determined from the existing scientific literature as well as derived from expert discussions conducted by the authors including their expertise in industrial practice. Since there is no statistically significant data basis, the relationships are derived logically. The passive sum is derived for the analysis. Product development process Guarantee of performance

2

Increase in performance

2

Solution for customer problems

2

Implement services

2

Focus on customers

1

Prove performance

1

Collect, analyze and use data

2

Enable connectivity

2

Design PSS for lifecycle

1

Increase PSS lifetime

1

Manage information and knowledge

1

KR

Human resources

2

KP

Value networks

1

Intensified customer relationships

1

Increased customer integration

1

VP

Serivce-related business model

4

KA

CR

Passive sum VP: Value proposition KA: Key activities KR: Key resources

KP: Key partners CR: Customer relationships PSS: Product-service system

22 1: Weak effect 2. Strong effect

Fig. 3: Domain mapping vector with the results of the evaluation

Fig. 3 shows the completed domain mapping vector with the results of the evaluation. The chosen assignment results in a vector as described above. Those features that have no impact on the development process are not illustrated in Fig. 3. The explanation and interpretation of the results is formulated in the following chapter. 4.4. Explanation of interdependencies The implications of service-related business models on the product development process in machinery and plant engineering are described based on the scientific literature, expert discussions and the authors’ expertise in industrial practice. Descriptions within this chapter focus on important

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aspects of those features that directly influence the product development process. The guarantee of performance and the increase in performance within service-related business models require an integrated offer of products and services [21, 22]. This has a strong impact on the product development process. The object of development activities no longer consists of stand-alone products, but of combined PSS. A systematic development process for services has to be developed. In addition, the development processes for products and services must be integrated taking mutual interactions into account. Problem solving for the customer is one of the most important features of service-related business models. The customer describes his problem linguistically without creating a requirement specification sheet [23]. Familiar requirement specifications are thus replaced by a procedure similar to the formulation of user stories within an agile product development approach. Furthermore, integrated solutions of products and services are required [1]. The OEM has to implement services as a key activity within service-related business models. This leads to a strong focus on design guidelines such as “design for x” and “design for service” [24]. Services become significantly more important, which has to be considered by the management within their prioritization compared to other scopes of development. The identification and addressing of customer needs and benefits are especially important in service-related business models and include the alignment of the OEM's activities with the respective customer [25]. Customers have a certain influence on the future orientation of the development activities of the provider of a service-related business model. Service-related business models in machinery and plant engineering are based on highly complex PSS [26]. The product development can support the definition and implementation of suitable performance measurement criteria due to the pronounced PSS knowledge. Activities within the collection, analysis and usage of data are key activities of service-related business models and facilitate further features [10]. Big data tools and data mining methods must be integrated into the product development processes [1]. The analysis of usage data must be integrated into the early phase of the product development process for extensive market knowledge and an improved forecast of future requirements [1, 27]. Usage data must also be taken into account when designing products and manufacturing processes. Furthermore, the creation of the digital shadow of a PSS must be integrated into the product development process. Service-related business models require a comprehensive digital network of involved staff, partners and PSS. The network architecture is based on the connected systems [4, 24]. Networking requirements have to be formulated. Functions and components have to be developed for the implementation of the network. A network has to be protected from illegal threats by effective information security measures [28]. Customers pay for the use of the entire package of services or the output generated by the PSS within service-related business models. The OEM is therefore interested in ensuring the suitability of a PSS for the entire life cycle. The life cycle must be clearly taken into account in the product development process [11]. A comprehensive understanding of the life cycle can be gained by usage data. It

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is necessary to identify those characteristics of the PSS that have a particular impact on life cycle behavior. The entire life cycle behavior can be mapped at an early stage through modeling and simulation in order to design the PSS specifically [24, 32]. Furthermore, the OEM is interested in extending the PSS lifetime [29] and has to dimension the PSS components accordingly. A modular design enables the updatability and flexible adaptation in the long term. The collection, provision and distribution of information are key activities within successful service-related business models. Efficient systems for the management of information and knowledge from different sources must be implemented. The cross-company exchange is of additional importance due to an increasing value creation in networks and its application is facilitated by open system standards [4, 26]. Qualified IT specialists are important for the implementation of service-related business models in machinery and plant engineering [30]. Their share of the personnel in the functional area of product development has to be increased. The intelligent networking of mechatronic components and extensive cooperation increase interdisciplinary work significantly [4]. In addition, it is necessary to establish a pronounced service mentality within the workforce [25]. Service-related business models in machinery and plant engineering are based on value creation in networks of manufacturers, suppliers, customers and other partners [29]. These organizational networks enable the partners to concentrate on their core competencies [28, 33]. Product development can consequently focus on specific areas. Customer relationships within service-related business models are significantly stronger than within traditional business models [28]. Incentives of both parties involved are aligned [22]. This circumstance impacts the product development process. The OEM's product development goals are increasingly aligned with its customer's goals. Service-related business models result in a pronounced integration of the OEM and its customers which also affects the product development process. Customers support the development of value propositions and the identification of PSS aspects with effects on the PSS life cycle [11, 31]. 5. Case study The method was applied within a manufacturing company, which designs and assembles machinery for the food processing industry. During a workshop with experts and executives, the method was introduced. At first, the company’s planned future service-related business model was analyzed. The majority of the aspects could be assigned to the generic features (see Fig. 1). In the second step, there core features of the new business model were chosen and their implications on the current product development process (PDP) discussed. The value proposition of a guaranteed performance has a very strong effect onto the company’s PDP due to the so far nonexisting development process for services. The key activity collect, analyze and use of data has also a severe impact onto the PDP because of the integration of data analytics methods in the PDP. An implication was also seen for the key human resources. The establishment of a strong service mentality and thinking within the existing development department is crucial

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Michael Riesener et al. / Procedia CIRP 80 (2019) 756–761 Author name / Procedia CIRP 00 (2019) 000–000

for success of the new business model. The case study permits only a first partial validation of the method and additional efforts for validation in further workshops are required. 6. Conclusion With the presented method, implications of service-related business models in machinery and plant engineering on the product development process can be determined and evaluated. A business model-oriented perspective on the product development process in machinery and plant engineering was described. The constitutive features of service-related business models were deployed as input. A domain mapping matrix was used as methodological framework for the determination and evaluation of correlations. The results were visualized with the help of the domain mapping vector and the implications for companies in the field of machinery and plant engineering were discussed. The method was applied to a case study in a manufacturing company. The application showed the feasibility of the developed method. However, research limitations still exist. One limitation is the model’s simplicity due to the fact that only one business process, the product development process was considered. Another limitation results from the generic description of the service-related business model. Detailed effects of singular service offers, for instance remote maintenance, are not in the focus of this paper. Further research should address the limitations and offer guidelines for the implementation of service-related business models. The method should be enhanced in order to include other business processes. Investigations of dependencies between constitutive features of service-related business models and relevant business processes can thus be conducted. References [1] Schuh G et al.. Geschäftsmodell-Innovation. In: Reinhart G, editor. Handbuch Industrie 4.0. München: Hanser; 2017. [2] Meier H, Uhlmann E. Hybride Leistungsbündel – ein neues Produktverständnis. In: Meier H, Uhlmann E, editors. Integrierte Industrielle Sach- und Dienstleistungen. Berlin Heidelberg: Springer Vieweg; 2012. [3] Schuh G, Friedli T, Gebauer H. Fit for Service: Industrie als Dienstleister. München: Hanser; 2004. [4] Bauernhansl T, Paulus-Rohmer D, Schatz A, Weskamp M, Emmrich V, Döbele M. Geschäftsmodell-Innovation durch Industrie 4.0: Chancen und Risiken für den Maschinen- und Anlagenbau. München: Dr. Wieselhuber & Partner, Fraunhofer IPA; 2015. [5] Tukker A. Eight types of product-service system: 8 ways to sustainability? Bus Strat Env 2004;13:246-60. [6] Schmelzer H, Sesselmann W. Geschäftsprozessmanagement in der Praxis. 6th ed. München: Hanser; 2008. [7] Ponn J, Lindemann U. Konzeptentwicklung und Gestaltung technischer Produkte, 2nd ed. Berlin Heidelberg: Springer; 2011. [8] Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. New York: Wiley&Sons; 2013. [9] Wirtz B. Business Model Management. 1st ed.: Springer; 2010.

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