FACILITATING VALUE-IN-USE THROUGH PRODUCT-SERVICE SYSTEMS

Abstract

Manufacturers are seeking to reform their competitive strategies by integrating services and products together in their offering. Such services-led competitive strategies focus on overcoming challenges faced with intense global competition and commoditization of many product markets. This study is conducted as a case study of multinational manufacturer. The case company supplies refrigerated display case (RDC) equipment to well-known fast-moving consumer goods (FMCG) companies in the food and beverage industry worldwide. The RDC industry is rapidly commoditizing and highly competed. Thus, the company is in process to introduce an integrated offering of products and services (PSS) to its customers. Applying a theoretical PSS framework by scholar Tukker (2004), this study aimed at exploring the value facilitated to its customers with the PSS service provisions. The study aimed at answering the research question: How to facilitate value creation to customers through introduction of integrated product-service systems? This study was conducted as a qualitative case study and it applied constructive research approach (CRA). The data collection was conducted by interviewing selected senior, director level experts both from the case company and from the company’s global clientele among the food and beverage industry. For the in-depth interviews, the interviewees were provided in advance the themes and a description of the case company’s PSS as a discussion guideline. This study found that appetite exists in the customers’ sphere to evaluate a PSS offering in the context of the RDC equipment over the current sourcing and operating models. It was found that traditional product-based services furthermore contain value to customers whereas advanced services, such as digital services only contain value if they are closely linked to customers’ KPIs and business results and based on solid baseline data. Customers are interested yet hesitant to adopt completely outsourced, performance-based cold services and asset management through Opex instead of Capex, unless all corporate functions are aligned, and the business case proven. Value visualization i.e. demonstrating the hard values and soft values is crucial for deployment, in a tangible format. Sustainability targets and life-cycle approach support the introduction of PSS within the RDC, whereas human factors and resistance to change were found important challenges for joined value creation.