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Purpose – Manufacturing companies are increasingly making efforts to combine products and services into integrated offerings. However, the companies’ success in such transformation is linked with the presence of structured routines and processes, which the authors conceptualize as product-service systems (PSS) innovation capabilities. The purpose of this paper is to address the important question of how manufacturing companies can systematically build PSS innovation capabilities and does its presence or absence significantly influence PSS innovation. Design/methodology/approach – This study is based on longitudinal data from an aerospace company, which acts both as an OEM providing through-life services for aircraft engines, as well as a developer of innovative subsystem technologies. Data has been collected over three years (2009-2012) and constitutes 40 in-depth explorative and semi-structured interviews with diverse respondents. For analysis of the data, the authors have used constant comparison technique leading to identification of three high-order categories. In addition, the authors gain from observations and secondary data which enable to achieve data triangulation and data validity. Findings – The results objectively depict an overview of how the case company developed PSS innovation capabilities, though progression of routines over three early PSS development stages. More specifically, the authors find evidence for development of formalized routines related to customer interaction and innovative organizational climate during need phase, cross-functionality, and network partnering during solution-seeking phase, and competence and business case development during solution development phase. As these routines become more structured within the case company, they forge a path for PSS innovation capabilities development. Originality/value – This study provides two distinctive contributions to emerging PSS literature. First, the authors propose and explain how PSS innovation capabilities are developed. Although prior studies acknowledge the importance of possessing specialized PSS innovation capabilities, limited studies have reported empirically how they are developed. Second, through adopting a longitudinal perspective, the authors reveal key routines and actions that drive PSS innovation during different development stages. To the knowledge, no prior study has combined insights from PSS literature and resource-based view to objectively explain capabilities development process.

Apparent from the latest pandemic, the dynamics and rate of change in society accelerate on a global scale. Ongoing mega-trends in society, such as digitalization, sustainability, and servitization, fundamentally changes the conditions for manufacturers when developing and providing new products. This study clarifies the combined impact and consequences on product development capabilities in manufacturing firms of the three mega-trends: (i) digitalization, (ii) sustainability, and (iii) servitization. The research is based on a pre-study, complemented with a semi-structured interview study at small, medium-sized, and large Swedish-based manufacturing companies, and a systematic literature review. The research makes evident that the main challenge is to empower engineers and development teams to model, present, evaluate, and develop expected and smart digitalized solutions in a time-limited environment and prioritize the most resource efficient and sustainable solution. Therefore, four complementary support resources are suggested: (i) a knowledge management platform, (ii) a data management platform, (iii) a set of criteria and metrics measuring progression, and (iv) support methods and tools to define, model, and evaluate solutions. When integrated into a digital platform, developers can simultaneously access and process the necessary information needed for sustainable, digitalized, and servitized solutions.

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Abstract. Current systems engineering (SE) standards do not address 'Value' in much detail.Yet, understanding what drives the generation of stakeholder value in a given business context, is fundamental to promoting a common and clear vision throughout the extended enterprise, of what should be the focus of their early, conceptual work at all levels of development. This paper presents a Value-Driven Design (VDD) methodology designed to strengthen the value and requirements maturation process within an extended enterprise setting. The work presented is the result of a three and a half year European program (CRESCENDO) within the aerospace sector. The VDD methodology is introduced and explained in an industrial aircraft development context and a selection of enabling methods and tools associated to the VDD methodology is presented.

In complex products the values of parameters are rarely exactly the required values, rather they often have a margin that might be designed in deliberately or be the incidental results of other design decisions. These margins play a critical role in design processes in managing engineering change and iteration. While engineers often talk about margins informally, designers and researchers also use other terms for specific margin concepts. This paper reviews the existing literature on related concepts and defines margins formally. It discusses the role margins play in handling uncertainty by distinguishing between buffer and excess. Buffer deals with uncertainty and excess with the remaining overcapacity of the design. Buffer can transition into excess of the design solution if the uncertainty can be reduced. The concepts are applied to the temperature margins of several candidate materials for a non-rotary jet engine component. This shows that a clear understanding of margins can help a company to select design alternatives.

The development of new technologically advanced products requires the contribution from a range of skills and disciplines, which are often difficult to find within a single company or organization.Requirements establishment practices in Systems Engineering (SE), while ensuring coordination of activities and tasks across the supply network, fall short when it comes to facilitate knowledge sharing and negotiation during early system design. Empirical observations show that when system-level requirements are not available or not mature enough, engineers dealing with the development of long lead-time sub-systems tend to target local optima, rather than opening up the design space. This phenomenon causes design teams to generate solutions that do not embody the best possible configuration for the overall system. The aim of this paper is to show how methodologies for valuedriven design may address this issue, facilitating early stage design iterations and the resolution of early stage design trade-offs. The paper describes how such methodologies may help gathering and dispatching relevant knowledge about the 'design intent' of a system to the cross-functional engineering teams, so to facilitate a more concurrent process for requirement elicitation in SE. The paper also describes EVOKE (Early Value Oriented design exploration with KnowledgE maturity), a concept selection method that allows benchmarking design options at sub-system level on the base of valuerelated information communicated by the system integrators. The use of EVOKE is exemplified in an industrial case study related to the design of an aero-engine component. EVOKE's ability to raise awareness on the value contribution of early stage design concepts in the SE process has been further verified with industrial practitioners in ad-hoc design episodes.

Supporting designers is one of the main motivations for design research. However, there is an ongoing debate about the ability of design research to transfer its results, which are often provided in form of design methods, into practice. This article takes the position that the transfer of design methods alone is not an appropriate indicator for assessing the impact of design research by discussing alternative pathways for impacting design practice. Impact is created by different means – first of all through the students that are trained based on the research results including design methods and tools and by the systematic way of thinking they acquired that comes along with being involved with research in this area. Despite having a considerable impact on practice, this article takes the position that the transfer of methods can be improved by moving from cultivating method menageries to facilitating the evolution of method ecosystems. It explains what is understood by a method ecosystem and discusses implications for developing future design methods and for improving existing methods. This paper takes the position that efforts on improving and maturing existing design methods should be raised to satisfy the needs of designers and to truly support them.