Downstream shift at a machinery manufacturer: the case of the remote technologies

Abstract

PurposeThe purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the paper is to analyze the potentially enabling role of remote technologies in that shift.Design/methodology/approachBesides examining the development of the supply chains based on the literature and a case company, the paper refers to the case of the remote technologies developed and used by the case company for the years of 2003‐2008.FindingsThe key finding of this paper is that no consensus exists on the favourable scope and content of the downstream shift aimed at by the machinery manufacturers. Respectively, the potential role of the technologies in the shift can also vary on a case‐by‐case basis. Based on the case study, instead of new sources of service revenues, the information processed with the help of the remote technologies may provide an opportunity for the machinery manufacturer to learn from its customers, thus offering a sound basis for various R&D and sales and marketing activities.Research limitations/implicationsThis paper can be considered as a pre‐study towards understanding about the true drivers of the downstream shift and their success factors. Technologies constitute one enabler in the shift, and its potential roles, together with the context specific factors, require further attention.Practical implicationsThe paper offers valuable insights into the development of the supply chains. Moreover, it takes a critical perspective on the positive expectations connected with the downstream shifts by the machinery manufacturers.Originality/valueThe longitudinal perspective to the case environment provides a sound basis for analyzing the development of the supply chain at hand.

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“…Thus, the business model and the supply chain innovation processes are strongly linked, and managers should take this insight into account when they develop their business strategies. For instance, Laine et al (2010) describe the case of a machinery producer that moved from being a manufacturer to become a comprehensive system supplier. To attain this goal, the company internalized new tasks of their customer and supplier network, thus radically changing its business model.…”

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“…Regarding to monetary benefits, smart services provide also a variety of nonmonetary benefits. Some non-monetary benefits are seen in the opportunity to learn more from customers and their product using, establishing a basis for research and development, sales or marketing activities (Laine et al, 2010). Consequently, Wünderlich et al (2015) emphasize smart services are gaining a considerable strategic importance in B2B and B2C contexts.…”

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