Mitigating uncertainty for industrial service operations: a multi case study

Abstract

Purpose This article aims to explore the evolution of industrial service uncertainties and the approaches for mitigating these uncertainties. The article also sheds light on how the interplay of potential uncertainties due to service operation challenges shapes the decisiveness of product-centric businesses. Design/methodology/approach To better understand how industrial firms mitigate uncertainties of industrial service provision by their supply chains, we adopted a qualitative multi-case logic methodology. Our approach is based on a research model of uncertainty avoidance and uncertainty reduction which we applied in an exploratory study with three major multi-national firms in the aerospace industry: BAE systems, Lockheed Martin and Rolls-Royce. Findings From the analysis, we found that to mitigate industrial service uncertainty, there is a need for aftermarket-oriented organisation, audit-oriented governance, relationship-oriented intelligence and lifecycle-oriented contracts. We also found that value uncertainty originating from unpredictability in client needs and project scope and structural uncertainty caused by volatility and variability of business structures are also important quandaries in decision making situations of firms towards their supply chains for industrial services. Originality/value The article makes two useful contributions. First it provides an assessment of the nature of uncertainty within operations for providing industrial services. Second, the paper identifies orientations for industrial service uncertainty mitigation. Whereas product-centric businesses firms tend to vary in their states for uncertainty avoidance and reduction, our work suggest similar orientations for uncertainty mitigation across these firms.

Bridging the gap between engineering design and marketing: insights for research and practice in product/service system design

“…From identifying, understanding and mitigating uncertainties when offering PSSs (Erkoyuncu et al. 2010; Erkoyuncu, Durugbo & Roy 2013; Durugbo & Erkoyuncu 2016) to the need of scenario analysis that addresses the needs of different stakeholders (Beuren et al. 2013) and the organization of human resources to provide high quality PSSs (Shimomura et al.…”

“…Several contributions point at different aspects of requirements for successful PSSs. From identifying, understanding and mitigating uncertainties when offering PSSs (Erkoyuncu et al 2010;Erkoyuncu, Durugbo & Roy 2013;Durugbo & Erkoyuncu 2016) to the need of scenario analysis that addresses the needs of different stakeholders (Beuren et al 2013) and the organization of human resources to provide high quality PSSs (Shimomura et al 2013). Coltman & Devinney (2013) provide operational capabilities (customer engagement, cross-functional coordination, creative solutions, operations improvement, IT infrastructure and professional delivery) and show how managers can allocate these capabilities to new or existing business opportunities.…”

Uncovering the role of cross-border strategic alliances and expertise decision centralization in enhancing product-service innovation in MMNEs

“…On the one hand, our study continues to build on the growing interest in studying cross-border and cross-sector strategic alliances (Gomes et al, 2016;Lew & Sinkovics, 2013;Luo, Wang, Jayaraman, & Zheng, 2013). On the other, it is amongst the first articles to study how the service function can be externalized through alliances (Bustinza et al, 2017a;Ceci & Masini, 2011;Durugbo & Erkoyuncu, 2016) or mergers and acquisitions (Xing et al, 2017) and to investigate the importance of expertise decision centralization in enhancing service-led growth strategies (Ghosh, 2013;Johnstone et al, 2014;Prajogo & Oke, 2016). More importantly, based on a unique survey-based sample of 285 MMNEs with head offices in the US, China, Germany, Japan and the UK, this study is, to the best of our knowledge, the first to investigate the innovation outcome of service-unit internationalization.…”

“…Through case study analysis, these authors found that service capabilities can be bought from external providers or partners. The advantage of buying service capabilities externally is that they reduce the uncertainties and risks associated with developing this function in-house (Bigdeli et al, 2017;Durugbo & Erkoyuncu, 2016). If research on development of the service function through partnerships with KIBS or other manufacturers is limited, study of how this function can be internationalized is practically non-existent though the need to selling services globally has been spotted by recent research (Parida et al, 2015;Zhang et al, 2016).…”

“…Research to date has focused on internal provision of services (Baines et al, 2017). Our extensive review of the servitization literature reveals that only a small number of studies acknowledge the role of external partners in enhancing product-service innovation (Bigdeli, Bustinza, Vendrell-Herrero, Baines, 2017;Bustinza et al, 2017a;Ceci & Masini, 2011;Chiva, Ghauri, & Alegre, 2014;Durugbo & Erkoyuncu, 2016;Paiola, Saccani, Perona, & Gebauer, 2013;Xing, Liu, Tarba, & Cooper, 2017). Moreover, whilst recent studies have started to look at how service provision can be developed externally through collaborative partnerships with KIBS firms (Bustinza et al, 2017a) and mergers and acquisitions (Xing et al, 2017), the crossborder component of those agreements is still underexplored.…”