Ramp Up and Ramp Down Dynamics in Digital Services

Abstract

Volume ramp ups are notoriously difficult in digital services, where market pressures can lead to ramping up too soon and too rapidly which in turn can lead to the need to ramp down. This paper addresses the challenge of taking innovation to scale in an established firm by enhancing our understanding of the nature of service ramp ups and ramp downs. Digital service ramp ups differ substantially from production ramp ups as the speed is much greater, and problems are visible to customers. However there are similarities between service ramp downs and product recalls and an important contribution is exploring the nature of ramp downs their processes and possible causes. Using an engaged research approach, longitudinal data from three consecutive ramp ups in a European telecom operator were collected. Through analyses of cases, qualitative and quantitative case data, and using a system dynamics model, we identified a set of issues that affect service ramp ups and ramp downs. These include the need to ramp up the service supply chain, biases leading to unrealistic assumptions about scalability and problem‐solving, decision biases in various functions, launching digital services in beta form, a lack of transparency of capacity and lack of learning from previous ramp ups. We show that if these problems are not addressed or resolution is delayed, this can lead to cycles of delay, backlogs and productivity problems and the inevitability of a ramp down. We explore reasons and importance for such delays that lead to service ramp downs.

Opportunistic innovation in the age of digital services

“…Finally, our study brings to the fore the importance of supply chain attributes when innovating to capture a situational and temporal market‐wide opportunity. Consistent with previous studies on flexible supply chain, we show that supply chains play an important role in a competitive landscape where urgency becomes imperative (Akkermans et al, 2019). Extending previous studies on the role of supply chains in delivering innovation involving suppliers' innovative capabilities, joint buyer–supplier product development, and the like, our analysis highlights the salient role of resource congestion in the digital supply chain in delivering opportunistic innovation (Aggarwal, 2019).…”

“…Creating and capturing value in the digital business environment is becoming increasingly competitive (Evans, 2015; Fisher et al, 2018; Moon et al, 2018). Modern digital infrastructure enables fast changes in both the demand and supply of goods and services (Akkermans et al, 2019; Pervin et al, 2019). Thus, firms in digital environments must grapple with consumers' constantly changing requirements for their product and service offerings (Downes & Nunes, 2018; Fisher et al, 2018; Moon et al, 2018).…”

From Product to Service Ramp-Up Management

“…For manufacturing companies, Bergs et al [6] underline that product lifetime tends to decrease with a more rapid evolution of customer requirements. This is also true for service companies, as Akkermans et al [5] explain in their research about ramp-up and ramp-down dynamics. Indeed, it is shown that market pressures lead to accelerate the design of new services and their deployment.…”

“…Companies are increasingly confronted with issues during ramp-up of products and services, which is partly due to growing market pressure [5]. For manufacturing companies, Bergs et al [6] underline that product lifetime tends to decrease with a more rapid evolution of customer requirements.…”

“…Indeed, it is shown that market pressures lead to accelerate the design of new services and their deployment. Among the other causes explaining the growing importance of service ramp-up, Akkermans et al [5] argue that digitalization is progressing in different sectors, such as banking, media, or insurance. This development entails profound changes in the service offer of companies, and notably requires some improvements or adjustments.…”