Servitization of the Manufacturer’s Value Chain

Abstract

Servitization, the offering of product-services, is a more and more pervasive concept. When applied correctly, it exploits the product and generates additional added value for the manufacturer as for the customer. Until now, servitization has been applied only onto the usage phase of the product, creating services around it. However the product is not the only valuable and tradable asset in a manufacturing enterprise. Therefore this article scrutinizes the possibility to additionally exploit the manufacturer's value chain, by servitizing its components and hence transforming them into products per se. To test this possibility Thoben's seminal representation of servitization was taken and applied onto the components of the value chain identified by Porter. It was elucidated that the proposed concept is feasible and under certain circumstances, it increases the seller's and buyer's sustainable competitive advantage. The article concludes by questioning the effect of this novel concept onto sustainability.

The value of Big Data in servitization

“…According to the framework from Thoben et al (2001)servitization has more than four main levels of servitization, going from pure product to providing pure functionality that can be detached from the product itself. Servitization is applied, not only to the final product of the manufacturer, but also to specific parts of the supply chain that are used to provide the final product (Opresnik et al, 2013b).…”

Enterprises’ Servitization in the First Decade—Retrospective Analysis of Back-End and Front-End Challenges

“…In fact, literature dealing with customer solutions identified diverging perceptions of quality between customers and suppliers, which confirms the need for evaluation. Beyond that, literature provides very limited considerations on this topic [86][87][88].…”

Investigating Drivers and Barriers for the Development of Product-Service Systems in Capital Goods Manufacturing Companies

“…One concrete concept that addresses the challenge on how to capitalize on the new paradigm of the CE is that of Product-Service Systems (PSS) (Devisscher and Mont, 2008;Tukker, 2015). PSS advocates revenue generation through an increasingly pervasive service-dominant logic and total solution offerings, rather than sales of physical products (Martinez et al, 2010;Opresnik et al, 2013). The goal that is aimed to be achieved through PSS is to develop a solution in which business drivers are mutually reinforcing the sustainability agenda (Roy, 2000;Tukker, 2004).…”