Strategies for Extended Product Business Models in Manufacturing Service Ecosystems

Abstract

Abstract. The growing demand for integrated solutions forces manufacturers of industrial goods to combine their products with service components to ProductService Systems, or Extended Products (EP). The new value proposition of the EP and the required network of business partners are not included in the traditional business models of manufacturing companies. A business model represents the implementation of an industrial strategy in respect to its specific elements. The purpose of this paper is to investigate classic strategies in manufacturing and new strategic approaches to help manufacturers transform their business models for EP. A special focus is given to value innovation and collaboration in Manufacturing Service Ecosystems (MSE). In an MSE, different organizations and individuals can work together with common or complementary objectives on new value added combinations of manufactured products and product-related services. The approach is exemplified by the transformation of the business model of a machine tool manufacturer.

Requirements for Servitization in Manufacturing Service Ecosystems

“…Different options for servitization can be identified, creating a number of challenges for the manufacturer of the tangible product. Below, possible options for servitization are described along with the inherent challenges [10]:…”

“…Innovation in this environment is driven by the fact that business opportunities might be generated and identified within the MSE and not brought by the outside market. This is due to the customers also being part of the ecosystem and participating in value cocreation: [10] The MSE concept features four dimensions, which have to be supported with the appropriate models, methods and tools:…”

Designing flexible service systems: application to machine tools

“…This shift towards extended products which complement tangible products with additional services does need a change of the model from a supply chain to an ecosystem concept. The Manufacturing Service Ecosystem (MSEE) project has supported this change with the Service Ecosystem idea (Wiesner et al 2013a) under which the requirements for the transition in the manufacturing, organizational and IT domain have been recognized (Wiesner et al 2013b).…”

“…To stay competitive in the current age of service economy, the manufacturers are introducing new business models along with value added services for their products (Brax 2005;Wiesner et al 2013a). For doing so, the manufacturers have to have a service system that will support the new role as service providers.…”

Information – The Hidden Value of Servitization

“…Insofar the added value for the P-S provider as for the customers derived from the product and its services converged into a P-S offering; whereas, now, an additional layer of benefits is added to this convergence, the information layer. The same concept of adding information as an additional layer of added value, could be depicted also on the Extended Product Concept [22]. The information layer surrounds the existing layers.…”