The Need for New Product Development Capabilities from Digitalization, Sustainability, and Servitization Trends

Abstract

Apparent from the latest pandemic, the dynamics and rate of change in society accelerate on a global scale. Ongoing mega-trends in society, such as digitalization, sustainability, and servitization, fundamentally changes the conditions for manufacturers when developing and providing new products. This study clarifies the combined impact and consequences on product development capabilities in manufacturing firms of the three mega-trends: (i) digitalization, (ii) sustainability, and (iii) servitization. The research is based on a pre-study, complemented with a semi-structured interview study at small, medium-sized, and large Swedish-based manufacturing companies, and a systematic literature review. The research makes evident that the main challenge is to empower engineers and development teams to model, present, evaluate, and develop expected and smart digitalized solutions in a time-limited environment and prioritize the most resource efficient and sustainable solution. Therefore, four complementary support resources are suggested: (i) a knowledge management platform, (ii) a data management platform, (iii) a set of criteria and metrics measuring progression, and (iv) support methods and tools to define, model, and evaluate solutions. When integrated into a digital platform, developers can simultaneously access and process the necessary information needed for sustainable, digitalized, and servitized solutions.

Crisis Preparedness of Healthcare Manufacturing Firms during the COVID-19 Outbreak: Digitalization and Servitization

“…Recent studies have emphasized the technological infrastructure for servitization and suggested that digital technologies were integral parts of servitization [13]. To cope with servitization, manufacturing firms have increasingly implemented digitalization to deliver services and to create more value for customers [40,41]. Digitalization is the transformation of business models as a result of a fundamental change to core internal procedures by adopting information and communication technologies [42].…”

Toward Servitized Research: An Integrated Approach for Sustainable Product-Service Innovation

“…Sustainable product-service innovation (PSI)-or servitization [1]-refers to the transition of firms from selling basic products and services to providing integrated productservice offerings in order to differentiate from the competition, improve customer value [2,3], and increase their economic performance while decreasing their environmental impact [4,5]. It is considered an economic megatrend that bolsters sustainability [6], as it covers a variety of business models whereby customers no longer attach importance to owning a product (e.g., light bulbs) but rather receiving a solution (e.g., light) [4,7]. Moreover, the application of digital technologies further enables firms in offering services that improve both economic and environmental sustainability [8,9], as smart combinations of service and technology reduce the consumption of natural resources and thus ecologically modernize industry [7].…”

Critical Success Factors of New Product Development: Evidence from Select Cases

“…From that point onwards, competition between the two in terms of features, innovation, and market share has been fierce, with one company's launch strongly countering the other's (Bouwmeester, 2016). Hallstedt et al (2020) justify that such competitive behavior represents an organization's eagerness to succeed and grow, which can only be possible through introducing attractive products into the marketplace. To do so profitably entails the organization to invest in the process of new product development (NPD).…”

“…Defined as a collection of related activities that begins with recognizing a market opportunity, and proceeds with converting it into a new product (Hallstedt et al, 2020), NPD is considered often as a source of competitive advantage (Owens, 2007). NPD is a process, whose inputs are idea generation, idea screening and feasibility studies (Kazimierska et al, 2017), while outputs are the manufacturing (Kazimierska et al, 2017), commercialization, and pricing of new product.…”

“…Their success is primarily driven by their innovative ideas, accurate market search, and timely market launch (Tariq et al, 2011). Hence, even with changing customer requirements, technological progressions, and challenges, the yearn for market domination tempts businesses to take upon the wavering risk of product failure (Hallstedt et al, 2020).…”