Scholarly article on topic 'Through-life Engineering in Product-service Systems – Tussles for Design and Implementation'

Through-life Engineering in Product-service Systems – Tussles for Design and Implementation Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Stefan Wiesner, Ingo Westphal, Klaus-Dieter Thoben

Abstract While maintenance is still dominating in Through-life Engineering Services (TES), Product-Service Systems (PSS) emerge as holistic solutions for customer problems. However, there are still tussles to be overcome. Product and service engineering are using different methodologies and tools. Product design is still receiving little information from both life cycles, and a digital representation of PSS to ensure interoperability is missing. Professional design knowledge and customer sentiment have to be combined, while service-based business models could endanger product sales. This paper aims to discuss the challenges for PSS with TES and give an overview on attempts to overcome the identified tussles.

Academic research paper on topic "Through-life Engineering in Product-service Systems – Tussles for Design and Implementation"

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Procedia CIRP 59 (2017) 227 - 232

The 5th International Conference on Through-life Engineering Services (TESConf 2016)

Through-life Engineering in Product-Service Systems -Tussles for Design and Implementation

Stefan Wiesnera*, Ingo Westphalb, Klaus-Dieter Thobena,b

aBIBA - Bremer Institut für Produktion und Logistik GmbH at the University of Bremen, Hochschulring 20, 28359 Bremen, Germany bFaculty of Production Engineering, University of Bremen, Badgasteiner Straße 1, 28359 Bremen, Germany

* Corresponding author. Tel.: +49-421-218-50169; fax: +49-421-218- 50007. E-mail address:


While maintenance is still dominating in Through-life Engineering Services (TES), Product-Service Systems (PSS) emerge as holistic solutions for customer problems. However, there are still tussles to be overcome. Product and service engineering are using different methodologies and tools. Product design is still receiving little information from both life cycles, and a digital representation of PSS to ensure interoperability is missing. Professional design knowledge and customer sentiment have to be combined, while service-based business models could endanger product sales. This paper aims to discuss the challenges for PSS with TES and give an overview on attempts to overcome the identified tussles.

©2016 The Authors.Publishedby ElsevierB.V. Thisis an open access article under the CC BY-NC-ND license (

Peer-reviewunderresponsibility of the scientific committee of the The 5th International Conference on Through-life Engineering Services (TESConf 2016)


1. Introduction

In concordance with customer demand for guaranteed product functionality and availability over a certain period of time, manufacturers have started to offer performance based contracts. These contracts contain so called Through-life Engineering Services (TES) in addition to the product to preserve its performance and reduce maintenance costs. While maintenance, repair and overhaul (MRO) services are still dominating in TES [1], customers increasingly demand that the manufacturer has to support all phases of the product life-cycle, from development over assembly and distribution to operation.

Especially intangible offerings have been extended over time, including more value added service propositions like training, system integration and consulting. Some firms even offer customized solutions to clients, where manufacturing no longer is the differentiating process. This servitization trend is leading towards a paradigm where services are not extensions of the product, but equally ranking components of an offer, in which even the tangible part can be sold "as a service". Such offers can be described as Product-Service Systems (PSS) [2]

that integrate the development, realization and provision of product-service bundles as a solution for the customer.

However, there are still major tussles that prevent the adoption of the PSS concept by manufacturing enterprises, including TES. Product and service engineering are using different models, methods and tools, mirrored in distinct business units. Product design is still receiving little information from its later life cycle phases and the service life cycle. The real-world product-service bundle has to be reflected in a digital representation to ensure multi-directional interoperability along the life cycles. Professional product engineering knowledge needs to be mediated with crowd sentiment, based on the service experience. Finally, innovative new service-based business models could endanger the current, still profitable product sales of a manufacturing company. [3]

This paper aims to discuss the challenges for PSS with TES and give an overview on attempts to overcome the identified tussles based on an exploratory study of literature and project results. How to integrate product design with the development of TES? How to re-use information from product usage and TES execution? How to create a digital image of the PSS? How to collect crowd sentiment on the TES experience? How to

2212-8271 © 2016 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (

Peer-review under responsibility of the scientific committee of the The 5th International Conference on Through-life Engineering Services (TESConf 2016) doi:10.1016/j.procir.2016.09.006

generate a PSS business model that doesn't decrease revenue based on product sales and TES provision?

2. Research Questions and Methodology

The main question to be addressed in this paper concerns the integration of Through-life Engineering Services in Product-Service Systems and the challenges companies face to develop and offer such solutions. For this we first need to characterize PSS with TES and the tussles for design and implementation. Secondly, which attempts exist to overcome the tussles and which limitations do they have for PSS with TES.

This leads to our research questions:

i. What is the state-of-the-art in TES and PSS research and how can they be combined?

ii. Which are the tussles for design and implementation of PSS with TES?

iii. What is required to overcome the identified challenges and what are existing approaches?

In order to address these points, our methodological approach is exploratory in nature. For a literature review, books, journal and conference papers in English were accessed through the multidisciplinary SCOPUS and other databases, as TES and PSS are a cross-domain research topic. The search results were checked for relevance and redundancy by assessing the abstracts. Based on this, papers were selected for in-depth analysis of the content. Additionally, current research from the PSYMBIOSYS project [3] has been included.

3. Through-life Engineering in Product-Service Systems

This chapter illustrates the results of the literature review on TES and PSS. The state-of-the-art in both areas, including definitions and research topics, is presented. Based on the results, links between the concepts are identified and characteristics of PSS with TES are identified.

3.1. Through-life Engineering Services

Through-life Engineering Services (TES) can be described as an enabler and risk mitigation initiative to business revenue streams from 'availability contracts' [4]. Redding defines TES as "a result of the application of explicit and tacit 'service knowledge' .supported by the use of monitoring, diagnostic, prognostic technologies and decision support systems whilst the product is in use, and maintenance and repair and overhaul (MRO) functions to mitigate degradation, restore 'as design' functionality, maximize product availability, thus reducing whole life operating cost." [1]

As customers increasingly demand guaranteed product availability and only want to pay for its use or even only for the results [5], the technologies and infrastructures supporting the product throughout its life come into focus. TES aim to provide support for each stage of the product life-cycle, i.e. ideation, design, manufacturing and operation, to end of life. They can be seen as an evolution of the maintenance, repair and overhaul (MRO) strategy [4].

In the past, MRO was seen as a secondary function to fix or replace a faulty component or product based on a standalone

contract. Furthermore, it was causing additional costs that should be minimized. With products becoming more complex and customers set value on their availability, this has evolved to full life-cycle engineering services. For a complex product, these services require specific technologies and processes for real-time monitoring and analysis of operational data, as well as the use of historical MRO knowledge. This 'service knowledge' can enable service led design, autonomous maintenance and prognoses on component life. The aim is to reduce the whole life-cycle cost for the stakeholders. With regards progressing towards PSS, Redding & Shaw state that "Through-Life-Engineering Services are emerging as a key facilitator to technology enabled service delivery systems in support of Product Service Systems generic business models" [1].

3.2. Product-Service Systems

Service provision is playing an increasingly important role in many manufacturing industries. Especially manufacturers of complex products have moved from selling products to delivering product-service bundles. This servitization process enables the companies to find new business opportunities and involve new customer segments, increasing their market share [6,7]. Starting by extending a core product with value-adding services [8], this process has led to integrated systems of tangible products and intangible services designed and combined to increase the value for customers, so called Product-Service Systems (PSS).

The PSS concept has been introduced by Goedkoop in 1999 as "a marketable set of products and services, jointly fulfilling a user's needs" [2]. It also defines the characteristic elements of a PSS as product, service and system. A product is a tangible commodity, manufactured and sold to be used or consumed by the customer to fulfil his needs. A service is an activity of benefit of intangible nature that provides economic value to the customer. The system describes the relationships between the product and service elements to create an integrated offer for the customer. Baines et al. [9] define PSS as an integrated product and service offering that delivers value in use. It utilizes the knowledge of the provider to decouple economic success from material consumption. Meier et al. [10] characterize Industrial PSS as having an integrated and mutually determined planning, development, provision and use of product, service shares and software components.

The PSS forms a knowledge-intensive socio-technical system that dynamically adapts to changing customer demands and provider abilities, being offered to the customer through innovative function-, availability- or result-oriented business models. This concerns the evolution from selling a product (based on its ownership) to selling its usage or performances. Tukker [5] has defined product-oriented, use-oriented and result oriented as the three main types of PSS.

3.3. Integration of PSS and TES Concepts

According to the analysis above TES can be regarded as a specific type of PSS. While in PSS the service could be the "dominant" part of the provided value and sometimes the

product is aligned to a service, the TES approach assumes, that the product is the core of the provided value and the services are aligned to it and should support during the lifecycle of the product. However, the TES approach support all three of Tukkers PSS types [5]:

• Product-oriented, e.g. maintenance contracts => TES ensures an efficient maintenance and low maintenance cost for the customer.

• Use-oriented, e.g. renting with included maintenance and repair and guaranteed product availability => TES helps to reduce the risk of unexpected high maintenance cost for the product and service provided.

• Result-oriented, e.g. selling the holes produced with a drilling machine instead the machine as such => TES helps to optimize lifecycle cost of a machine and in this way the provide can offer the PSS for a competitive price.

Also in TES, services gain importance and the range of services is extended. The evolution of MRO from breakdown response to condition bases monitoring [1] is based on the introduction of new service like data generation and analysis and the online triggering of actions.

4. Tussles for the Adoption of Product-Service Systems

Product-service solutions are not a novelty for manufacturing companies in developed countries. Service innovation for manufacturing industries has been addressed by several approaches, starting from the Extended Product paradigm [8], to Manufacturing Service Ecosystems [7] and Industrial Product-Service Systems [11]. Moreover, ICT is now able to generate, process, analyze enormous amounts of data and extract meaningful knowledge for a real time and well-founded decisional support. However, there are still tussles which are preventing the full adoption of the PSS concept [3] (see Fig. 1 below).



Fig. 1. Five Tussles for PSS Adoption [3]

The first tussle concerns the differences between the product and service domain, using different models, methods and tools. Secondly, there is still mostly a mono-directional information flow from design to manufacturing. The real PSS has no single interoperable digital avatar for its representation. The fourth

tussle describes the conflict between professional (engineering) knowledge and customer experience sentiment. Finally, established profitable business has to be reconciled with risky innovation. The tussles are described in detail in the following sections.

4.1. Product vs. Service

Products and services require different methods, competences and tools to efficiently manage and implement all life-cycle processes. Usually manufacturing companies have well-defined and structured product development processes, but they lack a sufficiently in defining service development processes. However, both data from the manufacturing side as well as the service side must be recorded in an appropriate way, brought together and delivered in order to offer an attractive product-service bundle to the customer [12]. The PSS extends the responsibility of the provider to the whole life-cycle [13]. Despite several methodologies have been proposed in literature to support industrial companies to design a PSS [14], some of them are very theoretical and hard to implement in practice, others are very specific and have a limited applicability range. Appropriate approaches, methodologies and tools for supporting the development of PSS in an efficient way are missing [15]. One way for the companies to handle this tussle is to combine Product Lifecycle Management (PLM) with Service Lifecycle Management (SLM) by using Information and Communication Technology (ICT). The basic assumption of many PLM approaches is that services and their lifecycles are aligned to the product. However, in many cases there is a strong need to have bi-directional coordination and interaction between PLM and SLM in a systematic way, e.g. for TES to close loops from service delivery to product development.

4.2. Design vs. Manufacturing

Again and again, weaknesses are identified in manufacturing or operation of PSS. Relations between the engineering and manufacturing phases have to be established through sharing of key information at the right moment in the correct format. For PSS, an approach to the engineering-manufacturing relation is necessary that includes also services during the lifecycle of the product, starting from the design phase and ending at the end of the usage phase, including the engineering and manufacturing phases. The current practice of a product-service development is still very linear and hierarchical, meaning that first the product is designed, engineered and manufactured before the services, hence being incapable of incorporating service requirements and constraints from all the stakeholders involved. Manufacturing enterprises providing product-services within a manufacturing ecosystem must be able to identify ubiquitously the requirements and constraints arising from the services related to the product, during the design and engineering phase. Today still an ongoing challenge [16]. In such way, those requirements are taken into account during the product design. A collaborative environment for PSS design, enabling communication with manufacturing, but also integrating knowledge form cross-disciplinary feedback loops, including customers is required.

Such functionality has to be enabled for the entire PSS and not only for the product. For TES, this means joint exploitation of data along the entire product-service lifecycle (not only from usage phases) of multiple PSS offerings from partners.

4.3. Real vs. Digital

Current factory automation systems are complex distributed systems that connect and coordinate intelligent machineries, sensors, actuators, control systems and manufacturing and business applications [17]. The complexity and distribution of the manufacturing ICT systems will further increase due the increasing availability and deployment of computing and communication features in many devices, as well as the increasing relevance of extended value chains and distributed manufacturing [18]. Because of the still common application of sequential development approaches, many different views on the same PSS are generated along the life-cycle. "Everything is a Thing" or "Everything is a Service" are two holistic but conflicting views in this regard. How can these views, especially for the "real" product and its "digital" representation, be reliably consolidated along the whole life-cycle? Reconciliation between the Real World and Digital World allowing multi-directional interoperability of the digital images of the same PSS between design-manufacturing and in general along every single phase of the PLM would benefit the pinpoint development of TES services.

4.4. Knowledge vs. Sentiment

For the development of successful PSS, on the one hand technical know-how and on the other hand customer needs play an important role. Companies are becoming increasingly aware of the fact that this knowledge is a resource requiring explicit management methods, if it is to be processed efficiently: storing knowledge, communicating, forging links and synergy between each individual's knowledge, and generating new collective knowledge [19]. A great deal of investment is put into the management of knowledge, yet it is still hindered by a number of fundamental, as well as specific, problems.

The design of services and physical products is also becoming more and more collaborative and requires knowledge that is usually scattered among different persons, departments or even organizations. Manufacturers are working closely with service providers, suppliers and customers to optimize designs of new product-service bundles before they are realized [20]. This network of partners defines the underlying problem and solves it through the application of knowledge, generating new knowledge including user and system requirements, sentiments, competences, design specifications or processing instructions [11]. To this end, both knowledge from the product side as well as the service side must be shared in an appropriate way, combined and utilized, in order to create an attractive PSS for the customer.

However, only about 4% of organisational knowledge is formalized [21]. Experiences show that knowledge cannot just be put in a database, that actors do not "know what they know" until they are asked for and that the knowledge chain will not work if any link is broken. Informal and unstructured

knowledge, consisting of individual posts and discussions, ideas, comments and other interactions is difficult to codify and share, as it requires individual interaction to transfer. It is however equally important as knowledge for PSS engineering.

Ideas collected from all product-service stakeholders, both internal to the enterprise and external ones, may hold valuable information that could substantially serve towards enhanced PSS design. In this context, social media and ideation platforms are investigated as subjectivity sources that encapsulate sentiment since they are used as means to communicate and share, among other things, opinions and feelings that may either directly or indirectly refer to specific product-services.

However, the sources and envisioned outcomes for PSS design pose extra restrictions and challenges. It is not enough to just distinguish between positive and negative feedback, but have a more fine-grained emotion analysis. Sentiment analysis could be useful, which was defined by [22] as "the computational treatment of opinion, sentiment, and subjectivity in text". Lack of syntax, jargon, misspellings, abbreviations, ways to express emotions (e.g. extensive or inconsistent usage of capital letters and punctuation), as well as network specific information like user mentions have to be considered [23]. Also, extracting implicit sentiment from interactions that take place in ideation platforms seems to be a new approach with little existing work [24].

For TES, knowledge sharing during PSS design is mainly focused on re-using service knowledge to improve the product or services. While approaches for formalization of explicit engineering knowledge exist, the flexible exchange of unstructured, tacit knowledge and sentiment between the stakeholders has only recently come into focus. A balance has to be found that supports a "bottom-up" knowledge sharing without sacrificing an efficient way to search and identify relevant knowledge.

4.5. Business vs. Innovation

From the economic viewpoint, PSSs are able to create new market potentials and higher profit margins, and can contribute to higher productivity by means of reducing investment costs along the lifetime as well as reducing operating costs for the final users [9]. However, innovation might not be beneficial from the viewpoint of existing business models. A product established in the market might be "cannibalized" when introducing competing PSS offers.

Innovation can be defined as: "the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations'" [25]. Innovation usually requires investments for development, implementation (in particular setting up processes with necessary tools), and marketing. The financial resources for this investment have to be acquired from external sources like shareholders, investors, or banks or it has to come from profits that are generated from existing other business. In all cases the providers of the financial resources usually expect an appropriate Return on Investment (ROI). In this way, innovation becomes a business and "beneficial" (see attribute above). However, not all innovation projects produce

such an ROI. Some fail, e.g. because the customer do not perceive the added value (attribute "improved"). So, the development and implementation of new, innovative solutions cause risks. There has to be a trade-off between these risks and the potential benefits. This is the core of the tussle "business versus innovation".

This first attribute "new" has an essential impact on this tussle. The higher the degree of novelty the higher is the uncertainty and therefore the risks. On the other hand the degree of novelty could contribute significantly to the added value perceived by the customer. So the enterprise that is aiming at innovations has to decide if they choose a high degree of novelty that could lead to strong competitive advantage but bears also a high risk or if they "play safe" and choose a low level of novelty. T he degree of novelty is not a "quality criteria" for an innovation. Even the combination of existing product and existing service can lead to a success on the market and disrupt other solutions. But the tussle is not only addressing the money that is needed for investment. A sometimes even more important aspect is the effect the introduction of new PSS could have on existing business. Generally the PSS could be competitive, complementary or neutral to the existing business. These effects can occur externally on the market, e.g. if the PSS and the existing products compete for the same customer budgets ("cannibalization" effects), or internally if they apply the same resources, a situation that could produce conflicts or synergies.

The characteristic of TES has implications for this tussle, since they are fundamentally aligned to the physical product that is usually part of the existing business, the services as such are not conflicting but supportive. However, if TES are used to enable use-oriented or even result-oriented solutions where the products are no longer sold this could lead to a decrease of product sales in the existing business. But TES is not the root-cause of such cannibalization, rather it supports conditions for the change of the value proposition.

5. Conclusion

The exploration has shown the connection between Through-life Engineering Services and the Product-Service Systems concept. Answering the first research question, it can be stated that PSS is the overarching concept, while TES can be included as a sub-set of the possible service components. They can be part of all three product-, use- and result-oriented PSS types by supporting the relevant aspects of the offer.

However, it could also be shown that the adoption of the PSS concept, including TES based PSS, by manufacturing enterprises is still subject to various conflicting viewpoints, or tussles. With regards to the second research question, five of such tussles were identified and described in more detail, with a focus on their impact on TES based PSS. The underlying challenges and first approaches to address these tussles have been identified in the same context, related to the third research question. Table 1 gives a summary of the main challenges for each tussle and existing approaches addressing these challenges that could be found.

Table 1. Tussles for PSS adoption

Tussle Challenges and potential Approaches

Product vs. Service • Coverage of whole product life-cycle

o Closed-loop PLM [26] o Product Avatar [27]

• Management of service life-cycle

o SSME [28] o SLM [29]

• Integration of PLM and SLM

o Product-Service offer [30]

_o P-SLM [31]_

Design vs. Manufacturing • Exchange of key information between life-cycle phases

o KBE [32]

o Cloud Manufacturing [33]

• Use of service information for product design

_• Cross-disciplinary feedback loops_

Real vs. Digital • Different views on the same PSS

o Internet of Things [34] o Internet of Services [35]

• Alignment of digital representations _along the PSS life-cycle_

Knowledge vs. Sentiment • Explicit product-service knowledge

o Physical and service

model [36] o KM framework for PSS design [37,38]

• Tacit product-service knowledge

o Web 2.0 tools [39] o Engineering 2.0 [40]

• Stakeholder sentiment _o Sentiment Analysis [41]

Business vs. Innovation • Classification of PSS innovation

o Innovation framework [7]

• Effects on current business _o Business modeling [7]_

The table above does not claim to be exhaustive, neither for the challenges, nor for the potential approaches. It summarizes the theoretical contribution of this paper. However, some practical implications can be derived from the findings. On the one hand, a company aiming to offer TES should be aware that it is not just a matter of integrating the product and the service. Also the four other tussles will have to be taken into account to some degree. E.g., it has to be decided which (service) information from later life-cycle phases is important for solution design and how it will be accessed. Will there be one "digital image" of the solution, or several, and how are they linked to the "real world"? Which knowledge and sentiments have to be managed to realize the solution? Finally, the impact of the planned TES on the conventional product business has to be assessed for an overall positive effect. On the other hand, the table provides some existing approaches companies can apply to answer the above questions. For the research community, this exploratory research can provide a basis for further investigation on each of the described tussles. This should on the one hand be done to extract the underlying challenges in more detail, and on the other hand to develop new approaches or solutions for each tussle. Furthermore, validation of the challenges and solutions in real manufacturing use cases, possible providing TES based PSS, would provide additional insights.


This work has been funded by the European Commission through the FoF-RIA Project PSYMBIOSYS: Product-Service sYMBIOtic SYStems (No. 636804). The authors wish to acknowledge the Commission and all the PSYMBIOSYS project partners for their contribution.


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