About the authors

Professor Tim Baines leads Aston Business School's research on servitization. He is an international authority on servitization, and works extensively with manufacturers to transform their operations to compete through Product-Service Systems (PSS). He has published over 200 papers across the disciplines of management and engineering, and is amongst the most frequently-cited authors on servitization and Product-Service Systems. He has experience of a wide range of industrial engineering, technology management, and manufacturing management disciplines, and works with the leading companies in his field including Rolls-Royce, Caterpillar, Alstom, MAN and Xerox. His career started with a technician apprenticeship, and has progressed through a variety of industrial and academic positions, including that of Visiting Scholar within the Centre for Technology, Policy and Industrial Development at the Massachusetts Institute of Technology. He is a Chartered Engineer and a Fellow of both the Institution of Mechanical Engineers and the Institution of Engineers and Technologists.

Dr Howard Lightfoot is Manufacturing Systems Consultant and during the past seven years his work as a university Senior Research Fellow has focussed on the field of Servitization and Product-Service Systems where he has published extensively and is considered to be a leading authority in this area. Along with his co-author he works with the leading companies in his field including Rolls-Royce, Caterpillar, Alstom, MAN and Xerox. He has a First Class Honours Degree and PhD in Physics and is a Chartered Engineer and Fellow of the Institution of Engineers and Technologists. His career began as a lecturer in Electronic Engineering at Loughborough University before moving into industry where he held senior manufacturing operations and management positions within manufacturing companies such as Marconi and the Volex Group and held board level positions in several SMEs supplying Automotive, Defence and Aerospace sectors. He has over 25 years of experience in high technology product development and manufacturing with international business development experience gained in Western Europe, USA and the Far East.

Preface xi

Foreword xv

1. Introduction 1

1.1 Terminology and Scope 4

1.2 Knowledge Base 10

1.3 What's New Here? 14

1.4 Navigating This Book 16

Part 1: Business Context 19

2. Business Context for Servitization 23

2.1 An Economic Perspective 24

2.2 An Environmental Perspective 30

2.3 A Market and Social Perspective 37

2.4 A Technology Innovation Perspective 39

2.5 A Knowledge Perspective 42

2.6 Summarizing the Business Context 49

Part 2: Competing Through Services 51

3. Elements of Servitization 55

3.1 The Challenge of Visualizing What it Can Mean to Servitize 57

3.2 A Process of Servitization 61

3.3 Defining Base, Intermediate and Advanced Services 64

3.4 Features Commonly Coupled to Advanced Services 69

3.5 A Summary of Advanced Services 76

4. Business Implications of Advanced Services 79

4.1 Setting Out to Explore Financial Performance 80

4.2 Services, Revenues and Profitability 82

4.3 Motivations of Manufacturers Providing Advanced Services 87

4.4 Motivations of Customers Adopting Advanced Services 94

4.5 A Roadmap of Servitization and Advanced Services 100

Part 3: Service Delivery System 103

5. Delivery of Advanced Services 107

5.1 Searching for Leaders 107

5.2 A Perspective Against the World of Production 110

5.3 Advanced Services and Product-Service Systems 112

5.4 Service Delivery System for Advanced Services 116

5.5 Key Capabilities of a Service Delivery System 119

5.6 Chapter Summary 122

6. Performance Measures and Demonstration of Value 123

6.1 A Pyramid of Performance Measures 124

6.2 Customer Facing Measures of Performance 126

6.3 Macro Internal Measures of Performance 128

6.4 Local Internal Measures and Indicators of Performance 131

6.5 Demonstration of Value 134

6.6 Chapter Summary 138

7. Facilities and Their Location 143

7.1 Facilities in the Delivery of Advanced Services 144

7.2 Impact of Facilities and Their Location 148

7.3 Mitigating the Need for Co-Location 149

7.4 Chapter Summary 151

8. Vertical Integration and Organizational Structure 153

8.1 Organizational Structure in the Delivery of Advanced Services 154

8.2 Vertical Integration in the Delivery of Advanced Services 159

8.3 Impact of Vertical Integration and Organizational Structure 163

8.4 Mitigating the Need for Integration 166

8.5 Chapter Summary 167

9. Information and Communication Technologies 169

9.1 ICT Architecture in the Delivery of Advanced Services 170

9.2 Monitor 173

9.3 Transmit and Store 175

9.4 Analyse and Respond 176

9.5 Impact of ICT Capabilities 178

9.6 Chapter Summary 179

10. People Deployment and Skill-Sets 181

10.1 Deployment of Staff in the Delivery of Advanced Services 183

10.2 Behaviour and Skill-Sets of Front-Office Staff 185

10.3 Culture, Leadership and Incentives in the Front Office 191

10.4 Impact of an Integrated Skill-Set 194

10.5 Chapter Summary 197

11. Business Processes 199

11.1 Services Processes in a Production Environment 200

11.2 Business Processes in the Delivery of Advanced Services 204

11.3 Proactive Processes as the Core for Advanced Services Delivery 208

11.4 Chapter Summary 211

Part 4: Readiness to Servitize 213

12. Starting a Transition 217

12.1 Summarizing Servitization, Advanced Services and their Delivery System 218

12.2 A Readiness to Servitize 221

12.3 Overcoming the Obstacles to Transformation 230

12.4 The Journey Continues 232

Appendix: Acknowledgements and Guiding Studies 235

Index 243