Tim Baines,

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Product Service Systems as a service based
competitive strategy

• Tim Baines,
• Department of Manufacturing,
• Cranfield, UK

2

• Agenda
• Part 1 The Cranfield Innovative Manufacturing
  Research Centre.
• Part 2 Defining the PSS research theme
• Part 3 The Product Service Systems research
  agendaour early work

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Department of Manufacturing

• Specialist capabilities in Manufacturing Systems,
  Competitive Product Design and Manufacturing
  Fellowship.
• Industrial partners include Rolls Royce, Airbus,
  BOC Edwards, BAE Systems, Ford Motor Company,
  Toyota, and Nissan.
• Portfolio of Doctorate and Masters programmes,
  including Operations Excellence MSc Cranfield
  led with Rolls-Royce and Cambridge University as
  our partners. Queens Award for Fellowship
• A principal contributor to the Cranfield IMRC and
  the Product Service Systems research.

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The Cranfield IMRC

• Centre Vision
• To grow the existing world class research
  activity through the development and interaction
  between
• Manufacturing Technologies and Product Service
  Systems that move UK manufacturing up the value
  chain to provide high added value manufacturing
  business opportunities

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IMRCs Past Present

• University of Bath
• Design and Management
• Imperial College
• Built Environment
• University of Cambridge
• Engineering Design Centre
• University of Cambridge
• Institute for Manufacturing
• Cranfield University
• Manufacturing Technology
• University of Liverpool
• e-Business Research Centre
• Loughborough University
• ICT, Rapid Manufacturing and Construction

• University of Nottingham
• Manufacturing Technology
• University of Reading
• Construction
• University of Salford
• Built and Human Environment
• Heriot-Watt University
• Photonics and Digital Tools for Manufacturing
• University College London
• Bioprocessing
• Warwick University
• Traditional Manufacturing

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• Defining the Product Service Systems research
  theme

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The 2005 IMRC Review

• Prior to 2005 EPSRC are developing their
  expectations of IMRCs large centres such as
  Cranfield are attempting to galvanise legacy
  projects into coherent themes
• 2005 EPSRC reviews progress of all IMRCs using an
  international panel
• Manufacturing Technology research at Cranfield
  rated as Internationally leading
• Cranfield asked to revise strategy for
  non-technology (enablers infrastructure)
  research and submit bid for continuation of
  funding

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The challenge from the UK funding council (EPSRC)
?
What is the research theme that will bring
together the existing Cranfield capabilities in
technology and management?
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Business conditions in the UK
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A popular response

• Our strategy is to help more manufacturers to
  move up the value chain and to reap the benefits
  of high-skilled, knowledge-intensive
  manufacturing operations

Patricia Hewitt, Secretary of State for Trade and
Industry, The Governments Manufacturing
Strategy, April 20024.
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Reflecting on competitive strategy

• Customer Intimacy
• creating the best total solution for the
  customer

Operational Excellence delivering the best
total cost to the customers
Three ways of competing
Product Leadership the best product on the
market
Adapted from Treacy Wiersema, 1997
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Competitive strategy in practice
Power by the Hour Rolls-Royce have
successfully moved towards greater customer
intimacy A Product Service Systems refers to
the technologies, processes practices that
specifically enable such a business model This
move from manufacturer to service provider
places new challenges on the enterprise and
manufacturing operations
inspired by the work of Jay Lee, our Product
Service Systems research theme was born.
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Integration within the IMRC
PSS research theme
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• The Product Service Systems research agenda

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Traditional purchase of an excavator
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.buying an excavation capability
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and selling holes not drills
Scrap
Tools
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• so what work has already been carried out on
  PSS?

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Definitions of Product, Service System

• Product A tangible / material artefact
• Service A service is an activity (work) done
  for others
• System anything formed of parts placed together
  or adjusted into a regular or connected whole

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PSS Servitization
PSS Pay for usage Life cycle extension Minimise
environmental impact No transfer of asset
ownership
Increase in value
Extension of Business
Service Commodity Product
Product Commodity Services
Pure Product
Pure Service
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How long has PSS been studied?

• First detailed paper appeared in 1999

• Most papers appeared between 2000 and 2004

• Most recent papers appeared in 2006

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Where do contributions come from?

• Most articles are from Sweden and the Netherlands

• Few articles are from Asia

• No PSS authors in the USA Service science / IMS

• An increasing number of articles are coming from
  UK

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What are the disciplines of contributors?

• Most authors are from Environment,
  Sustainability, Economics and Ecology disciplines

• Few authors are from Engineering, Manufacturing
  or Design

• The majority of authors come from academia.. but
  are reporting on industrial practice

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Where are articles published?

• 80 are in technical journals such as Journal
  of Cleaner Production

• 15 are special reports

• The remainder are in other sources

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What topics do the articles cover?

• 20 build a case for PSS by describing business
  benefits and drivers

• 20 review the characteristics and categories of
  PSS

• 35 include case studies that give examples of
  PSS

• Other topics include product life cycle,
  service design methods, service engineering

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The research need
Sustainability Environment and energy the
traditional topic of Product Service Systems
Competitiveness The move up the value Chain /
Solutions rather than products
Focus for PSS Research _at_ Cranfield
Technology Increasingly informated products and
services (IMS)
Complex systems Large scale delivery systems
(IBM)
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What we will be doing
Science Engineering
Management .enabling the organisational
infrastructure for success with PSS
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• example of the challenges to manufacturing
  operations

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Traditional Support
Courtesy of Thales
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now availability capability provision
Supporting a capability rather than making bits
Alliance Hub
Guaranteed level of availability
X
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Two chains compared
Adapted from Cohen et al, 2006, HBR
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• Concluding remarks

Part 1 The Cranfield Innovative Manufacturing
Research Centre. Part 2 Defining the PSS
research theme Part 3 The Product Service
Systems research agendaour early work
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Product Service Systems as a service based
competitive strategy

• Cranfield University www.cranfield.ac.uk
• Prof Tim Baines www.cranfield.ac.uk/sas/staff/bai
  nest.htm
• IMRC / PSS www.cranfield.ac.uk/imrc