This paper explores the business implications of Integrated Product and Service Offerings (IPSOs). The objective is to show examples of the business implications of IPSOs from a supplier’s perspective, and to suggest specifications for supporting methods needed for such an industrial company. The paper is largely based on empirical case studies of 120 Swedish manufacturing companies of all sizes. Results from the case studies show that both small and large companies that conduct the transition towards IPSOs face several important strategic challenges, some of them associated with high risk.

Competition among original equipment manufacturers are increasing and firms are looking for new ways to compete without dumping the prices. A growing approach is to move from selling traditional products into solutions with a combination of product and services by offering product service systems (PSS). This can provide business opportunities and strengthen the relationship with existing customers, but to reap the rewards there are both internal and external challenges that the firm needs to overcome, they also need to look at new ways of working to be able to handle the increased complexity of selling solutions. This master thesis has investigated how Xylem should approach servitization from a customer oriented perspective. It also discusses how the incentives and challenges for servitization for customers differ depending on segment and compared to literature. Through a combination of existing literature and qualitative interviews with Xylems customer it has been possible to identify the key components and drivers for when a customer is mature to approach servitization. It has resulted in an alternative list and ways of approaching servitization where the customer characteristics are taken into consideration. The findings from this thesis highlight a number of critical customer characteristics that need to be considered. It shows the importance of understanding a larger part of the customers business model when selling a product service system compared to when selling a product. / Konkurrensen mellan original utrustnings tillverkare tätnar och firmor letar efter nya sätt att tävla utan att dumpa priserna. Ett växande sätt att hantera det är att övergå från att sälja traditionella produkter till att sälja lösningar som består av en kombination av produkter och tjänster genom att erbjuda produkt- och tjänstesystem (PSS). Det här kan erbjuda affärsmöjligheter and stärka kundrelationen, men för att kunna skörda frukterna av detta så måste firman övervinna både interna och externa utmaningar. De behöver även titta på nya sätt att hantera den ökade komplexiteten som kommer med att sälja lösningar. Det här mastersarbetet har undersökt hur Xylem bör närma sig tjänstefiering från ett kundorienterat tilltalssätt. Det diskuterar även hur drivkrafterna och utmaningarna för tjänstefiering varierar beroende på segment and jämfört med litteraturen. Genom en combination av existerande litteratur and kvalitativa intervjuer med Xylems kunder hard et blivit möjligt att identifiera nyckelkomponenter och drivkrafter för när kunderna är mogna nog att närma sig tjänstefiering. Det här har resulterat i en alternativ lista och angreppssätt när det kommer till tjänstefiering där kundprofilen tas med i bejakande. Slutsatsen betonar ett antal kritiska kundegenskaper som behöver ta i åtanke. Den visar också hur viktigt det är att förstå en större del av kundens affärsplan när man säljer ett produkt- och tjänstesystem jämfört med när man säljer en produkt.

Manufacturing companies have begun developing Product Service Systems to provide customers with enhanced product-service offerings. Transitioning to a service-oriented development process allows companies to restructure risks, responsibilities, and costs normally associated with owning products. They potentially allow companies to sell products through different channels and offer additional elements of differentiation to their competitors. However, PSS comes with a lot of challenges that manufacturing companies have struggled to overcome. Some of these challenges include switching away from traditional hardware-focused mindset and the service manufacturing paradox. This thesis focused on challenges regarding integrating services within product development processes. A Swedish manufacturing company was considered as the primary case study for investigation. 14 people from different functions were interviewed. The investigation revealed 17 challenges categorized into five main themes. These themes were lack of clear company messaging regarding services, immature service development process, sub-optimal division of tasks and responsibilities, resources issues, and lack of integration in processes. Additionally, three external companies were interviewed to investigate their service maturity level and how they were able to overcome common challenges in service integration. Based on the insights gained from both internal and external interviews three solutions were created. These solutions are new roles and updated responsibilities, a new integrated service process, and a Product-Service Readiness Level chart. Future considerations for the investigated company were also submitted to provide a guide for further development of these solutions. / Tillverkningsföretag har börjat utveckla produktservicesystem för att ge kunderna förbättrade produkttjänster. Övergången till en tjänsteorienterad utvecklingsprocess tillåter företag att omstrukturera risker, ansvar och kostnader som normalt är förknippade med att äga produkter. De tillåter potentiellt företag att sälja produkter genom olika kanaler och erbjuder ytterligare inslag av differentiering till sina konkurrenter. Men PSS kommer med många utmaningar som tillverkande företag har kämpat för att övervinna. Några av dessa utmaningar inkluderar att byta bort från traditionella hårdvarufokuserade tänkesätt och tjänstetillverkningsparadoxen. Detta examensarbete fokuserade på utmaningar när det gäller att integrera tjänster i produktutvecklingsprocesser. Ett svenskt tillverkningsföretag ansågs vara den primära fallstudien för utredning. 14 personer från olika funktioner intervjuades. Undersökningen avslöjade 17 utmaningar kategoriserade i fem huvudteman. Dessa teman var brist på tydliga företagsmeddelanden om tjänster, omogen tjänsteutvecklingsprocess, suboptimal fördelning av uppgifter och ansvar, resursfrågor och bristande integration i processer. Dessutom intervjuades tre externa företag för att undersöka deras mognadsnivå för tjänster och hur de kunde övervinna vanliga utmaningar inom tjänsteintegration. Baserat på insikterna från både interna och externa intervjuer skapades tre lösningar. Dessa lösningar är nya roller och uppdaterade ansvarsområden, en ny integrerad serviceprocess och ett diagram för produkt-tjänstberedskapsnivå. Framtida överväganden för det undersökta företaget lämnades också in för att ge vägledning för vidareutveckling av dessa lösningar.

There is an intersection of challenges where society’s social and ecological problems coincide with the industrial firm’s challenge to maintain profitability in a globalizing world. Products connect these challenges. The development of these products together with services (product-service systems) therefore provides a critical intervention point to address these challenges. This includes e.g. defining what the products and services are, how they will deliver value to users, and the business models that enable them to be realized, as well as how these can contribute to sustainable development of society. The overarching goal of this research is to contribute to sustainable development of society by better understanding how a strategic sustainable development perspective based on backcasting from basic principles for a sustainable society can be brought into and guide product-service system innovation. Interviews with industry professionals, workshops with both manufacturing companies and within student projects, and industrial cases studies, together with a review of literature and theoretical considerations, provide the methodological basis for this work. This thesis contributes to clarifying theoretical and practical possibilities and limitations for a strategic sustainable development perspective to guide product-service system innovation and provides a basis for the integration of these concepts. The findings indicate that the co-innovation of products and services in product-service systems can contribute to sustainable development of society both by supporting reduced material and energy use and by supporting improved life cycle management of materials. Further, a strategic sustainable development perspective can contribute to the refinement of existing tools and methods in product-service system innovation by providing an operational definition of sustainability articulated in the form of first-order principles that describe the boundary conditions for a sustainable society, and by providing guidelines for how to approach a vision of success inside those boundaries in a strategic way. In order to identify solutions that meet society’s pressing challenges, new solution spaces may need to be identified, and this can be enabled by a shift from product development with service as “add-ons” to their co-innovation in product-service systems. An initial approach for how this could be enabled through bringing together set-based approaches to design product-service systems with a strategic sustainable development perspective is presented.

Many literatures have shown that needs last longer than any specific solutions, so understanding of customer needs seems a crucial factor in early Product-Service System (PSS) development. Nowadays, many western companies, especially manufacturing focused companies, have realized the difficulty of understanding market needs. In this thesis, a new Value-Driven Needfinding methodology for manufacturing company to apply in certain markets was investigated. To further demonstrate the implementation of the proposed methodology, a case study involving Volvo Construction Equipment exploring value-orient needs in Chinese market is showed. At the end, by providing the scenarios comparison, a PSS conceptual design will be illustrated to show the utilization of the customer needs, then opportunities for company future provision towards sustainability based on early PSS development will be discussed. / Providing added value to standalone products by adding services is at the core of Product-Service Systems (PSS) offered in manufacturing companies. Providing PSS requires a change not only in the way products are sold, but also in the way they are designed and developed. The way of understanding and capturing customer needs often fall outside the early phase of designing integration solution in traditional manufacturing company. The aim of the thesis is to investigate the needfinding for early phase of PSS design, methods and tools proposed to improve the need collection and analysis process. This academic work was performed through the close collaboration with Volvo Construction Equipment which is looking for opportunities to provide Product-Service System in the Chinese market. The thesis group firstly reviewed theory of needfinding, and then the importance of value was brought out. The methodology of Value-Driven Needfinding (VDN) was introduced to facilitate the early PSS development. By deriving needs from an adding value standpoint, this methodology is not only focused only on needs intended as “Voice of the customer” but rather as needs expressed as “Value Adding Activities”. Thus, these value-based needs can reveal some functions for potential system solution development. A case study involved with Chinese customers’ needs is described to demonstrate the application of VDN. Two scenarios comparison were presented to evaluate the sustainable influence between provision of current solutions and new PSS solution. During discussion part, the application of VDN, the Chinese market preferences and the contribution of VDN for early PSS design from sustainable perspectives are discussed. At the end, three conclusions supported the contirbution of VDN applied for manufacturing company to carry out PSS development at early stage are showed. / 0736278002, Pohlmesgatan 27 B lgh 1208 371 40

Increasing awareness of anthropogenic impacts on the planet has lead to efforts to reduce negative environmental impacts in product development for several decades. Benefits to companies who focus on sustainability initiatives have been put forth more recently, leading to many efforts to incorporate sustainability considerations in their product innovation processes. The majority of current sustainability considerations in industry constrain design space by emphasizing reduced material and energy flows across the product’s life cycle. However, there is also an opportunity to use awareness of sustainability to bring attention to new facets of design space and to drive innovation. Specifically there is an opportunity for product-service systems (PSS) to be a vehicle through which sustainability-driven innovation occurs. A framework for strategic sustainable development (FSSD) provides the basis for understanding sustainability in this work, and provides clarity with regard to how to think about sustainable products and service innovations. The “backcasting” approach included in this framework also provides insight into how incremental and radical approaches could be aligned within the product innovation working environment. This thesis explores how sustainability considerations can be better integrated into existing product innovation working environments in order to drive innovation processes within firms, with a specific emphasis on opportunities that occur as sustainability knowledge leads to innovation through a product-service system approach. It endeavors to contribute to both theory development within the emerging sustainable PSS design research area, and also to advance the state of practice within industry by connecting dots between the state of theory and the state of practice. Society’s opportunity to become more sustainable and industry’s desire for innovation in order to lead to or increase profitability are often in conflict. However, this thesis argues that knowledge of global social and ecological sustainability can be used to drive innovation processes, and that there are win-win opportunities that can often be achieved through a PSS approach. There is some, but not sufficient, support for the inclusion of sustainability considerations in the product innovation process, and even fewer tools to support the use of sustainability to drive innovation. In response, an approach to providing support that brings together the FSSD and various approaches to systems modeling and simulation is presented. Opportunities to use sustainability-friendly attributes of existing products through a PSS-approach are also presented.

Problem: Public procurement constitutes a large part of the global economy, accounting for 15% of GDP. But it is also responsible for 15% of global greenhouse gas emissions and consumes vast amounts of raw materials as it is strongly focused on linear products. A more circular alternative is the procurement of Product-Service Systems (PSS), which combine products and services. However, research shows that Circular Public Procurements, such as procurements of PSS, are more complex and require deeper procurer-supplier interaction. Yet, the procurer-supplier interaction in the context of public procurement of PSS has not been empirically explored.  Purpose: The purpose of this study is to explore how the interaction between the procurer and supplier throughout the public procurement process can facilitate public procurement of PSS. Method: A qualitative multiple-case study was conducted, exploring four cases of public procurements of PSS between Swedish municipalities and Swedish private companies. Seven semi-structured interviews with interviewees from both sides were conducted. The data was triangulated with case-specific procurement documents.  Results: Procurer-supplier interaction was found to be crucial for procurers and suppliers throughout the public procurement process to make PSS happen and to improve its quality. In both, the preparation and utilisation phase of public procurement, the interaction can bring benefits for procurers as well as for suppliers, thus facilitating PSS.

This study identifies enabling factors for a circular business model that focuses on use-oriented services in the fashion industry. The objective is to provide an overview of the possibilities of use-oriented services for sustainability and to determine motives for renting everyday clothes from a consumer perspective.The clothing industry is one of the most polluting and unsustainable business industries (Leal Filho et al., 2019). It starts to move towards the wider movement of circular economy and use-oriented service businesses, which some scholars see PSS as a sustainable business option due to its reduced environmental impact of economic activity (Baines et al., 2007). With the concept being tested on less quality-focused fashion retailers, the concept's real strength can be slowly analyzed. This study focuses on incentives and obstacles for conscious consumers to participate in a fashion renting program as well as the possibilities for sustainability from a consumer perspective. A multidisciplinary literature review was conducted to get insights into the topics of sustainable business models, circular businesses in particular, and product service systems, especially in the fashion industry. Semi-structured interviews were used to collect empirical data that were analyzed and related to the concept of social practice theory. The results show that renting everyday garments appears as a new concept that has not been considered yet. There is a general interest in renting special occasion clothes. Identified obstacles are the own lack of interest in fashion styles, no need for new clothes, quality, as well as logistic and transportation concerns.Sustainability was an overall important aspect for all respondents and, therefore, the concept of renting was mainly discussed in the sense of providing a sustainable purpose. Participants agreed that the business model could contribute to sustainability when the lifetime of garments is significantly extended. However, they questioned if renting can really decouple economic success from material consumption.

Die Dissertation hat zum Ziel, zum einen Beitrag zur wissenschaftlichen Diskussion in der Wirtschaftsinformatik hinsichtlich der Gestaltung von Informationssystemen zur Unterstützung des Technischen Kundendienstes (TKD) zu leisten. Zum anderen sollen die Ergebnisse bei Herstellern und Serviceorganisationen des Maschinen- und Anlagenbaus, der Fertigungsindustrie sowie bei Softwareherstellern als Grundlage zur Konzeption und Implementierung derartiger Informationssysteme dienen. Die vorliegende Arbeit untersucht im Dachbeitrag (Teil A) zunächst komplementäre Lösungsansätze bzw. -zusammenhänge relevanter Wissenschaftsdisziplinen wie der Wirtschaftsinformatik, der Ingenieurwissenschaft, der Dienstleistungs- und Product-Service-Systems-Forschung sowie der Arbeitswissenschaft. Unter Berücksichtigung aktueller methodischer Diskussionen der Wirtschaftsinformatik wird die Arbeit in das gestaltungsorientierte Paradigma eingeordnet, ergänzt um Elemente einer erklärungsorientierten Perspektive. Das Untersuchungsdesign orientiert sich an dem Ordnungsrahmen von Gregor und Jones. Allerdings wird im Unterschied zu Gregor und Jones der prototypischen Instanziierung ausgewählter Artefakte inklusive Evaluation eine hohe Bedeutung zugemessen und diese entsprechend in der Arbeit dargestellt. So entstehen unter Anwendung ausgewählter Methoden der Wirtschaftsinformatik praxisnahe Artefakte, welche die in der Arbeit adressierte Problemstellungen und Forschungsfragen adäquat diskutieren. Im Ergebnisteil werden „Allgemeine Ergebnisse“ und „Spezifische Publikationsergebnisse“ differenziert. In den allgemeinen Ergebnissen erörtert die Arbeit zum einen die entstandenen Artefakte, zum anderen wird die wirtschaftliche Verwertung der Forschungsergebnisse skizziert. Diese Darstellung erfolgt anhand einer Unternehmensgründung, die im Anschluss an die Forschungsprojektphase vom Verfasser realisiert wurde. Die im Forschungszeitraum erarbeiteten und veröffentlichten Teilergebnisse aus dem Untersuchungskontext werden in den spezifischen Publikationsergebnissen zusammengefasst.