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Product/Service Orientation
Thomas J. Howard
thow@mek.dtu.dk
Main Contributions from: Tim C. McAloone, Niki Bey & Krestine Mougaard


                         Unless otherwise stated, this material is under a Creative
                         Commons 3.0 Attribution–Share-Alike licence and can be
                         freely modified, used and redistributed but only under the
                         same licence and if including the following statement:
“Original material created for the PROTEUS project and adapted for course
42629, Innovation and Product Development Department of Mechanical
Engineering, DTU”
In your teams discuss the following
 scenario:

     “You have been developing and selling
       microwave ovens for many years and
      have seen profits steadily falling due to
    increase competition. How could you add
    a service dimension to your business and
     what market segment would you target?



2      Material provided by Tim C. McAloone and adapted for course 42629,             2012
       Innovation and Product Development Department of Mechanical Engineering, DTU
Product/Service Orientation


     PRODUCT                            USE                                  RESULT
     • Product related                  • Product lease                      • Activity management
     service
                                        • Product renting                    • Functional unit
     • Product related
                                        • Pay per service unit
     consultancy




    PRODUCT                                                                    SERVICE
    ORIENTATION                                                                ORIENTATION

                                                                         Based on Tukker & Tischner 2006




3     Material provided by Tim C. McAloone and adapted for course 42629,                             2012
      Innovation and Product Development Department of Mechanical Engineering, DTU
Product/Service Orientation




4   Material provided by Tim C. McAloone and adapted for course 42629,             2012
    Innovation and Product Development Department of Mechanical Engineering, DTU
Product Life & User Activity Cycles
                                                                                PRODUCT’S LIFE CYCLE


                           RAW MATERIALS



                                           MANUFACTURE




                                                                                                                          MAINTENANCE
                                                                                             INSTALLATION
                                                                    TRANSPORT
                                                         ASSEMBLY




                                                                                                                                        DISPOSAL
                                                                                     SALES




                                                                                                                 USE
    Tan, A., McAloone, T.C., Andreasen, M., “What
    happens to integrated product development Models
    with product/service-system approaches?”, The 6th
    Integrated Product Development workshop, 2006



                                                                                                            SUPPORT OF
                                                                                                            CUSTOMER’S
                                                                                                             ACTIVITIES
                                                                    CUSTOMER’S
                                                                     ACTIVITY
                                                                       CYCLE




5              Material provided by Tim C. McAloone and adapted for course 42629,                                                                  2012
               Innovation and Product Development Department of Mechanical Engineering, DTU
Strategies of Service Design




                                                                         Customer      Business
                                                   Product life          activity      supporting
                              Product use          services              services      services
                              services                                   •Training     •Consulting
                                                   •Supplies
                              •Maintenance                               •Planning     •Financing
                                                   •Installation
                              •Repair                                    •Designing    •Managing
                                                   •Auxiliary input
                              •Spare parts                               •Specifying   •Partnering
                                                   •Upgrade
            Product           •Warranty                                  •Operating    •Outsourcing
                                                   •Disposal
                                                                         •Measuring
                       Design for Serviceability
                       [Dewhurst 1994]

                                 Design for Supportability
                                 [Goffin, 2000][Takata et al. 2004]

                                                          Design for Service
                                                          [Harrison, 2006]




6   Material provided by Tim C. McAloone and adapted for course                                       2012
    42629,      Innovation and Product Development Department of Mechanical
Strategies for Service Design




7   Material provided by Tim C. McAloone and adapted for course               2012
    42629,      Innovation and Product Development Department of Mechanical
Designing a PSS
    We need to adopt new approaches for making substantial changes:
       – For the end-user:

               o New patterns of usage, lifestyle, purchasing and flexibility

        –   For the producing company:
                  o Maintain contact, supply, maintenance, upgrading, disposal, and
                    recycling of the product
                  o See utilisation of the product as the delivered service
                  o Realise new ownership patterns such as renting, leasing, service-
                    contracts, etc.
                  o Identify new markets and greater share by re-defining core business

        –   For society:
                 o  Increased product efficiency (due to the producing company having
                    increased liability for-, insight into- and ownership over the product)
                 o  A closer relationship between social needs and the products that
                    industry supplies (due to the voice of the customer being louder and
                    clearer than before)

8            Material provided by Tim C. McAloone and adapted for course                      2012
             42629,      Innovation and Product Development Department of Mechanical
PSS can be an effective way to bring
     suppliers closer to customers while
     responding more to the customer’s
                  real needs.

     Services should be integrated into
       the design of products where
                 valuable.

9      Material provided by Tim C. McAloone and adapted for course               2012
       42629,      Innovation and Product Development Department of Mechanical
Questions




                                               ?
10   Material provided by Tim C. McAloone and adapted for course               2012
     42629,      Innovation and Product Development Department of Mechanical
Exercise


In your project teams, try to synthesise at
 least 3 PSS business configurations that
 for you business ideas.

Try to consider what, where, when and
 how your customers would pay for your
 offerings.



11   Material provided by Tim C. McAloone and adapted for course               2012
     42629,      Innovation and Product Development Department of Mechanical

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42629 lecture 2 pt4

  • 1. Product/Service Orientation Thomas J. Howard thow@mek.dtu.dk Main Contributions from: Tim C. McAloone, Niki Bey & Krestine Mougaard Unless otherwise stated, this material is under a Creative Commons 3.0 Attribution–Share-Alike licence and can be freely modified, used and redistributed but only under the same licence and if including the following statement: “Original material created for the PROTEUS project and adapted for course 42629, Innovation and Product Development Department of Mechanical Engineering, DTU”
  • 2. In your teams discuss the following scenario: “You have been developing and selling microwave ovens for many years and have seen profits steadily falling due to increase competition. How could you add a service dimension to your business and what market segment would you target? 2 Material provided by Tim C. McAloone and adapted for course 42629, 2012 Innovation and Product Development Department of Mechanical Engineering, DTU
  • 3. Product/Service Orientation PRODUCT USE RESULT • Product related • Product lease • Activity management service • Product renting • Functional unit • Product related • Pay per service unit consultancy PRODUCT SERVICE ORIENTATION ORIENTATION Based on Tukker & Tischner 2006 3 Material provided by Tim C. McAloone and adapted for course 42629, 2012 Innovation and Product Development Department of Mechanical Engineering, DTU
  • 4. Product/Service Orientation 4 Material provided by Tim C. McAloone and adapted for course 42629, 2012 Innovation and Product Development Department of Mechanical Engineering, DTU
  • 5. Product Life & User Activity Cycles PRODUCT’S LIFE CYCLE RAW MATERIALS MANUFACTURE MAINTENANCE INSTALLATION TRANSPORT ASSEMBLY DISPOSAL SALES USE Tan, A., McAloone, T.C., Andreasen, M., “What happens to integrated product development Models with product/service-system approaches?”, The 6th Integrated Product Development workshop, 2006 SUPPORT OF CUSTOMER’S ACTIVITIES CUSTOMER’S ACTIVITY CYCLE 5 Material provided by Tim C. McAloone and adapted for course 42629, 2012 Innovation and Product Development Department of Mechanical Engineering, DTU
  • 6. Strategies of Service Design Customer Business Product life activity supporting Product use services services services services •Training •Consulting •Supplies •Maintenance •Planning •Financing •Installation •Repair •Designing •Managing •Auxiliary input •Spare parts •Specifying •Partnering •Upgrade Product •Warranty •Operating •Outsourcing •Disposal •Measuring Design for Serviceability [Dewhurst 1994] Design for Supportability [Goffin, 2000][Takata et al. 2004] Design for Service [Harrison, 2006] 6 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical
  • 7. Strategies for Service Design 7 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical
  • 8. Designing a PSS We need to adopt new approaches for making substantial changes: – For the end-user: o New patterns of usage, lifestyle, purchasing and flexibility – For the producing company: o Maintain contact, supply, maintenance, upgrading, disposal, and recycling of the product o See utilisation of the product as the delivered service o Realise new ownership patterns such as renting, leasing, service- contracts, etc. o Identify new markets and greater share by re-defining core business – For society: o Increased product efficiency (due to the producing company having increased liability for-, insight into- and ownership over the product) o A closer relationship between social needs and the products that industry supplies (due to the voice of the customer being louder and clearer than before) 8 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical
  • 9. PSS can be an effective way to bring suppliers closer to customers while responding more to the customer’s real needs. Services should be integrated into the design of products where valuable. 9 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical
  • 10. Questions ? 10 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical
  • 11. Exercise In your project teams, try to synthesise at least 3 PSS business configurations that for you business ideas. Try to consider what, where, when and how your customers would pay for your offerings. 11 Material provided by Tim C. McAloone and adapted for course 2012 42629, Innovation and Product Development Department of Mechanical