Order qualifier and order winner

Topics: Manufacturing, Lean manufacturing, Toyota Production System Pages: 21 (3995 words) Published: December 26, 2013
Abstract no 020-0134
A lean perspective on servitization of manufacturing
Mats Winroth
Dept of Industrial Management and
Economics, Division of Operations
Management, Chalmers University of
Technology
SE-412 96 Göteborg, Sweden
Phone: +46 31 772 12 17
E-mail: mats.winroth@chalmers.se

Glenn Johansson
Dept. of Industrial Engineering and
Management, School of Engineering
Jönköping University
P.O. Box 1026
SE-551 11 Jönköping, Sweden
Phone: +46 36 10 16 34
E-mail: glenn.johansson@jth.hj.se

POMS 22nd Annual Conference, Reno, Nevada, USA, Apr 29 to May 2, 2011 Track title: Quality, Processes and JIT

Abstract
Servitization of manufacturing is a fairly recent approach addressed in literature. The term is recognized as the process of creating value by integrating products with services. Servitization is supposed to contribute to a sustainable society through its potential to support dematerialization, i.e. reduction of materials used in production and consumption. Key aspects of lean are resource efficiency and customer-orientation. Though lean production has gained a high degree of attention, few studies have addressed the potential relationships between lean and servitization. Servitization is however not only relevant from a sustainability perspective, but can be regarded as “the next step” to create user value. This paper aims at providing a better understanding of the relationships between lean and servitization through an analysis of literature where the lean and servitization approaches are compared and contrasted. The underlying assumption is that a lean approach might support a manufacturing organization’s transition towards a servitization organization.

Keywords: Servitization, Product-service systems, Lean, Sustainability

1.

Introduction

Servitization has been around for many years, trying to combine products and service into attractive packages (Tukker and Tischner, 2006). Though different definitions appear in the literature such as product-service systems (PSS), functional products, or integrated solutions (e.g. Mont, 2004; Windahl and Lakemond, 2006; Baines et al, 2009a; Baines et al, 2009b; Sakao et al, 2009), the concept refers to combinations of products and services. This combination of product and service enables the provider to deliver extra value to the customers thus competing by more than merely cost (Porter and Ketels, 2003). Servitization can provide improvements in revenue and profit margins, a closer customer relationship as well as better understanding of customer needs and requirements (Neely, 2007). Servitization makes, through the integration of products and services, the offer more complex. As a consequence, the customer may be more depending on the supplier

and tends not to switch to a competing supplier unless the delivery is extremely poorly provided. Companies that have done this transition towards servitization over the years are e.g. IBM, going from a very high hardware focus to business solutions, and SKF, who sells not only bearings but the whole technical solution including service and maintenance.

Given the situation that servitization has attracted increasing attention among scholars and industry, surprisingly little attention is devoted to how it relates to manufacturing strategy. One exception is presented by Baines et al (2009a) who, based on a literature study combined with a case study, outline a framework in which operations strategy is linked to servitization. However, this framework is rather generic and thus does not address specific production philosophies. Therefore, this paper sets out to investigate links between the Lean production philosophy and servitization. More precisely, by taking the starting point in manufacturing decision criteria elaborated from Hayes and Wheelwright (1984), an analysis of the links is presented.

The paper is stuctured as follows. First, the method uses is introduced and then we briefly describe the...

References: Acur, N., Gertsen, F. and Boer, H., 2003, IMSS Danish Report, Aalborg University,
Aalborg.
Baines, T., Lightfoot, H., Benedettini, O., and Kay, J.M., 2009a, The servitization of
manufacturing: A review of literature and reflection on future challenges
Baines, T., Lightfoot, H., Peppard, J., Johnson, M., Tiwari, A., Shehab, E., and Swink,
M., 2009b, Towards an operations strategy for product-centric servitization
Bates, K., Blackmon, K., Flynn, E.J. and Voss, C., 2001, Manufacturing Strategy:
Building Capability for Dynamic Markets, in High Performance Manufacturing: Global
Dangayash, G.S. and Deshmukh, S.G., 2001, Manufacturing Strategy: Literature Review
and Some Issues, International Journal of Operations & Production Management, vol.
Feld, W.M., 2001, Lean Manufacturing – Tools, Techniques, and How To Use Them, The
CRC Press Series on Resource Management, ISBN 1-57444-297-X.
Hayes, R.H. and Wheelwright, S.C., 1984, Restoring Our Competitive Edge: Competing
Through Manufacturing, Wiley, NY, USA.
Hill, T.J., 1995, Manufacturing Strategy: Text and Cases (2nd ed.), Irwin/McGraw-Hill,
USA.
Lindström, V., 2008, Formulation of Automation Strategy in Manufacturing Systems:
Developing a Methodology for Analysing and Choosing Levels of Automation, PhD
Marucheck, A., Pannesi, R. and Anderson, C., 1992, An exploratory study of the
manufacturing strategy process in practice, in Manufacturing Strategy Process and
Miltenburg, J., 1995, Manufacturing Strategy – How to Formulate and Implement a
Winning Plan, Productivity Press, Portland, USA.
Martinez, V., Bastl, M., Kingston, J., and Evand Stephen. (2010) Challenges in
tranforming manufacturing organisations into product-service providers
Mont, O.K., 2004, Clarifying the concept of product-service system, Journal of Cleaner
Production, Vol
Neely, A.D., 2007, The servitization of manufacturing: An analysis of global trends,
proceedings of the 14th EurOMA Converence, Ankara, Turkey.
Oliva, R. and Kallenberg, R., 2003), Managing the transition from products to services,
International Journal of Service Industry Management, Vol
Platts, K.W., 1994, Characteristics of methodologies for manufacturing strategy
formulation, Computer Integrated Manufacturing Systems, vol
Platts, K.W. and Gregory, M.J., 1992, A manufacturing audit approach to strategy
formulation, in Manufacturing Strategy Process and Content, Voss, C
Porter, M. and Ketels, C., 2003, UK Competitiveness: Moving to the Next Stage. London:
Department of Trade and Industry.
Ritzén, S., Ölundh, G, 2002, Funktionsförsäljning och produkters miljöpåverkan: en
studie i tre svenska tillverkningsföretag, Rapport 5234, Naturvårdsverket 2002 (in
Sakao, T., Ölundh Sandström, G., Matzen, D., 2009, Framing research for service
orientation of manufacturers through PSS approaches
Skinner, W., 1969, Manufacturing-missing link in corporate strategy, Harvard Business
Review, May-June.
Sundin, E., Lindahl, M., and Ijmah, W., 2007, Product design for product/service
systems: Design experiences from Swedish industry, Journal of Manufacturing
Swink, M. and Way, M.H., 1995, Manufacturing strategy: propositions, current research,
renewed directions, International Journal of Operations & Production Management, Vol.
Säfsten, K., Winroth, M. and Stahre, J., 2007, The content and process of automation
strategies, International Journal of Production Economics, Vol
Tukker, A., 2004, Eight types of product service system; eight ways to sustainability?
experiences from SUSPORNET
Tukker, A. and Tischner, U., 2006, Product-services as a research field: past, present and
future
pp. 1552-1556.
Windahl, C. and Lakemond, N., 2006, Developing integrated solutions: The importance
of relationships within the network
Womack J.P., Jones, D.T. and Roos, D., 1990, The Machine That Changed the World,
Rawsons Associates, NY.
Womack, J.P. and Jones, D.T., 1996, Lean Thinking, Simon & Schuster, NY.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Order Winner & Order Qualifier Essay
  • Order Winners and Order Qualifiers Essay
  • Essay about Order-Winners and Order-Qualifiers
  • Tqm
  • Order Qualifiers and Order Winners for Toyota Essay
  • order Essay
  • Order-Winning and Order-Qualifying Criteria Essay
  • Essay on Made to Order

Become a StudyMode Member

Sign Up - It's Free