Industrial Product-Service System
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Industrial Product-Service System Horst Meier* and Henning Lagemann Fakult€at f€ ur Maschinenbau/Lehrstuhl f€ ur Produktionssysteme, Ruhr-University Bochum, Bochum, Germany
Synonyms Integrated product-service offering (IPSO); Integrated solutions; Product-service system (PSS); Technical product-service system (technical PSS)
Definition An industrial product-service system (IPS2) is characterized by the integrated and mutually determined planning, development, provision, and use of products and services including immanent software. IPS2 are offered in business-to-business markets; they address industrial applications only. An IPS2 represents a knowledge-intensive socio-technical system (Meier et al. 2010). An IPS2 is a customized solution, which comprises products, services, and immanent software in an integrated manner in order to deliver a particular value instead of a pure functionality to industrial customers. Hence, an IPS2 aims at replacing product-focused business strategies by use-oriented strategies. Consequently, all physical and nonphysical components of IPS2 need to be planned, developed, and operated together, considering all interdependencies between the components. During the provision of IPS2, provider abilities need to be adaptable to dynamically changing customer requirements (Meier et al. 2010).
Theory and Application History and Related Research The oldest known example of an IPS2 is the steam engine developed and offered by James Watt and Matthew Boulton from 1775 onward. Instead of selling steam engines, they assembled and maintained the steam engine free of charge and derived their profits from the customers’ annual savings compared to the previous, less efficient steam engine, which had a much higher coal consumption. In literature, the paradigm change toward product-service integration originates from the research on the servitization of manufacturing, which was initialized by Vandermerwe and Rada in 1988. They described servitization as the increased offering of “fuller market packages or “bundles” of customer-focused combinations of goods, services, support, self-service, and knowledge,” in which “service is beginning to dominate” (Vandermerwe and Rada 1988). During the last two decades, the development of manufacturers to service providers has received an increasing attention in various scientific disciplines. Hence, a multitude of terms has emerged in different scientific fields to describe the concept of integrated products and services: product-related services, integrated solutions, customer solutions, dematerialization, integrated product-service offering, extended *Email: [email protected] Page 1 of 6
CIRP Encyclopedia of Production Engineering DOI 10.1007/978-3-642-35950-7_14-5 # CIRP 2014
products, and functional products. The topic has also become more important from the perspective of life cycle management. In this context, uncertainties and risks due to a stronger service orientation and long-term partnerships are of great importance (Erkoyuncu et al. 2011). In Germ
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