Types of product-service system within a servitisation strategy

This is next in our series of blogs on servitisation, providing ‘everything you need to know’ on this topic. Many authors argue that this strategy is about creating what is now termed a product-service system (PSS). There are our basic types of PSS. These are:

  1. Integration oriented PSS – is the movement down stream in the supply chain by taking on service activities previously undertaken by distributors or retailers. The manufacturer’s product is still purchased by the customer, but the manufacturer adds on other services the customer may need, such distribution, logistics, and retail services.
  2. Product oriented PSS – the customer adopts ownership of the product, but the manufacturer provides additional support services. For instance, Xerox provides so-called asset management services wherein they will care for the product throughout its useful life and recycle it at the end of its working life.
  3. Use oriented PSS – where ownership of the tangible product is retained by the service provider, who sells the functions of the product, via modified distribution and payment systems, such as sharing, pooling, and leasing e.g. RR power by the hour.
  4. Result oriented PSS – where products are replaced by services, such as, for example, voicemail replacing answering machines. This is also used in the chemical industry, wherein customers contract for cleaning services rather than purchase chemicals.
This entry was posted in Chap 14 Operations strategy, Sector: Manufacturing and tagged , , . Bookmark the permalink.

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