Design and Product Development Guest Lecture at Tallinn European Innovation Academy Thomas J. Howard www.thomasjhoward.com [email protected] 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 by Tim C. McAloone and adapted by Thomas J. Howard, The Technical University of Denmark”
EIA pt.2 - PSS
May 15, 2015
Product/Service-Systems lecture at the European Innovation Academy 2012, Tallinn
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Design and Product DevelopmentGuest Lecture at Tallinn European Innovation Academy
Thomas J. [email protected]
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 by Tim C. McAloone and adapted by Thomas J. Howard,The Technical University of Denmark”
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Agenda
09:30 – Integrated Product Development10:05 – Exercise10:20 – Break and discussion
10:30 – Product/Service-Systems (PSS)10:05 – Exercise11:20 – Break and discussion
11:30 – Open Design11:05 – Exercise11:20 – Discussion
LUNCH
13:00 – Protovation13:45 – Exercise
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Products and Services
What is a Product?
What is a Service?
Use the terms Value and Stakeholder in your definitions
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Definitions
Product• The result of a synthesis process, where value is
created by transferring ownership of the result from one stakeholder to the next.
Service• The creation of value when one stakeholder
carries out an activity on behalf of another.
McAloone 2012
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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A Product/Service-System is a system that supports and utilises the product through an extended (for the company) product life period
Service only exists when the customer uses it!
What is a PSS?
Product life cycle
Customer,User
Service:- selling use and functions
Service provider
Product
Product development
McAloone & Andreasen 2002
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Producer’s traditional responsibility/liability
Traditional producer ownership Traditional customer ownership
€
Why PSS ?
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Producer’s extended product responsibility, customer contact and revenue source
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Product life cycle design
PSS-oriented business strategy
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Why PSS ?
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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PSS means making a shift of business focus, from:
business based on value creation through the transfer of product ownership and -responsibility
to:
business based on value creation through the support and delivery of a service from a product, for the whole of its lifetime…
PSS as a business strategy
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Rolls RoyceFrom airplane engines to ’power-by-the-hour’
In the airline industry, the company does not sell engines - it charges for use of the thrust they provide, on a 'power by the hour' basis. Where previously the company's aerospace arm simply sold engines to plane companies, they now offer a fixed-fee maintenance back-up service for those engines, thus allowing customers to accurately project their maintenance and part replacement costs.
[www.rolls-royce.com]
[www.rolls-royce.com]
Traditional model
Core business:passenger
revenues
Rolls-Royce
Airline
OverhaulBase
Eng. Health Monitoring
LogisticsProvider
Vendors
Non-core business activities
TotalCare model
Focus on core business
Rolls-Royce responsible forairline’s non-core business activities
OverhaulBase
LogisticsProvider
Vendors
Airline
Rolls-Royce
Predictive maintenance
TotalCare model
Focus on core business
Rolls-Royce responsible forairline’s non-core business activities
OverhaulBase
LogisticsProvider
Vendors
Airline
Rolls-Royce
Predictive maintenance
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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DanfossFrom electronic refrigeration controls to cooling in supermarketsIn order to avoid being reduced to a component supplier (where competition is tough and margins slim) Danfoss has positioned itself as a provider of value added consultant advice to the food retail industry. By tying a closer link to the retailer Danfoss can increase knowledge about operational know-how.
[www.danfoss.com]
Systems
Networks
Components
Value
Added
Services
[Eriksen, Danfoss, 2005]
OEM’s
ContractorsOEM’s
System
house Contractors
End-Users Supermarkets
Distribution
channel
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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XeroxFrom photocoping machines to document services
Xerox has worked to turn its product into a service, providing a complete "document service" to companies including supply, maintenance, configuration, and user support. Customer’s don’t buy photocopy machines anymore, the buy the ability to photocopy.
[www.xerox.com]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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AarstiderneFrom organic produce to convenient food delivery
Aarstiderne has delivered organic products to the doorsteps of Danish households since 1999. It started out as a small vegetable garden at a farm, Barritskov, in the western part of Denmark. The idea behind Aarstiderne.com is to deliver organic food products directly to the doorstep of the customer who values quality and taste and thereby catalyses the public motion towards healthier food and better environment in Denmark – not by agitating, but simply by enabling everybody to be a part of the good idea. The products are supplied with recipes and stories about growers, production, farms, the company, food products and quality.
[www.aarstiderne.com]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Douwe EgbertsFrom coffee bean supplier to coffee systems
Douwe Egberts was originally a coffee supplier. Normally clients in offices would buy a traditional hot plate-based coffee machine, buy consumables such as coffee and filters separately, and make pots of coffee in the traditional way. Douwe Egberts took the advantage by starting to offer coffee systems delivering freshly brewed, good-quality coffee per cup and thereby created a much more powerful position in the value chain.
[www.douweegberts.com]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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IBMFrom computers to consulting services
Traditionally IBM’s business was in manufacturing computer hardware but over the years they have moved to a more business and software consulting service approach. This was particularly noticeable with the sale of their personal computers to Chinese manufacturer Lenovo in 2004
[www.ibm.com]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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DuPontFrom paint to painted cars
Payment by paint quality:
Reward: selling more paint
No action concerning painting
Flexible delivery
Quality of painted surface
Cost of painting
Payment per car:
Concern of reducing quantity
Immediate delivery
Quality of the painted surface
Immediate satisfaction
No action concerning painting
DuPont
Ford
DuPont
FordDuPont painting
Ford producing
Ford painting
Ford producing
DuPont
Customer: Long-term interest of qualityfrom satisfaction delivery system [McAloone, 2003]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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easyJetFrom 3rd party booking to direct booking service
easyJet is perhaps more renowned for its ‘lack of’ or ‘no frills’ approach to service. However, in the late 90’s, airliners were running a very standard business model providing service in a ‘complementary’ form rather than a extra revenue form. easyjet were able to strip this service and translate it to low costs, something a large proportion of the market valued greatly. But more importantly easyjet were able to harness web bookings enabling them to provide a service to their customers that, at the time, was only available through 3rd party travel agents and thus dramatically reduced costs, prompting their slogan “the web’s favorite airline”.
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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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 increased competition. How could you
add a service dimension to your business and what market segment would you
target?
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Product/Service Orientation
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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SUPPORT OF CUSTOMER’SACTIVITIES
CUSTOMER’S ACTIVITY
CYCLE
PRODUCT’S LIFE CYCLE
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Product Life & User Activity Cycles
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
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Strategies of Service Design
Product
Product use services• Maintena
nce
• Repair
• Spare parts
• Warranty
Product life services• Supplies
• Installation
• Auxiliary input
• Upgrade
• Disposal
Customer activity services• Training
• Planning
• Designing
• Specifying
• Operating
• Measuring
Business supporting services• Consulting
• Financing
• Managing
• Partnering
• Outsourcing
Design for Serviceability [Dewhurst 1994]
Design for Supportability[Goffin, 2000][Takata et al. 2004]
Design for Service[Harrison, 2006]
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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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.
2012Original material by Tim C. McAloone and adapted Thomas J. HowardThe Technical University of Denmark
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Questions
?
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