The role of service design as a driver of innovation in the manufacturing industry

This study aims to explore in detail product-related service design practices and the influence of established product design practices on the new service development processes of manufacturing firms that are moving towards service provision. In order to address the challenges associated with market saturation, diverse customer demands, product commoditization and decreasing profit margins, many manufacturing organizations have begun to offer services alongside their products - often referred to as servitization. Research on the implications of the move towards service provision on design practices, specifically within the context of manufacturing firms is scant. This issue requires attention because manufacturing firms have structures and processes that reflect their traditions of product design and development. Hence, service growth and servitization in the manufacturing industry is increasingly relevant to design theory and practice in today's technology-driven and complex, competitive business environment. This research was qualitative in nature and consisted of two main phases. The first phase served as a scoping study, entailing a comprehensive review of literature and nine expert interviews. The scoping study aimed to gain an initial understanding of the subject area being explored and to build an accurate basis for the case-based research. In the second phase, multiple case study method was employed. Using theoretical sampling, six servitizing manufacturing firms were chosen from different industries. The different industry structures conveyed distinct network configurations that support the service business and thereby, distinct types of servitization. Thus, it was expected that the firms might show variation in the ways they use design in their service development efforts, which would then allow a comparative analysis. The selected companies were all leading players in their market, renowned for their high-quality products. Moreover, each provided a range of services alongside their products and allocated considerable amount of resources for new service development. The unit of analysis in each case study was determined as the development process of product-related services that best represented the particular manufacturer's approach to design and service provision. This study made an initial contribution to understand how established product design practices would assist manufacturers in their journey toward service provision. Accumulation of product design expertise and know-how often made manufacturing firms best placed to offer product-related services at an affordable level. Through high-quality products, customer loyalty and trust increased, enabling the creation and provision of long-term service contracts. The findings also suggested that problems that occurred in products could be used as tools for facilitating collaborative idea generation processes for service offerings. Moreover, the analysis of the case study companies revealed twelve recurring design practices in relation to service transition. These were: 1. Redefining the design problem; 2. Collecting and analysing data from customers; 3. Training and recruiting service-aware staff; 4. Redefining roles and responsibilities of the frontline personnel; 5. Documenting design outputs and outcomes; 6. Developing a well-articulated service design strategy; 7. Aligning customer focus across the business; 8. Visually manifesting the parameters and limits of the service offering; 9. Providing alternatives for customers to choose from; 10. Designing tools to facilitate knowledge/idea exchange; 11. Designing means to keep customers informed of service status; and 12. Guiding customers on product and service use. Consequently, the findings of this study provide practical insights for manufacturers that are aiming to pursue growth opportunities through service and system development. Advanced technologies like the IoT are significant tools for manufacturing firms to design new and improved service offerings. By shifting from products to continuous delivery services, manufacturers are able to build longer-term customer relationships in contrast to short-term transactional relationships and gain competitive advantage in their market by locking out competitors. In order to take full advantage of these opportunities, companies need to place emphasis on learning from and adjusting to the service in operation; they should improve their responsiveness to customers; clarify role descriptions; facilitate knowledge-enriched relationships with their partners and customers; and also put mechanisms for internal integration into effect. These factors appear to be critical for successful service design and implementation.