Servitization within manufacturing Exploring the provision of advanced services and their impact on vertical integration

Servitization within manufacturing Exploring the provision of advanced services and their impact... Purpose – The debate about services‐led competitive strategies continues to grow, with much interest emerging around the differing practices between production and servitized operations. The purpose of this paper is to contribute to this discussion by investigating the vertical integration practice (in particular the micro‐vertical integration, otherwise known as the supply chain position) of manufacturers who are successful in their adoption of servitization. Design/methodology/approach – To achieve this the authors have investigated a cross‐section of four companies which are successfully delivering advanced services coupled to their products. Findings – Manufacturers who have embraced the servitization trend tend to retain capabilities in design and production, and do so because this benefits their speed, effectiveness and costs of supporting assets on advanced services contracts. Research limitations/implications – These are preliminary findings from a longer term research programme. Practical implications – Through this research note the authors seek to simultaneously contribute to the debate in the research community and offer guidance to practitioners exploring the consequences of servitization. Originality/value – Successful servitization demands that manufacturers adopt new and alternative practices and technologies to those traditionally associated with production operations. A prevailing challenge is to understand these differences and their underpinning rationale. Therefore, in this research note, the authors report on the practices of four case companies, explore the rationale underpinning these, and propose an hypothesis for the impact on vertical integration of successful servitization. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Manufacturing Technology Management Emerald Publishing

Servitization within manufacturing Exploring the provision of advanced services and their impact on vertical integration

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1741-038X
DOI
10.1108/17410381111160988
Publisher site
See Article on Publisher Site

Abstract

Purpose – The debate about services‐led competitive strategies continues to grow, with much interest emerging around the differing practices between production and servitized operations. The purpose of this paper is to contribute to this discussion by investigating the vertical integration practice (in particular the micro‐vertical integration, otherwise known as the supply chain position) of manufacturers who are successful in their adoption of servitization. Design/methodology/approach – To achieve this the authors have investigated a cross‐section of four companies which are successfully delivering advanced services coupled to their products. Findings – Manufacturers who have embraced the servitization trend tend to retain capabilities in design and production, and do so because this benefits their speed, effectiveness and costs of supporting assets on advanced services contracts. Research limitations/implications – These are preliminary findings from a longer term research programme. Practical implications – Through this research note the authors seek to simultaneously contribute to the debate in the research community and offer guidance to practitioners exploring the consequences of servitization. Originality/value – Successful servitization demands that manufacturers adopt new and alternative practices and technologies to those traditionally associated with production operations. A prevailing challenge is to understand these differences and their underpinning rationale. Therefore, in this research note, the authors report on the practices of four case companies, explore the rationale underpinning these, and propose an hypothesis for the impact on vertical integration of successful servitization.

Journal

Journal of Manufacturing Technology ManagementEmerald Publishing

Published: Sep 11, 2011

Keywords: Competitive strategy; Servitization; Manufacturing industries; Vertical integration; Supply chain management

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