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Purpose – The purpose of this paper is to propose a conceptual framework for product service system (PSS) design for machine tools and discuss the PSS implementation issues focusing on the Indian machine tool business sector. Design/methodology/approach – The paper opted for an exploratory survey conducted in the Indian machine tool sector including 39 in-depth interviews with employees of different organizations representing middle and senior management having decision-making authority. It also involves proposing a framework to address the stakeholder’s requirements for services that offers foundation for PSS designers. Findings – The paper helps get an insights about key issues for PSS implementation by the Indian machine tool sector. The hybrid PSS model proposed in the paper can address the stakeholder’s requirements for flexibility in business models through different business phases. Practical implications – The paper offers suggestions for the development of PSS for machine tools for designers and identify issues to be considered particularly in Indian machine tools business context. Originality/value – This paper provides an insight to judge the feasibility of PSS concept for machine tools in Indian context and offers framework for PSS designers.

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Service system design process is complex in nature and involves many stakeholders. The process becomes more critical in the context of machine tools due to market competition, complexity of services, competency requirements and cost constraints. The objective of this paper is to propose a generic approach for the design of a service system for machine tools which can support a variety of business models along with meeting customers' demand for flexibility. The proposed approach makes use of fundamental service design steps and offers flexibility to the customers to choose the services, service mechanisms, service levels and service frequencies as per their requirements considering the economic aspects, and thus underlines the involvement and participation of customers in the service design process. It also facilitates service designers to visualize the roles of stakeholders involved in the service process and highlights the importance of customer involvement for customer service assurance and better service experience. Application of the approach is discussed through a case study conducted in association with a leading Indian machine tool manufacturing group.

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