Product support strategy: conventional versus functional products

Abstract

Purpose -Most advanced durable industrial products need some kind of support to compensate for weaknesses in design or in product exploitation. Aims to examine different scenarios for product support and discusses approaches for development of product support strategy for conventional and functional products. Design/methodology/approach -The paper is based on a case study of a manufacturer of advanced durable industrial production systems. Findings -Traditionally, the customer buys, operates, and maintains equipment used in production systems. Alternatively, the customer can buy the performance, instead of the physical product. In such cases, the manufacturer is responsible for operating, maintaining, and supporting the product in addition to designing and making it. Thus, the long-term profit for both user and manufacturer will depend on the product's designed-in life cycle costs, RAMS (reliability, availability, maintainability and supportability) characteristics, as well as on the effectiveness and efficiency of the product exploitation and support processes. In general, product support is a source of income for the manufacturer. In a functional product scenario, the need for product support is a liability and a cost driver for the manufacturer. Hence, delivery of performance requires a fundamentally different approach for product support strategy. Originality/value -An examination of different scenarios and different approaches for manufacturers' product support strategies.

Solutions offerings: a critical review and reconceptualisation

“…Markeset and Kumar (2005) discuss functional products, defined as -delivery of performance‖ (p. 54), by which they mean that the customers do not buy the industrial product, system or machinery, but instead buy such performance criteria as drilled metre per shift or volume per hour. Stremersch et al (2001) define a full service as -a comprehensive bundle of products and/or services, that fully satisfies the needs and wants of a customer related to a specific event or problem‖ (p. 1).…”

Performance indicators and terminology for value driven maintenance

“…Markeset and Kumar [10] have listed examples of cost drivers; unplanned maintenance, process bottlenecks, equipment with high energy requirements, potential liability issues, operational and/or maintenance costs, training costs, facility costs, disposal costs, etc.…”

The missing link between maintenance contracts and flexible asset management

“…This point, although on a more general level, is also recognized by MacCarthy and Jayarathne (2012). Markeset and Kumar (2005) state that it has become more common for the service provider, not the customer, to own the physical assets. What remains quite unexplored, however, are the profitability impacts of the assets being included in the service provider's balance sheet.…”