The Value and Management Practices of Installed Base Information in Product-Service Systems

Abstract

Increasing competitive pressures have pushed manufacturers to increase the value of their offerings through the provision of Product-service systems. This shift results in an increased complexity of offerings and a higher degree of risk and responsibility taken by manufacturers concerning product availability, performance and product-enabled processes. The paper investigates the impact and potential benefits of installed base information management practices on the offering of Product-Service Systems. A case study concerning an underwater system in a cruise vessel is presented: the data collected were used to develop a simple decision analysis tree, which allows to estimate the value of installed base information in the studied case.

RFM customer analysis for product-oriented services and service business development: an interventionist case study of two machinery manufacturers

“…On the other hand, the examination of the customer behavior regarding the maintenance service activities and other operations may provide useful insights into developing new service businesses, in more advanced service 1 3 RFM customer analysis for product-oriented services and service… categories (Ala-Risku 2009; Ulaga and Reinartz 2011). This is in line with the idea of Saccani et al (2012), who suggested the examination of the potential value of the installed base information in managing current service businesses and support the development of new, more complex service offerings. Therefore, the paper examines the potential of RFM analyses both in managing productoriented service activities and in identifying new service business opportunities.…”

“…Our interventionist case studies from FleetCo and ProcessCo showed that there is indeed potential in using installed base information for OEMs' service business development (Ala-Risku 2009;Holmström et al 2010;Saccani et al 2012;Perminova-Harikoski et al 2015). In particular, the refined RFM analysis, as presented and preliminarily used in the cases of this paper, responds to the need for relatively simple, yet comprehensive tools for better understanding the value generation dynamics within service activities in OEMs (as suggested also by Laine et al 2012b).…”

“…1, the traditional RFM analysis is based on R, F, and M variables that describe a customer's buying behavior. As the literature has recognized the potential of the installed base information in understanding the value of manufacturers' service businesses from multiple perspectives (Ala-Risku 2009; Holmström et al 2010;Saccani et al 2012;Laine et al 2012b;Perminova-Harikoski et al 2015), the tentative framework adds special variables describing the features of a particular customer's installed base and its product-oriented service consumption (Fleet characteristics) to the traditional RFM analysis. FleetCo's and ProcessCo's case studies are used next to supplement this tentative framework, and to further examine, whether the traditional RFM analysis and fleet characteristics together could reveal customers' behavior regarding the productoriented services and help OEMs identify their wider service business potential.…”

“…There are indications that management accounting practices that focus on spare parts business do not exist in many companies (Wagner and Lindemann 2008). In addition, manufacturing companies lack tools and techniques for steering their service business activities (Baines et al 2009;Laine et al 2012a), despite the potentials in using installed base information and other information sources for this purpose (see e.g., Ala-Risku 2009;Holmström et al 2010;Saccani et al 2012; 1 3 RFM customer analysis for product-oriented services and service… Perminova-Harikoski et al 2015). Creating supportive information for decision makers represents a challenge for many companies because information is scattered in different systems and forms (Lindholm et al 2017).…”

Elements of installed base information value

“…These savings are due to lower stock requirements and reduction in transportation costs. Saccani et al [17] applied a decision-analysis-tree approach to evaluate the value of IBI in an underwater system in a cruise vessel.…”