Characterization and empirical analysis of variety-induced costs in integrated product-service systems (PSS)

In this paper a framework for the categorization of cost drivers in product-service systems is presented. Cost drivers were derived in a literature research and allocated to the corresponding categories within the product or service domain. The significance of the identified cost drivers was validated by an empirical study analyzing the impact of cost drivers on the organization. The study particularly focused on companies providing a portfolio that was combined by products and services. Moreover, companies were grouped into companies providing a product-dominated portfolio, a service-dominated portfolio and a balanced portfolio of products and services with equal importance. The results indicate that variety-induced costs for products predominantly occur in activities in Sales, Engineering and Quality Assurance, while service provision, for instance, is affected by short-term changes and coordination efforts.