Service, services and products: rethinking operations strategy

Purpose – This paper proposes a new approach to operations and supply strategy in the light of recent developments in the analysis of the respective roles of products and services in delivering benefits to customers.Design/methodology/approach – Reviews and synthesises concepts from operations management (OM), marketing, economics and related areas. Examples of product and service combinations are considered, drawing attention to the ways in which services may be distinguished from products. An institutional basis for defining services is favoured over IHIP. A corollary of this is how services are made tradable: the modularity theory of the firm is used to do this. The paper then outlines, considers and compares various approaches to the combination of products and services: “service‐dominant logic”, support services, product‐service systems, systems integration, performance‐based logistics, bundling and, finally, the notion of “the offering”.Findings – It is found that the notion of the business model is...

[1]  R. Schmenner.  Manufacturing, service, and their integration: some history and theory , 2009 .

[2]  Robert H. Hayes,et al.  CHALLENGES POSED TO OPERATIONS MANAGEMENT BY THE “NEW ECONOMY” , 2009 .

[3]  Eli M. Snir.  LIABILITY AS A CATALYST FOR PRODUCT STEWARDSHIP , 2001 .

[4]  Deborah L. Kellogg,et al.  HOW PROFESSORS OF OPERATIONS MANAGEMENT VIEW SERVICE OPERATIONS? , 1999 .

[5]  Stephen L. Vargo,et al.  Service-dominant logic: continuing the evolution , 2008 .

[6]  Robert H. Hayes,et al.  Pom Forum: Operations Management's Next Source of Galvanizing Energy? , 2008 .

[7]  Stephen L. Vargo,et al.  Reconfiguration of the conceptual landscape: a tribute to the service logic of Richard Normann , 2008 .

[8]  Rohit Verma,et al.  History of offshoring knowledge services , 2008 .

[9]  Stephen L. Vargo,et al.  Why “service”? , 2008 .

[10]  Chris Arney.  Wikinomics: How Mass Collaboration Changes Everything , 2008 .

[11]  R. Amit,et al.  The fit between product market strategy and business model: implications for firm performance , 2008 .

[12]  Scott E. Sampson,et al.  Foundations and Implications of a Proposed Unified Services Theory , 2006 .

[13]  Carliss Y. Baldwin,et al.  Where do transactions come from? Modularity, transactions, and the boundaries of firms , 2007 .

[14]  Serguei Netessine,et al.  Performance Contracting in After-Sales Service Supply Chains , 2007, Manag. Sci..

[15]  T S Baines,et al.  State-of-the-art in product-service systems , 2007 .

[16]  William W. Fisher.  Promises to Keep: Technology, Law, and the Future of Entertainment , 2007 .

[17]  Lisa M. Ellram,et al.  An operations management view of the services and goods offering mix , 2007 .

[18]  Stephen L. Vargo,et al.  Competing through service: Insights from service-dominant logic , 2007 .

[19]  Don Tapscott,et al.  Wikinomics: How Mass Collaboration Changes Everything , 2006 .

[20]  L. Araujo,et al.  Services, products, and the institutional structure of production , 2006 .

[21]  James C. Spohrer,et al.  A research manifesto for services science , 2006, CACM.

[22]  Paul P. Maglio,et al.  Service systems, service scientists, SSME, and innovation , 2006, CACM.

[23]  Carliss Y. Baldwin,et al.  Where Do Transactions Come From? A Network Design Perspective on the Theory of the Firm , 2006 .

[24]  R. Langlois,et al.  The Secret Life of Mundane Transaction Costs , 2006 .

[25]  Arie Y. Lewin,et al.  Offshoring administrative and technical work: business hype or the onset of fundamental strategic and organizational transformation ? , 2006 .

[26]  Paul H. Zipkin.  OM ForumThe Best Things in Life Were Free: On the Technology of Transactions , 2006, Manuf. Serv. Oper. Manag..

[27]  Stephen L. Vargo,et al.  Taking a Leadership Role in Global Marketing Management , 2006 .

[28]  T. Davenport.  The coming commoditization of processes. , 2005, Harvard business review.

[29]  Kenneth H. Doerr,et al.  MEASUREMENT ISSUES IN PERFORMANCE-BASED LOGISTICS , 2005 .

[30]  S. Croom.  The impact of e‐business on supply chain management , 2005 .

[31]  G. J. Lewis,et al.  The transformation of the music industry supply chain: A major label perspective , 2004 .

[32]  A. Davies.  Moving base into high-value integrated solutions: a value stream approach , 2004 .

[33]  O. Mont.  Institutionalisation of sustainable consumption patterns based on shared use , 2004 .

[34]  C. Jackson,et al.  Goods and services , 2019, Global Political Economy.

[35]  Stephen L. Vargo,et al.  Evolving to a New Dominant Logic for Marketing , 2004 .

[36]  T. Votta,et al.  Implementing service-based chemical procurement: lessons and results , 2003 .

[37]  Ezio Manzini,et al.  A strategic design approach to develop sustainable product service systems: examples taken from the ‘environmentally friendly innovation’ Italian prize , 2003 .

[38]  Andrew Davies,et al.  Integrated Solutions: the Changing Business of Systems Integration , 2003 .

[39]  Andrej Polajnar,et al.  A real options approach to managing resources and capabilities , 2003 .

[40]  Rogelio Oliva,et al.  Managing the transition from products to services , 2003, International Journal of Service Industry Management.

[41]  John Mills,et al.  Applying resource‐based theory: Methods, outcomes and utility for managers , 2003 .

[42]  Inge Reichart.  The Environmental Impact of Getting the News , 2002 .

[43]  R. Ford,et al.  Managing Service Organizations: Does Having a “Thing” Make a Difference? , 2002 .

[44]  Oksana Mont,et al.  Clarifying the Concept of Product-Service System , 2002 .

[45]  H. Chesbrough,et al.  The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin-Off Companies , 2002 .

[46]  T. Dowd.  Culture and commodifictation: technology and structural power in the early US recording industry , 2002 .

[47]  M. Callon,et al.  The economy of qualities , 2002 .

[48]  Lars-Erik Gadde,et al.  The multiple boundaries of the firm , 2003 .

[49]  Valérie Mathieu,et al.  Service strategies within the manufacturing sector: benefits, costs and partnership , 2001 .

[50]  Yochai Benkler,et al.  Coase's Penguin, or Linux and the Nature of the Firm , 2001, ArXiv.

[51]  Richard A. Normann,et al.  Reframing Business: When the Map Changes the Landscape , 2001 .

[52]  Peter Weill,et al.  Place to Space: Migrating to Ebusiness Models , 2001 .

[53]  K. Goffin,et al.  Customer support and new product development : An exploratory study , 2001 .

[54]  Scott E. Sampson.  Customer‐supplier duality and bidirectional supply chains in service organizations , 2000 .

[55]  Jean Gadrey,et al.  THE CHARACTERIZATION OF GOODS AND SERVICES: AN ALTERNATIVE APPROACH , 2000 .

[56]  J. Dalrymple,et al.  Product customisation and manufacturing strategy , 2000 .

[57]  A. Herrmann,et al.  The effects of price bundling on consumer evaluations of product offerings , 1999 .

[58]  P. Hill.  Tangibles, intangibles and services: a new taxonomy for the classification of output , 1999 .

[59]  R. Wise,et al.  Go Downstream: The New Profit Imperative in Manufacturing , 1999 .

[60]  R. Ramírez.  Value co-production: intellectual origins and implications for practice and research , 1999 .

[61]  Yannis Bakos,et al.  Bundling Information Goods: Pricing, Profits and Efficiency , 1998 .

[62]  Martin Spring,et al.  “One more time: how do you win orders?”: a critical reappraisal of the Hill manufacturing strategy framework , 1997 .

[63]  James A. Fitzsimmons,et al.  Service Management: Operations, Strategy, and Information Technology , 1997 .

[64]  Ruud T. Frambach,et al.  Pro-active product service strategies: An application in the European health market , 1997 .

[65]  Michael Harvey,et al.  Classification of industrial services: A model with strategic implications , 1997 .

[66]  R. Langlois,et al.  The Organization of Consumption , 1996 .

[67]  James A. Narus,et al.  Capturing the value of supplementary services , 1995 .

[68]  Winand Emons,et al.  Credence Goods and Fraudulent Experts , 1997 .

[69]  Jon Sundbo,et al.  Modulization of service production and a thesis of convergence between service and manufacturing organizations , 1994 .

[70]  C. Armistead,et al.  The “Coping” Capacity Management Strategy in Services and the Influence on Quality Performance , 1994 .

[71]  Nigel Slack,et al.  Operations management , 1994 .

[72]  A. Samli,et al.  What presale and postsale services do you need to be competitive , 1992 .

[73]  Kathleen Fischer.  Promises to Keep , 1992 .

[74]  R. Coase,et al.  The Institutional Structure of Production , 1991 .

[75]  P. Chang,et al.  On the Effect of Centralization on Expected Costs in a Multi-Location Newsboy Problem , 1991 .

[76]  Graham Clark,et al.  A Framework for Formulating After‐sales Support Strategy , 1991 .

[77]  Eppen Gd,et al.  Bundling--new products, new markets, low risk. , 1991 .

[78]  G. D. Eppen,et al.  Bundling--new products, new markets, low risk. , 1991, Sloan management review.

[79]  Paul R. Milgrom,et al.  Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design , 1991 .

[80]  Miao-Sheng Chen,et al.  Effects of Centralization on Expected Costs in a Multi-location Newsboy Problem , 1989 .

[81]  S. Vandermerwe,et al.  Servitization of business : Adding value by adding services , 1988 .

[82]  H. Demsetz.  The Theory of the Firm Revisited , 1988 .

[83]  David E. Bowen,et al.  Managing customers as human resources in service organizations , 1986 .

[84]  O. Williamson.  The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting , 1985 .

[85]  R. Hayes.  Restoring our competitive edge , 1984 .

[86]  S. Wheelwright,et al.  Restoring Our Competitive Edge: Competing Through Manufacturing , 1984 .

[87]  Stephen Hill,et al.  The theory of the growth of the firm , 1981 .

[88]  G. D. Eppen.  Note---Effects of Centralization on Expected Costs in a Multi-Location Newsboy Problem , 1979 .

[89]  T. P. Hill.  DO-IT-YOURSELF AND GDP* , 1979 .

[90]  L. Mattsson.  Systems selling as a strategy on industrial markets , 1973 .

[91]  M. Darby,et al.  Free Competition and the Optimal Amount of Fraud , 1973, The Journal of Law and Economics.

[92]  J. M. Rathmell.  What is Meant by Services? , 1966 .

[93]  R. C. Judd.  The Case for Redefining Services , 1964 .

[94]  E. Penrose.  The theory of the growth of the firm twenty-five years after , 1960 .

[95]  W. Powell,et al.  The iron cage revisited institutional isomorphism and collective rationality in organizational fields , 1983 .