Archive by Author | mikkosirenne

Organizing Service Operations in Manufacturing – Doctoral dissertation by Taija Turunen

The service marketing literature is full of examples about servitization of products. How companies like Rolls Royce, KONE, IBM and many others have turned the game around by servitizing the traditional product oriented business. The literature has been evolving from product-related services to service orientation and new services development as areas of exploration for manufacturers. Recently the literature has been questioning why companies are servitizing and what are the benefits and related problems related to this shift (Turunen 2013).
Taija Turunen from Aalto University found a gap in the operational implications of this phenomenon: How to actually make such transformation? Turunen’s doctoral dissertation examines and explains the process of servitization, the organizational structure characteristics assisting transformation and the operational premises allowing this revolution, like the author strongly describes the organizational change, needed in order to succeed.

The thesis explores organization’s journey from product centric business towards service orientation and servitizing. Turunen’s study is based on wide literature review together with 8 case studies and 95 interviews. Turunen defines servitizing as the transformation process of product companies towards services, including service aspects to the product. In the literature review Turunen shows the evolution of literature related to servitization from 1988 all the way to day. Thesis draws the background with literature review exploring the provider benefits associated with servitization and the market orientation as a driver for servitization. Turunen then continues discussing the challenges associated with servitization: The different logic between products and services, transforming company to service culture, service development and innovation, managing service operations, building a service strategy, and understanding the customer interface. Based on Turunen these are all factors that are yet unfamiliar to fully product oriented manufacturing firms. Turunen does not claim that much this kind of companies exists but wants to describe the contrast between the two extreme ends. Ford’s legendary T-Ford car works as an example for the extreme behavior of manufacturing firm: The whole design was based on the goal of not needing any after-sales services. The car was made so simple that any farmer could fix it with their own tools. Manufacturer had no interest about the usage of the product. This aspect of behavior has later brought challenges to the manufacturers who have tried to move towards servitization. They have had no record about their products: who bought the product, where the product is now, how the product is used, etc.? They did not have the interest before to collect this data.

Continue reading