Flexibility of Industrial Product Service Systems - An Assessment Based on Concept Modelling

Companies from established industrial nations are faced with a multitude of threats,caused especially by companies from developing nations such as India or China. Inthe past, these threats were primarily based on the common practice of imitatingproducts of competitors from developed, industrialised nations. These imitationsexacerbate the amortisation of investments in research and development and caneven render it impossible. Growing capabilities and competencies of such competitorspose a further threat, since companies from developed industrial nationsare unable to compete with the low labour costs of the aforementioned companies.Shorter product life cycles and insufficient leverages to protect know-howwhen selling highly complex technology pose further competitive challenges. Focusingon providing products does no longer suffice to create a viable economicbasis for company success. Consequently, markets have experienced a shift of focusfrom products to market requirements and an augmentation of the importance ofservices. Encompassing this, significant effort is dedicated to an interwoven integrationof products and services in order to generate a sustainable competitive edgeand prevent out-suppliers from penetrating the customer-supplier relationship. Asa consequence, bundling product and service components has become a commonpractice in many markets and is prevalent especially in the production technologysector. By means of bundling, suppliers want to tap unused product potential andenable product customization. Against this background of offering customized combinationsof products and services, we propose Industrial Product Service Systems(IPS2) as a solution to individual customers’ problems. The possibility of flexiblyadopting the IPS2 to changing customer needs is an inherent characteristic of thisapproach.