PurposeThe purpose of this paper is to propose a process‐modelling method that is based on methods from both operations management (OM) and service operations management (SOM), which complies with the special requirements of servitised manufacturers.Design/methodology/approachAfter a comprehensive literature review of organisational change in servitised manufacturers, the requirements for modelling industrial services are established. In addition, existing business process‐modelling methods from OM and SOM are classified and related to these requirements. A modelling method that is adapted to the needs of servitised manufacturers is proposed, and the practical advantages of this methodology are explored in an exemplary case study of a machine tool manufacturer.FindingsThis paper suggests that existing instruments that have been developed within OM and SOM need considerable adjustment to comply with the needs of servitised manufacturers.Originality/valueThis paper contributes towards mastering the transition from the production of capital goods to the offering of entire solutions by outlining the special requirements of the process structure in a manufacturing company as it turns into a solution‐provider.

The concept of Product-Service Systems (PSS) as a means to realize sustainable business models is a vividly discussed topic in management literature. Most approaches to evaluate the impacts of PSS focus on the economic as well as the ecological dimension of sustainability, whereas social implications are hardly analyzed. However, a more comprehensive evaluation of potential effects of all three dimensions of sustainability is indispensable to foster the diffusion of PSS. Therefore, this article offers an integrative assessment of the sustainability impacts of PSS based on expert interviews in the B2B as well as B2C sector.

IntroductionInstead of merely selling physical products, i.e. machinery and equipment, to their customers and additionally offering product-related services, manufacturers are increasingly selling their products' functionality. 85% of European manufacturers already add services and innovative service concepts to their products (Lay, Copani, Jaeger, & Biege, 2010). Servitization is the term used to describe this concept of adding services to physical products. Product-service systems, however, which define not only the combination but also the integration of products and services, have been increasingly discussed during the last years (Baines et al., 2007; Baines, Lightfoot, Benedettini, & Kay, 2009). Supplementing physical products with services is said to entail strategic benefits, such as differentiation against competitors and installing market entry barriers (Mathieu, 2001). Furthermore, product-service systems can also lead to an increase in service revenues and thus to overall revenues. Service revenues, moreover, are a more stable source of revenue than revenues from equipment sales due to their relative independence from economic fluctuations (Gebauer, 2007). Finally, delivering services to their customers enables manufacturing companies to gain product-in-use knowledge which can be used to improve existing, and developing new products (Lewis & Howard, 2009). Several challenges accompany the transition and benefits described above. Among others, manufacturing companies need to establish service-oriented structures and processes and have to deal with many new risks. Developing services in manufacturing companies is more complex than developing services in service companies, as manufacturing companies traditionally focus on physical products and center their corporate culture around them (Kindstrom & Kowalkowski, 2009). Consequently, servitizing manufacturing companies need to establish a symbiotic relationship between manufacturing values and service-oriented values and need to set up service awareness in their organizations (Gebauer, Krempl, Fleisch, & Friedli, 2008). These companies need workers who have product knowledge as well as the ability to manage and develop customer relationships (Baines, Lightfoot, Peppard, Johnson, Tiwari, & Shehab, 2009).The following research questions emerge:* How do manufacturing companies establish service awareness?* In particular, who is responsible for designing new services?* Which divisions of manufacturing companies generate ideas for new services?In order to answer these questions, large-scale survey data is used to explore on a quantitative basis how new services are developed in the manufacturing sector. At a firm level, we identify and discuss the links between the way services are designed in manufacturing companies and service innovativeness in these firms.Service Innovations in Manufacturing Industries: Literature ReviewInnovations in products and services have much in common, but the generation processes in product-centered firms differ from those in service sector businesses. In this section of the paper, we show that goods and services can be considered from various perspectives. Thus, besides the traditional approaches which regard products and services as dichotomous, there are many studies where the separation between the two has been removed and each good is considered as a package of services with a variable share of goods and services. The same applies for investigating innovations in these two fields. Studying the development of physical products and the development of services can be linked together in various ways. Coombs and Miles (2000) suggest three approaches to the investigation of service innovations (cf. the depiction of these three approaches by Hipp (2008) in Figure 1). In an assimilation of the two types of innovation, it is assumed that service innovations basically resemble product innovations, and for this reason the same methods and concepts can be applied to examine them. …

Service-oriented business models are regarded as one of the main competitive priority for European machine builders willing to keep their global leadership, menaced by the growth of Asiatic competitors and by the financial crisis. Despite the efforts of the research community and of industrial companies in the direction of servitization, there is empirical evidence that only few companies successfully innovated their business model. In this paper, the results of an European case study research are reported, aimed at the understanding of business model innovation mechanisms and success in the machine tool sector. Companies resulted distributed in different clusters, each of them characterized by different business model innovation levels, strategic consciousness and achieved performance. The clusters suggest the existence of three alternative paths of business model innovation, which are described in the paper, showing specific innovation mechanisms that can be followed.

Non-research-intensive industries and businesses have played a comparatively minor role in the economic and innovation policy debate so far. Due to the strong focus of the political discussion on research-intensive sectors, the potential of non-research-intensive industries and businesses for Germany as a business location was usually not attributed any particular significance in the past. Based on growth theory considerations, intensive research and development (R&D) was usually associated with higher economic growth and greater international competitiveness. This report focuses on non-research-intensive sectors and companies and addresses the question of what direct and, above all, indirect contributions these sectors make to Germany's international competitiveness and what future potential results from this. It examines the competitive and innovation strategies pursued by research-intensive companies and the extent to which current economic developments create pressure for change that could affect the market position and survival of research-intensive companies in the future. Furthermore, the question is addressed as to which developments are foreseeable with regard to competitiveness and thus with regard to employment opportunities in non-research-intensive industries. Finally, it is clarified which effects on the qualification requirements of these employees are foreseeable due to current developments. The analysis of the macroeconomic importance of non-research-intensive industries is based on official statistical data at the national and international level. The analyses at the company level are based on a telephone survey of more than 200 non-research-intensive companies and 88 particularly research-intensive companies in the German manufacturing sector. Supplementary evaluations are carried out using data from the survey Modernisation of Production 2009 by the Fraunhofer ISI. The data includes information on topics such as the market environment, the competitive strategy, the specific innovation patterns, the competence equipment, the ability to absorb and implement external information, the protection and importance of different forms of knowledge or the future opportunities and risks of these enterprises.

In literature the positive economic effects for suppliers and customers of Industrial Product-Service Systems (IPS 2 ) have often been described. However, provider companies often struggle when it comes to realize winwin potentials. Therefore, an early stage assessment is needed to allow companies to forecast benefits, risks, costs and profits of the new business model in early stages of IPS 2 planning. It will be shown how business plans can be used to describe and assess the process, requirements and pitfalls in creating added value via IPS 2 . The results of two case studies of machine tool manufacturers turning into solution providers are reported.