Design For Service Innovation: A Methodology For Designing Service As A Business For Manufacturing Companies

Slowing sales growth for new products and falling profit margins have made adding services to products an increasingly attractive means of competitive differentiation for manufacturing-based companies. In response to this trend, this paper examines ways that manufacturing-based companies can leverage their core competencies and design services as business. It explores why a manufacturing-based company should go into service businesses in the first place. From surveys, interviews and financial analyses of multiple companies, we discovered that service businesses often stabilise the total revenue of a company, give sales a relatively long term platform and transform the incentive structure of companies and its relationship with the customer in many cases. The challenge companies' face is how to successfully design or improve a product-service system. This paper suggests a seamless and systematic framework called design for service innovation (DfSI), along with a sequence of design methods for designing services. The method is then applied to a pilot case study.