Earticle

Due to the advent of service economy, servitization becomes popular as a new business model to survive in severe competitions in the market. Although there have been a number of previous studies with the increasing importance of servitization, the development of implementation methods or roadmaps has been rarely fulfilled in literature. In addition, existing methods and case studies are mostly based on major companies and successful cases. Therefore, small and medium sized manufacturing businesses who are not quite ready to start servitization have no guideline to follow. Also, there are rare case studies about failures of servitization which make the servitization more difficult because of the lack of information for what to care and what to avoid. In this paper, we propose a coherent servitization implementation methodology by classifying the degrees of servitization in the detail processes of the company, focusing on the core processes of the small and medium sized manufacturing company, and determining the scope and direction of servitization through a comparative analysis with competitors. The methodology categorizes firm’s core processes as supplier relationship process, manufacturing process and customer relationship process with a flow-chart. Categorized processes are analyzed by process characteristics table to determine the moving direction of the servitization toward the manufacturing side or the service side. Case studies of successful and unsuccessful servitizations are introduced to help understanding of how to apply the theoretic methodology into the practice. The proposed methodology is a comprehensive approach that can be applied for various areas regardless of the characteristics of an industry or a company, and provides a theoretical background on how to achieve successful servitization implementation while avoiding service paradox.

The flow of the $4^{th}$ Industrial Revolution calls for the innovation of the traditional business models of the manufacturers. Servitization is a corporate strategy to respond to changes in the business environment. These days, the value that the market demands can be created on the basis of the product-service integration. Thus the manufacturers must pursue the fundamental innovation of the current strategy and business models. It is necessary to create common values with customers through providing product-service integrated offerings beyond the development, production, and delivery. The purpose of this study is to develop the evaluation indicators for selecting suppliers when the manufacturer who offers the value of product-service integration needs to obtain the resources from outside. The case company in this study is the manufacture firm conducting the retail IoT business as a new business. The Delphi method is used to develop the evaluation indicators for selecting suppliers. This study suggests the academic implications providing the perspective of Servitizaiton by using Delphi method, and the practical implications applying the creating value method of Servitization by collecting the opinions from both value providers and value consumers in the process of developing the evaluation indicators.