TY - JOUR

T1 - Beyond the service factory: service innovation in manufacturing supply networks

AU - Spring, Martin

AU - Araujo, Luis

N1 - The final, definitive version of this article has been published in the Journal, Industrial Marketing Management 42 (1), 2013, © ELSEVIER.

PY - 2013/5

Y1 - 2013/5

N2 - This paper is concerned with the nature of the connection between services and manufacturing in manufacturing-oriented supply networks. The existing literature on manufacturing shifting into service is reviewed and, although such moves are seen as a way to increased revenue and profit, there are concerns that firms do not understand how the capabilities that underpin manufacturing may be extended to enable effective service delivery. Inspired by Chase’s concept of the ‘service factory’, which sees the factory as a repository of knowledge and a platform for services, the paper applies Edith Penrose’s conception of services as emanating from firms’ resources to examine an advanced component manufacturing firm in the course of a number of service-oriented projects. This leads to a model of service development in manufacturing firms, consisting of a network trigger, an opportunity to change the ‘productive opportunity’, the ‘revelation’ of resources and Penrose-services, a reconfiguration of the network, leading to an expanded productive opportunity and hence a platform for marketing new service capabilities. In this sense a network is seen as an inter-connected set of productive opportunities. It also draws attention to the importance in theory and practice of understanding both the institutional and the ontological connection between service offerings and the products, factories, firms and networks with which they are associated.

AB - This paper is concerned with the nature of the connection between services and manufacturing in manufacturing-oriented supply networks. The existing literature on manufacturing shifting into service is reviewed and, although such moves are seen as a way to increased revenue and profit, there are concerns that firms do not understand how the capabilities that underpin manufacturing may be extended to enable effective service delivery. Inspired by Chase’s concept of the ‘service factory’, which sees the factory as a repository of knowledge and a platform for services, the paper applies Edith Penrose’s conception of services as emanating from firms’ resources to examine an advanced component manufacturing firm in the course of a number of service-oriented projects. This leads to a model of service development in manufacturing firms, consisting of a network trigger, an opportunity to change the ‘productive opportunity’, the ‘revelation’ of resources and Penrose-services, a reconfiguration of the network, leading to an expanded productive opportunity and hence a platform for marketing new service capabilities. In this sense a network is seen as an inter-connected set of productive opportunities. It also draws attention to the importance in theory and practice of understanding both the institutional and the ontological connection between service offerings and the products, factories, firms and networks with which they are associated.

KW - Service innovation

KW - network

KW - Penrose

KW - Service factory

KW - servitization

U2 - 10.1016/j.indmarman.2012.11.006

DO - 10.1016/j.indmarman.2012.11.006

M3 - Journal article

VL - 42

SP - 59

EP - 70

JO - Industrial Marketing Management

JF - Industrial Marketing Management

SN - 0019-8501

IS - 1

ER -