Building a Product-Service System (PSS) for Intermediate and Advanced Servitization

Article 5 of 14

As manufacturers progress along the servitization journey, moving from basic to intermediate and advanced levels, a solid foundation of infrastructure and processes becomes essential. Intermediate and advanced servitization models involve more than adding service options; they require a comprehensive product-service system (PSS) that integrates production, technology, and customer interaction. This article will explore the key components of a PSS and how they enable manufacturers to deliver consistent, high-value service at every stage.

The Role of PSS in Supporting Advanced Service Models

A PSS is the backbone of intermediate and advanced servitization, where the manufacturer’s role extends beyond product delivery to ensuring ongoing performance, maintenance, and even outcomes. At these levels, the focus shifts from single transactions to building long-term, performance-based relationships. To achieve this, a well-developed PSS integrates several core elements, including data-driven monitoring, service capabilities, customer engagement, and lifecycle management. Each component plays a vital role in maintaining product reliability, ensuring customer satisfaction, and optimizing operational efficiency.

1. Data-Driven Monitoring and Remote Diagnostics

Intermediate and advanced servitization models often hinge on the ability to monitor products in real-time and respond proactively to any performance issues. IoT (Internet of Things) sensors, combined with data analytics, allow manufacturers to track critical metrics such as usage, wear and tear, and environmental conditions. By implementing IoT-enabled remote diagnostics, SMEs can deliver predictive maintenance services, identifying and addressing potential issues before they lead to downtime.

For example, a manufacturer of industrial air compressors might use IoT sensors to track pressure levels, temperature, and operational hours. If sensors detect an anomaly, the system could alert the service team to investigate and resolve the issue remotely or dispatch a technician if needed. This proactive approach helps maintain optimal performance for the customer, aligning with service agreements and enhancing customer loyalty.

Implementation Tip for SMEs: Start small with IoT deployment by selecting a few key performance indicators (KPIs) relevant to customer operations. Collecting and analyzing these data points on a smaller scale enables SMEs to understand trends and refine service delivery before scaling.

2. Service Management Infrastructure and Skilled Personnel

A robust PSS requires an organized service management infrastructure to coordinate and deliver services effectively. For intermediate servitization, this may include managing recurring maintenance schedules and ensuring quick responses to service requests. At the advanced level, where manufacturers retain responsibility for uptime, this infrastructure expands to include real-time monitoring, response protocols, and an organized field service team.

A service management system that integrates with ERP (Enterprise Resource Planning) software can help SMEs organize workflows, schedule routine maintenance, dispatch technicians, and manage inventory. Having trained personnel capable of handling both routine and specialized tasks is equally critical. Skilled technicians not only provide the hands-on service required for intermediate and advanced models but also serve as valuable customer liaisons, building trust through responsive and knowledgeable interactions.

Implementation Tip for SMEs: Investing in technician training is essential for long-term success. Developing a team that understands both technical repair and customer relationship management ensures a high-quality customer experience and strengthens loyalty.

3. Customer Engagement and Communication Platforms

Intermediate and advanced servitization models require constant interaction with customers to ensure service levels are met and any emerging needs are addressed. A customer engagement platform provides a seamless channel for communication, allowing customers to reach service teams, view performance data, and access product support.

For example, a portal where customers can view their equipment’s performance metrics, receive maintenance updates, or make service requests promotes transparency and builds trust. Such a platform strengthens customer relationships by giving them more control over their assets and a clear view of the value provided through ongoing service. Additionally, customer feedback collected through the platform can inform service improvements and help the manufacturer tailor offerings to meet specific needs.

Implementation Tip for SMEs: Consider launching a basic customer portal with essential features, such as service request tracking and maintenance scheduling, and expand functionality over time as customer engagement grows.

4. Lifecycle Management and Asset Optimization

Lifecycle management is a critical aspect of advanced servitization, particularly when manufacturers retain ownership of the product. This component of PSS involves tracking the product’s lifecycle—from production to deployment, maintenance, upgrades, and eventual disposal. By optimizing the product lifecycle, manufacturers can improve asset performance, reduce operational costs, and ensure that products remain reliable for customers.

For example, manufacturers who offer equipment-as-a-service may eventually redeploy refurbished units with new customers. This approach minimizes waste, maximizes asset utilization, and aligns with sustainability goals. With lifecycle management tools in place, manufacturers can monitor the age, condition, and usage patterns of each asset, making it easier to plan timely upgrades, refurbishments, or replacements.

Implementation Tip for SMEs: Adopting lifecycle management incrementally, by first focusing on key stages like maintenance and refurbishment, allows SMEs to develop expertise and control costs while maximizing the value of each asset.

5. Data Analytics and Performance Insights

Data analytics are invaluable for intermediate and advanced servitization, providing insights into both customer needs and operational efficiencies. By analyzing data from IoT sensors, service records, and customer feedback, manufacturers can identify trends, optimize service delivery, and even develop new offerings.

For instance, usage data might reveal that certain components wear out faster under specific conditions, prompting the manufacturer to adjust maintenance schedules or upgrade materials. Predictive analytics can also help anticipate customer needs, providing insights that lead to proactive service and stronger customer satisfaction. Over time, data analytics become a core component of innovation, allowing manufacturers to continuously improve product design and service quality.

Implementation Tip for SMEs: Start by analyzing a few key metrics tied to service goals, such as equipment uptime or response times. Building an analytics foundation on targeted KPIs will ensure focus and prevent data overload, while still delivering valuable insights for gradual service improvements.

In Summary: Building a Scalable PSS for Long-Term Success

For SMEs moving toward intermediate and advanced servitization, developing a well-structured product-service system (PSS) is essential. This system not only supports reliable service delivery but also establishes the infrastructure for scaling service models as customer needs grow and technology evolves. By integrating real-time monitoring, skilled personnel, customer engagement platforms, lifecycle management, and data analytics, SMEs can build a responsive, customer-centered PSS that delivers consistent value.

In the next article, we’ll examine the essential technologies that make servitization possible, including IoT, data analytics, and remote monitoring. These digital tools are the foundation for delivering consistent, high-quality service and creating scalable, service-oriented operations.