Extended Products and VOs

Prof. Dr.-Ing. Klaus-Dieter ThobenBIBA (Bremen Institute of Industrial Technology and

Applied Workscience) and University of Bremen, Germany

ECOLEAD Summer School on Collaborative Networks

Helsinki 2006

UNIVERSITÄT

BREMEN

Development Manufacturing Operation

Ad

ded

Valu

e

Future ?Past

Customer Needs

„Realisation“ Customer Needs Fulfilment

Achieving customer satisfaction:Change of Value Chain Characteristics

Extended View on Manufacturing

Past

(adopted from Browne et al, 1994)

(Pine, 2000)

Processing of Raw Materials

ManufacturingOf Goods

Offering of Services

Creation ofEvents

Price of Offering

Low Price High Price

Com

peti

tive P

osi

tion

Hig

h

Com

peti

tion

Low

C

om

peti

tion

Cu

stom

er

Sati

sfact

ion

Not

Rele

vant

for

Rele

vant

for

Customisation

Customisation

Downgrading

to Mass Product

Downgrading

to Mass Product

The Progress of Competitive Advantage

(Pine, 2000)

Processing of Raw Materials

ManufacturingOf Goods

Offering of Services

Creation ofEvents

Price of Offering

Low Price High Price

Com

peti

tive P

osi

tion

Hig

h

Com

peti

tion

Low

C

om

peti

tion

Cu

stom

er

Sati

sfact

ion

Not

Rele

vant

for

Rele

vant

for

Customisation

Customisation

Different Raw Materials for a Cake

Ready prepared Mixtures needing only milk etc.

Fully designed and customised cakes

Birthday celebrationshosting services

The Progress of Competitive Advantage

(adopted from Pine, 2000)

Manufacturingof Raw Materials

Offering ofProducts

Offering of Solutions

Guarantee forSuccess

Value Added

Low High

Com

peti

tive P

osi

tion

Hig

h

Com

peti

tion

Low

C

om

peti

tion

Cu

stom

er

Sati

sfact

ion

Not

Rele

vant

for

Rele

vant

for

Customisation

Customisation

Downgrading to Mass Products

Downgrading to Mass Products

The Progress of Competitive Advantage

Non-tangible Product

Intangible Surroundings ofthe Tangible Product

Services

Tangible Product Shell

Including the Packagingof the Core Product

Product Shell

Concept of Product

Core Product (Tangible)

Including Materials andTechnical Functions of a

(Tangible) Product

Kernel of Product

Product in a Narrow Sense(Tangible Entity to beOffered to the Market)

Product in a Broader Sense(Product Solution, consisting of

Tangible as well as Intangible Assets)

Examples:

PCs,

Books

Examples:

Tangible and Non-tangible Value-share

0 %

100 %V

alu

e

Time

Tangible value-shareof a product

Non-tangible value-shareof a product

(adopted from Pine, 2000)

Value Added

Low High

Com

peti

tive P

osi

tion

Hig

h

Com

peti

tion

Low

C

om

peti

tion

Cu

stom

er

Sati

sfact

ion

Not

Rele

vant

for

Rele

vant

for

The Progress of Competitive Advantage

Customisation

(adopted from Pine, 2000)

Value Added

Low High

Com

peti

tive P

osi

tion

Hig

h

Com

peti

tion

Low

C

om

peti

tion

Cu

stom

er

Sati

sfact

ion

Not

Rele

vant

for

Rele

vant

for

The Progress of Competitive Advantage

Customisation

Downgrading to Expected “Core Functionalities”

Enterprise Product

Extension of System Boundaries

Traditional Boundary Traditional Boundary

Extended Boundary (Extended Enterprise)

Extended Boundary

(Extended Product)

Extended Enterprise Extended Product

32 %

39 %

32 %

39 %

Providing Extended Products through Co-operation

Common Culture: gemeinsame Wertvorstellungen und Erwartungen dienen der Verbesserung der Zusammen-arbeit und der KonfliktbewältigungCommon Standards: Gemeinsame Begrifflichkeiten und Verfahrensweisen zur Unterstützung voneinander un-abhängiger Geschäftsprozesse

Information Sharing: Gegenseitiger Zugriff auf Datenunabhängig voneinander laufender GeschäftsprozesseCoordination: Verhandlung und Informationsaustausch zur Synchronisierung unabhängiger Geschäftsprozesse

Collaboration: Integration ursprünglich eigenständigerGeschäftsprozesse. Verschmelzung der Prozesse undVerlust ihrer Unabhängigkeit

Stages of Collaboration

Level of

Inte

gra

tion

+

-

Said

Heardis not

Understoodis not

Implementedis not

Sustainedis not

Agreedis not

Quelle: Ulrich Reetz, CSC Ploenzke, 1999

The Lorenz-Chain

About the difficulties to co-operate

simple complex

Resources

sim

ple

com

ple

x

Pro

duct

simple

complex

Life-Cycle

“New Product”

“Old Product”

Future Products: Dimensions to be considered!

low high

Customization

simple complex

Ownership

simple complex

etc.

© BIBA / Thoben

Along its Life-cycle a Product has to be:

Maintenance Phase

Realisation Phase

End of Life Phase

Specification Phase

Requirements Phase

Usage Phase

operated

refurbished

financed

developed

delivered

assembled

calculated, simulated

designed

specified

maintained

disassembled/ recycled

repaired

Products can be customised:

Maintenance Phase

Realisation Phase

End of Life Phase

Specification Phase

Requirements Phase

Usage Phaseoperated to order

refurbished to order

financed to order

delivered to order

assembled to order

manufactured to order

calculated, simulated to

order

designed to order

maintained to order

repaired to order

disposed to order

specified to order

Maintenance Phase

Realisation Phase

End of Life Phase

Specification Phase

Requirements Phase

Usage Phase

Potential Services Along the Product Life-Cycle

Formalisation of the needs

consultancy services

Product dependentor independent

services

Services to support co-operations of

enterprises

Customer integration into realisation phase

Qualification and training

Operation support

Co-development

Routine Maintenance

Financial services

Collection services

Collation of materials

Dismantling services

Disposal of hazardous materials

Repair

Evaluation and benchmarking services

„Extended“ Products require integration

IT-infrastructure

different business models

different organisation

slife-cycle phases

different types of products

Customerget better value for money and more flexibility• increased benefits• new / innovative types of benefits• …

Provider(s)

increased options to add value to a product and earn money

• generate new business opportunities (new services)• increase added value achieved with the same customer• ......

Extended Products – Summary

1.Locate custom erT A XI

T A XI

C ustom er

3. Locate/In formtaxi

GPS

O ngoingG et P osition

Service DiscoveryMiddleware

IntegratedNetwork

2. Locate/book ho te l

T A XIm ovem ent

“Get me to a hotel room”

O ngoingG ive P osition

H ote l

4 . P ickup C ustom er

5. Take C ustom erto ho tel

Extended Services (Example)

1. Locate the customer

2. Locate and book hotel

3. Locate and inform

taxi

4. Pickup customer

5. Take customer to hotel

Customer:„Find a hotel and get

me there“ Hotel

(Source: EU-Project NOMAD)