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Pricing for Smart-Product-Service-Systems in Subscription Business Models for Production Industries
(2021)
In the production industry, subscription business models have the potential to create long-term relationships where a supplier provides a continuous value-oriented service to a customer based on digitalisation. Monetising this increase in value through pricing represents a central challenge for suppliers in subscription business. Unlike the current dominant transactional business, the focus of pricing is on the value-in-use of the customer (e.g. on the increase in output for the customer). In this regard, there is so far no pricing approach for practice that allows the linking of the performance data of the customer with the periodically charged price. However, in subscription businesses, such an approach is required to create win-win situations for the customer and supplier through continuous performance improvement. Therefore, this paper develops a novel process model for pricing of smart-product-service-systems in subscription business for production industries. This process can serve as basis for suppliers of subscriptions in the production industry to align pricing with the created value-in-use. In the long term, this allows companies to systematically develop their pricing to monetise the potential of digitalisation.
The Impact Of Manufacturing Execution Systems On The Digital Transformation Of Production Systems
(2021)
With the focus of manufacturing companies on the digital transformation, Manufacturing Execution Systems are market-ready, modular software solutions for manufacturing companies to integrate the value-adding and supporting processes horizontal and vertical in the company. Companies, especially small and mediumsized companies, face high internal and external costs for the implementation of the MES modules. An advantage of MES is the possibility to implement the systems in a continually, module-by-module approach, with the benefit of timely distributed investments. By realizing fast improvements, companies can use the benefits for further module implementations. This paper proposes a maturity model to measure the impact of an MES on the digital transformation of the company’s production systems. The model fulfils two purposes. The first, companies can measure the impact based on the difference between its current maturity index and the potential index of an implemented MES. The second is, the user can identify what impact an MES has in general on the digital transformation since the developed maturity model is derived from an established industry 4.0 maturity model. The development of the maturity model is based on the methodologies of AKKASOGLU and focuses on the further development of an established model. As an outlook, the application of the model will be described briefly. The proposed maturity model can directly be used by practitioners and offers implications for further development of MES functionalities.
Manufacturing companies are constantly increasing their efforts in the subscription business, also known as product-as-a-service business, offering usage and outcome based solutions (value-in-use) instead of transactional services and products (value-in-exchange). Customers are becoming contractual subscribers of the solution in return for recurring, performance-related payments. To address arising, inevitable challenges like (1) reducing customer churn, (2) increasing usage intensity and outcome quality, (3) ensuring the adoption of product and software releases as well as (4) fostering customer loyalty, leading manufacturing companies are setting up a new organizational, customer-facing unit, called Customer Success Management (CSM). This unit has its origins in the software-as-a-service business, operating next to established entities like sales, key account management and customer service. Since there are currently no holistic models for an end-to-end description of CSM-tasks in the manufacturing industry, this paper contributes to a taskoriented reference model, using a grounded theory approach, examining both manufacturing and software companies. Containing a reference framework with 8 main tasks, 17 basic tasks and 76 elementary tasks, the reference model supports manufacturing companies in adapting and customizing a company-specific CSM concept.
Industrial practice shows a strong trend towards digitalization. It is not only economic crises, such as those triggered by Covid-19, that are reinforcing this trend. It is also the entrepreneurial urge to fulfill customer wishes in the best possible way and to adapt to new requirements as quickly as possible. Due to the advancing digitalization, the role of business application systems in manufacturing companies is therefore becoming increasingly important. The data processed in IT-Systems represent a great potential, especially for the evaluation of change requests in production. Through efficient change management, companies can record and process changes quickly. However, the necessary data basis to decide on existing change requests is still hardly used. Existing IT-Systems for change management coordinate the processing of change requests, but do not relate to data of operational application systems such as Enterprise-Resource-Planning. Therefore, a conceptual approach is required for the evaluation of change requests. This approach is based on an objective recording system that enables the transformation from the change description to an evaluation space. The paper presents an approach for the systematic transfer of requirement characteristics into the world of operational IT-Systems.
In the age of digitalization, manufacturing companies are under increased pressure to change due to product complexity, growing customer requirements and digital business models. The increasing digitization of processes and products is opening up numerous opportunities for mechanical engineering companies to exploit the resulting potential for value creation. Subscription business is a new form of business model in the mechanical engineering industry, which aims to continuously increase customer benefit to align the interests of both companies and customers. Characterized by a permanent data exchange, databased learning about customer behavior, and the transfer into continuous innovations to increase customer value, subscription business helps to make Industry 4.0 profitable. The fact that machines and plants are connected to the internet and exchange large amounts of data results in critical information security risks. In addition, the loss of knowledge and control, data misuse and espionage, as well as the manipulation of transaction or production data in the context of subscription transactions are particularly high risks. Complementary to direct and obvious consequences such as loss of production, the attacks are increasingly shifting to non-transparent and creeping impairments of production or product quality, which are only apparent at a late stage, or the influencing of payment flows. A transparent presentation of possible risks and their scope, as well as their interrelationships, does not exist. This paper shows a research approach in which the structure of subscription models and their different manifestations based on their risks and vulnerabilities are characterized. This allows suitable cyber security measures to be taken at an early stage. From this basis, companies can secure existing or planned subscription business models and thus strengthen the trust of business partners and customers.