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Procuring and managing complex performance
Edited by Dr Mickey Howard and Dr Nigel Caldwell
1 Introduction
Managing organisational performance in sectors such as equipment provision has become increasingly complex as competition has heightened and firms have felt pressure to add value through the provision of services ([67] Baines et al. , 2007; [22] Howard and Caldwell, 2011; [36] Neely et al. , 2011). This provision is commonly referred to as the servitization of manufacturing ([57] Vandermerwe and Rada, 1988). By extending the traditional offering of equipment to include service activities however, underlying operational delivery systems and processes have become more complex to manage and co-ordinate. No longer are firms simply making and shipping products; they are now engaged in a more complex world of design and delivery ([36] Neely et al. , 2011). This study aims to explore servitization from a value perspective through the lens of service-dominant (S-D) logic, and to propose its implications for operations management.
Servitization has been generally covered in the manufacturing, mainstream engineering and management literature ([37] Neely, 2008; [67] Baines et al. , 2007; [57] Vandermerwe and Rada, 1988). The academic discussions that have appeared in the mainstream literature have centred on motives, benefits and feasibility of servitization as a competitive strategy ([57] Vandermerwe and Rada, 1988; [30] Matthyssens and Vandenbempt, 1998; [2] Anderson and Narus, 1995; [61] Wise and Baumgartner, 1999) and the implementation and process of servitization ([41] Oliva and Kallenberg, 2003; [33] Mills et al. , 2008; [10] Cook et al. , 2006). More recently, work has been published on the impact of "servitization" on manufacturing industries ([37] Neely, 2008). [37] Neely (2008) provides empirical evidence that despite an increase in organisations throughout the world adding services to their core offerings, servitized firms often generate lower net profits as a percentage of revenues compared to pure manufacturing firms. [37] Neely (2008) attributes this to the organisational challenges resulting in inevitable changes to value propositions that servitization entails. This is echoed throughout discussions in literature, which continue to highlight the need to explore the operational implications of transitioning from product to service ([46] Pawar et al. , 2009; [23] Johnstone et al. , 2009; [28] Macdonald et al. , 2009; [41] Oliva and Kallenberg, 2003). They...