A decision-making framework for purchasing product-service systems

As technologies become more complex and competition becomes tougher than ever before, manufacturers in the developed world acknowledge the significance of a competitive strategy in increasing sales to their customers. These strategies not only include offering the products, but also offering service contracts and integrated bundles of products and services, where the supplier is responsible for the required engineering services, typically for a relatively long period of time. This is also known as Product-Service Systems (PSS). For many commercial and governmental organisations, purchasing PSS remains challenging. Despite the considerable work that has been conducted to investigate and improve the methodological applications of the concept of PSS from PSS providers’ perspective, purchasing PSS positions the PSS customers halfway between PSS providers’ strategies and the PSS customer traditional strategies. Little effort in the literature describing how to assist PSS customers in the selection and evaluation of the PSS offerings has been observed. Consequently, this research attempts to satisfy the gap in the body of knowledge by proposing a decision-making framework to enable PSS customer to evaluate and select from the various PSS offers. The research began by reviewing the state-of-art of PSS, followed by the identification of the most likely characteristics exhibited by PSS customers. Then, the research investigates the existing PSS frameworks and analyses it to identify its appropriateness for use by PSS customers. The basis of the PSS framework is initially structured on the findings from the literature review, then modified by the result obtained from the field study in Saudi Arabia. The PSS framework is refined through expert feedback. Then, a computerised software tool was developed for the purpose of validation. Finally, the proposed PSS framework is validated by conducting five case studies. The proposed framework can guide purchasing practitioners through a step by step process, from evaluation to selection the most suitable PSS offers, by considering the degree of fitness between the PSS offerings and customer’s characteristics. This research has satisfied the industrial need and filled the gap in the literature, and has made a significant contribution to the knowledge on PSS customers to overcome the challenge of purchasing PSS.