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Cambridge Service Alliance

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Engineering Services - Unpacking Value Exchange

April paper on 'Engineering Services: Unpacking Value Exchange', by Florian Urmetzer, Andy Neely, Veronica Martinez

Many commentators discuss value in manufacturing. The aim of this paper is to unpack the concept of value, exploring what it means in a practical setting using the service staircase. At one level, one can consider value in terms of the product being provided – does the product meet the customer’s requirements and hence create value for the customer? However, customers use products to achieve outcomes. So value can also be thought of in terms of the efficiency and effectiveness with which the product enables customers to achieve the outcomes they want – does the machine create the most value throughout its lifetime? Another perspective on value is to consider the two-way flow. Manufacturers create value for customers, but customers in turn create value for manufacturers. By, for example, continuing to use a manufacturer’s services to support the products through life. In this case the customer creates economic value for the manufacturer. Additionally by feeding back data on the operation of the product during its working life, the customer allows the manufacturer to improve future generations of a product.

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