Engineering service products: the case of mass-customising service agreements for heavy equipment industry

Abstract

Service agreements are one of a kind, and commit the service providers to certain configuration, execution and delivery of their processes and resources over a long time. To improve productivity, the providers need a way to mass-customise the service they produce while the customers need to be able to evaluate and benchmark the service they obtain. The field lacks sufficient results to allow either party to construct the agreements with the efficiency and effectiveness they need. The mass customisation model of manufacturing can help solve the problem; however, to achieve this goal, new and comprehensive understanding of service production is required. Therefore, a reference model of service agreement engineering to help mass-customise and evaluate service agreements is developed for, first, manufacturing-based and, then, nonmanufacturing- based products. The reference model provides the static knowledge on the structuring of service processes and resources and the dynamic assessment of their costs and risks, useful for both providers and customers. The observer–participant method is used to develop and test the model with the Power Systems Division, Aircraft Engines Division and Transportation Systems Division of General Electric Corporation. Ongoing work generalises it for IT outsourcing and other non-manufacturing-based service agreements. The results hold promise for generalisation into other service products, such as facilitating the application service providers of ebusiness to host many different, custom processes provided to its clientele on a common base of resources.

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