1. The 7 th CIRP IPSS Conference 21-22 May 2015 Saint-Etienne, France by John Lindström, Kent Nilsson, Vinit Parida, David Rönnberg Sjödin and Håkan Ylinenpää Presenting Author: John Lindström, Assoc. Prof ProcessIT Innovations R&D Center, Luleå University of Technology Luleå, Sweden John.lindstrom@ltu.se Sustainable management of operation for Functional Products: Which customer values are of interest for marketing and sales?

2. Agenda Definitions Research approach Functional Products - Management of Operation Hill framework Findings Conclusions and discussion Questions 2

3. Definitions Functional Products (FP) – Closely related to PSS/IPS 2, TES, FS… – Comprises integrated: Hardware Software Service-Support System Management of operation – Objective is to provide a function to customers with an agreed-upon level of availability (or productivity or result) 3

4. Research approach Literature review Interviews – semi-structured open-ended – Gestamp Hardtech AB – Volvo Car Corporation – Volvo CE – Infrafone AB – Electrolux 4

5. Functional Products – Management of Operation Management of Operation A.Business model and business case – Cost drivers – Value chain design B.Lifecycle engineering and management – Reclamation activities C.Decision-making D.Financial information/intelligence and processes – Ownership issues E.Contract and contract management – Ownership issues – Management of brand, status and image – Consortium and partner contracts 5

6. 6 Management of Operation cnt’d F.Risk management and sharing – Consortium and partner contracts G.Management and transfer of intellectual property – Consortium and partner contracts H.Availability management – Measurement I.Building up trust and relations J.Research collaboration

7. Hill framework Hill has proposed three categories to use during strategic business considerations: – Order-winners – Qualifiers – Order-losers Critics…however, useful for our study 7

8. Findings set of values relevant for sustainable management of operation 8

9. Findings cnt’d set of values relevant for sustainable management of operation 9

10. Findings cnt’d 2 set of values relevant for sustainable management of operation 10

11. Conclusions and discussion Set with 23, whereof 9 FP specific, customer values Corroborates literature and adds new ones Assumption – one Hill category per customer value…various FP and contexts Pay extra attention to customer values related to: – (A) business model and business case – (F) risk management and sharing – (H) availability management – (I) building up trust and relations All sub-constituents not mapped to customer values…directed inwards instead of towards the customer 11

12. Questions ? Thanks for your attention! john.lindstrom@ltu.se +46 70 6745859 12