In the globalized markets pure volume manufacturing is moving more and more towards east – to China, India and other Asian countries. The trend in the Western world has been already for number of years more towards high value adding services. Especially capital goods manufacturers have been looking for new business opportunities in the services business area, while the leading “soft or high touch” services companies have outsourced their businesses as well to the East in order to cut costs through lower price of labour. This is not the only way to go. Service efficiency and quality can be increased dramatically through re-thinking the service and making it more “product” like. In this development work the traditional and proven methods of the manufacturing business can be tremendous benchmarks.

 

With re-thinking the “product” I mean to start building carefully defined, modular, configurable and easily repeatable service products, i.e. productizing and modularizing services further, making them more product like or “tangible”. This is absolutely necessary in order to get closer to the efficiency, quality and volume levels seen in the tangible product industry. In practice this means that the service industry must start adapting the well thought information model definitions, processes, practices and product definition tools that have been used for some time in the industries that make tangible products.

 

The telecommunications industry has already made their first initiatives in this area to define their services better in order to increase the efficiency of their business. The eTOM framework by Telemanagement forum gives an excellent framework for all service industries. The fundamental idea behind the eTOM concept is to make clear distinction between definition of the service and its fulfilment. First of all, the product (service) and its delivery are defined in the definition domain possibly using modular product definitions and PLM systems and then it is implemented in to the fulfilment domain to be able to deliver the product (service) to customers.

 

In order to start utilizing the possibilities brought by the information technology and automation, a standard definition of a service-product is needed. This is the first thing that could be adapted from the manufacturing business. The manufacturing industry has used product models and product information models to define their products carefully in all respects and from all necessary views needed to be able to modularize, outsource and repeat the production of one single product or one certain part of a product. This product “concept” (as defined in the product model) as well as its design in the product definition domain and its procurement, sales, production and delivery functions in the fulfilment domain are managed, supervised and executed by the help of modern IT-technology. The manufacturing industry has realized ages ago, that efficient and IT-enabled management of products across the entire product portfolio is not possible without a common and standard definition of what is a product and from what entities it is built out of.  

 

In the services business side there are number of well functioning service delivery support systems. What many service industry companies are clearly missing is a standardized definition of a service product. This is vital in order to be able to modularize the service products, define the service levels, manage the products in the complete product portfolio in the same way, compare the performance of various processes, integrate processes end-to-end, standardize the delivery of service products, bundle a number of products together easily, use standard IT-systems to support the delivery of the entire service portfolio and so on.

 

In order to realize in practice the benefits of smooth and efficient definition, creation and delivery of service products, a “service”-product life cycle management concept is a necessity for companies in the service industry business.

 

In this respect, a service-product lifecycle management concept, at its simplest, is a general plan for practical product lifecycle management in daily business at the corporate level, in a particular business or product area. It is a compilation of business rules, methods, processes, and guidelines as well as instructions on how to apply the rules in practice.

 

Good examples of pure services that are easy to modularize are managed IT services, insurance services, telecom services etc. For example by combining support module 1 and 2 with module 3 a new support service is created quickly with all necessary definitions to sell, deliver and invoice the service.

 

The significance of building this kind of product information concept lies in the need to set common business rules for the entire corporation and its business and product areas. A carefully specified concept makes it possible to achieve synergies between businesses, processes and between products. A common product information concept allows for the smooth and speedy implementation of PLM-related processes and practices, because the most crucial areas of information have been agreed on at common and conceptual levels.

A good PLM-concept is never static; it keeps evolving in tune with the business and its requirements.