Performance-Based Product-Service-System Contracts

The past years have displayed a tremendous trend in which traditional manufacturing companies have become professional service providers by offering beneficial product-service bundles with a strong focus on customer needs. Driven by the outsourcing phenomenon, service providers are becoming an integrated part of the customers’ value chain processes. This service paradigm shift requires an increased joint service initiative between service providers and their customers. Measuring the performance and value created by industrial services, such as maintenance and packaging, is crucial to maintain ongoing and new collaborative service business relationships. Based on a case study with Bosch Packaging Services as a globally operating service provider, the article presents a generalized methodology for the development of performance-based service contracts integrating service processes, performance indicators and risk analysis as the basis for product-service business relationships.