Servitization in the era of industry 4.0-A realist review to identify enablers of servitization for business-to-business models in the manufacturing industry globally

Business customers of manufacturing organizations globally seek superior customer service from the manufacturer, the practical usage of digital product monitoring services, predictive maintenance for products, and relief from buying capital expenditure products for products as a service. This dissertation aims to identify enablers that leaders within manufacturing firms should consider as they transform from a product-centric to a service-centric business model –a move known as servitization. With the advent of Industry 4.0 and the latest technological evolutions, the concepts and process of servitization implementation profoundly impact the manufacturer's business models by enabling newer revenue streams. Purpose: This dissertation aims to bridge the existing knowledge gap in the available scholarly literature by providing a holistic overview of servitization enablers in the era of industry 4.0. Scope: The research scope is limited to global manufacturing firms operating within the business-to-business domain. Method: This dissertation leverages a realist inquiry using multiple search strategies to retrieve 218 articles from academic, industry, and grey literature leading to 59 quality appraised articles from the last seven years for inclusion in the synthesis. The dynamic capabilities theory and its aspects of sensing, seizing, and transforming guide this research. Findings: The synthesis conducted as part of this dissertation yields four findings and 10sub findings constituting the areas of continuous innovation, customer focus, and organizational transformation as enablers. Limitations: Areas that the literature did not sufficiently address include (a)the correlation between implementing servitization of business and the revenue generated by the manufacturing organization, (b)the correlation between implementing servitization models and the manufacturing industry sectors, and (c)the impact of using newer and advanced technologies on servitization models. Implications: The manufacturing organization leaders should conduct a maturity assessment, review an awareness checklist, and consider investments and partnerships as proposed by this research to support their servitization of business journey. Originality/Value: The results of this dissertation will allow manufacturing organizations to distinguish themselves from the competition and show more significant revenue potential for their shareholders by effectively deploying critical organizational actors in the servitization journey to transform their business into effective service-centric manufacturing organizations.SERVITIZATION ENABLERS FOR B2B MANUFACTURING i ABSTRACT Title of Dissertation: SERVITIZATION IN THE ERA OF INDUSTRY 4.0 – A REALIST REVIEW TO IDENTIFY ENABLERS OF SERVITIZATION FOR BUSINESS-TO-BUSINESS MODELS IN THE MANUFACTURING INDUSTRY GLOBALLY Alok Tewari, Doctor of Management, 2020 Business customers of manufacturing organizations globally seek superior customer service from the manufacturer, the practical usage of digital product monitoring services, predictive maintenance for products, and relief from buying capital expenditure products for products as a service. This dissertation aims to identify enablers that leaders within manufacturing firms should consider as they transform from a product-centric to a service-centric business model – a move known as servitization. With the advent of Industry 4.0 and the latest technological evolutions, the concepts and process of servitization implementation profoundly impact the manufacturer's business models by enabling newer revenue streams. Purpose: This dissertation aims to bridge the existing knowledge gap in the available scholarly literature by providing a holistic overview of servitization enablers in the era of industry 4.0. Scope: The research scope is limited to global manufacturing firms operating within the business-to-business domain. Method: This dissertation leverages a realist inquiry using multiple search strategies to retrieve 218 articles from academic, industry, and grey literature leading to 59 SERVITIZATION ENABLERS FOR B2B MANUFACTURING ii quality appraised articles from the last seven years for inclusion in the synthesis. The dynamic capabilities theory and its aspects of sensing, seizing, and transforming guide this research. Findings: The synthesis conducted as part of this dissertation yields four findings and 10 sub findings constituting the areas of continuous innovation, customer focus, and organizational transformation as enablers. Limitations: Areas that the literature did not sufficiently address include (a) the correlation between implementing servitization of business and the revenue generated by the manufacturing organization, (b) the correlation between implementing servitization models and the manufacturing industry sectors, and (c) the impact of using newer and advanced technologies on servitization models. Implications: The manufacturing organization leaders should conduct a maturity assessment, review an awareness checklist, and consider investments and partnerships as proposed by this research to support their servitization of business journey. Originality/Value: The results of this dissertation will allow manufacturing organizations to distinguish themselves from the competition and show more significant revenue potential for their shareholders by effectively deploying critical organizational actors in the servitization journey to transform their business into effective service-centric manufacturing organizations. Keywords: servitization, industry 4.0, industrial IoT, as-a-service, manufacturing, dynamic capabilities SERVITIZATION ENABLERS FOR B2B MANUFACTURING iii SERVITIZATION IN THE ERA OF INDUSTRY 4.0 – A REALIST REVIEW TO IDENTIFY ENABLERS OF SERVITIZATION FOR BUSINESS-TO-BUSINESS MODELS IN THE MANUFACTURING INDUSTRY GLOBALLY By Alok Tewari Dissertation submitted to the School of Business, University of Maryland Global Campus, in partial fulfillment of the requirements for the degree of Doctor of Management 2020 © Copyright by [ALOK TEWARI] 2021 SERVITIZATION ENABLERS FOR B2B MANUFACTURING iv Preface This dissertation is being submitted in partial fulfillment of the requirements for the degree of Doctor of Management at the University of Maryland Global Campus. The evidence-based management research described herein was conducted under the supervision of Dr. Deborah Wharff between January 2020 and December 2020. To the best of my knowledge, this work is original except where acknowledgments and references are made to the previous work. Neither this nor any similar dissertation has been submitted for any other degree, diploma, or other qualification at any other university or degree-granting institution. Permission for use has been obtained for all reprinted or adapted figures. Any such figure, not explicitly stating that permission has been granted, did not require permission. The world around us is changing fast in the form of business model disruptions. Business models that did not exist even a decade ago have become an integral part of our lives. With technology at the forefront, creativity and imagination are having a lasting change on humanity. With this dissertation, I aim to contribute to one such domain of the business-to-business manufacturing industry. Alok Tewari December 2020 SERVITIZATION ENABLERS FOR B2B MANUFACTURING v Dedication To my wife. She has been and remains my biggest supporter and mentor over the last 18 years. SERVITIZATION ENABLERS FOR B2B MANUFACTURING vi Acknowledgments My doctoral journey started with Dr. Deborah Wharff as the professor for my very first academic course in 2017. My doctoral journey ends in December 2020, with Dr. Deborah Wharff as my dissertation advisor and mentor for the past year. I thank Dr. Wharff for keeping me motivated on this journey and getting me through the finish line. With this dissertation process, Dr. Wharff has guided, mentored, and coached me on transforming my learning, writing, and thought process. Dr. Wharff is a perfectionist and works hard to coach and attain the same level of perfection from her students. I will always be grateful to Dr. Wharff for her dedication to the evidence-based management domain and, most importantly, for showing me a path to lifelong learning. I am thankful to the faculty members of the Doctor of Management program at the University of Maryland Global Campus (UMGC) for their teachings and for helping me discover myself in the process. Thanks are due to Dr. James Gelatt for being the second reader for this dissertation and providing invaluable feedback and support. I am thankful to the following coursework professors: Dr. Marcia Bouchard, Dr. Joseph Drasin, Dr. Lisa Pearo, Dr. Tacy Holliday, Dr. Laura Witz, and Dr. Walter McCollum. A special thanks to Dr. Walter McCollum for helping me discover myself as a scholar-practitioner. I also want to thank the doctoral program management at UMGC, including Dr. Bryan Booth and Dr. Ravi Mittal, for sharing their insights and keeping me motivated. This doctoral journey was made possible with the administrative support and guidance of Marina Caminis and UMGC doctoral program librarian Cynthia Thomes. The executive summary of this dissertation was shared with academic and industry subject matter experts. My gratitude is due to Professor Tim Baines for his prompt response to my requests and his guidance over the last year. I am thankful to Professor Christian Kowalkowski, for taking the time to provide valuable feedback, including the history of servitization and providing key points that aided my research. I am grateful to Dr. Giuliano SERVITIZATION ENABLERS FOR B2B MANUFACTURING vii Marodin for pointing me to Dr. Alejandro Frank to become a subject matter expert for this dissertation. Dr. Frank very promptly provided me detailed feedback on the executive summary of this dissertation. Dr. Frank’s feedback brought forward many valuable points that have solidified my research and have added tremendous value. From the manufacturing industry perspective, I am incredibly grateful and thankful to Mr. Ron Giuntini for spending time with me in lengthy discussions and advising me on the direction of servitization and the manufacturing industry in general. The white papers, talks, and information shared by Ron have contributed to the practitioner knowledge that has aided my dissertation. Gratitude is also due to Mr. John Stokes, who agreed to become a subject matter expert for this dissertation. I have thoroughly enjoyed the conversations and insights that John has brought forward. His willingness to go above and beyond in helping me is deeply appreciated. I am also thankful to Mr. David Reiling for reviewing the executive summary for this dissertation and providing a relevant industry perspective. David’s promptness and insights were immensely helpful. I am also thankful to my cohort members who provided me the opportunity to learn and refine my thinking abilities by sharing unique and thought-provoking perspectives. This journey would not have been complete without their support. In alphabetical order of first name, they are Bernard Rizkallah, Bill Woody, Darven Mobley, David McCullin, Flore Nadine Storey, Heather Johnson, Hiwot Mengesha, Katherine Kemmerer, Kristen Tarr, Mahasin Abdullah, Maribel Lee, Michael Harrison, Louis Eguzo, and Osama El-Lissy. Lastly, this dissertation would not have been possible without the support and motivation from my wife. She not only convinced me to begin this journey, but she kept me going through both the challenging and good times. SERVITIZATION ENABLERS FOR B2B MANUFACTURING viii Table of Contents ABSTRACT .......................................................................................................................... I PREFACE .......................................................................................................................... IV DEDICATION ..................................................................................................................... V ACKNOWLEDGMENTS ..................................................................................................... VI TABLE OF CONTENTS .................................................................................................... VIII LIST OF TABLES ............................................................................................................ XIII LIST OF FIGURES ............................................................................................................ XV LIST OF ABBREVIATIONS ............................................................................................. XVI CHAPTER 1: INTRODUCTION AND OVERVIEW OF THE MANAGEMENT PROBLEM ......... 1 BACKGROUND AND OVERVIEW ........................................................................................................................ 2 Move to Servitization ............................................................................................................................... 3 Industry 4.0 and Technology .................................................................................................................. 4 Servitization in the Era of Industry 4.0 .................................................................................................. 6 PROBLEM STATEMENT AND SIGNIFICANCE OF THE PROBLEM ........................................................................... 7 Problem Relevancy ................................................................................................................................. 7 Research Gap .......................................................................................................................................... 9 PURPOSE OF THE RESEARCH AND THE RESEARCH QUESTION ......................................................................... 10 Scope of Research .................................................................................................................................. 10 Research Question ................................................................................................................................. 15 Significance of the Research .................................................................................................................. 16 DISCUSSION OF THEMES IDENTIFIED FROM SCOPING REVIEW ........................................................................ 18 DEFINITIONS AND TERMINOLOGY .................................................................................................................. 19 CHAPTER SUMMARY ..................................................................................................................................... 21 ORGANIZATION OF THE DISSERTATION .......................................................................................................... 23 CHAPTER 2: SCOPING LITERATURE REVIEW AND THEORETICAL FRAME ................... 24 THEORETICAL FRAMEWORK .......................................................................................................................... 27 Dynamic Capabilities Theory ................................................................................................................ 27 Servitization in Dynamic Capabilities Theory Context ........................................................................ 29 SCOPING LITERATURE REVIEW ..................................................................................................................... 30 SERVITIZATION ENABLERS FOR B2B MANUFACTURING ix Information and Communication Technology ..................................................................................... 31 Customer Focus ..................................................................................................................................... 34 Partnerships .......................................................................................................................................... 36 Culture and Organizational Change Management ............................................................................. 38 Risks with Servitization ........................................................................................................................ 40 CONCEPTUAL FRAMEWORK ........................................................................................................................... 41 CHAPTER SUMMARY ..................................................................................................................................... 43 CHAPTER 3: METHOD ...................................................................................................... 45 REVIEW DESIGN AND METHODOLOGY ........................................................................................................... 45 The Evidence-Based Research Framework .......................................................................................... 45 Systematic Reviews ............................................................................................................................... 46 Systematic Review Process .................................................................................................................... 47 Search Strategy .................................................................................................................................... 50 Method of Quality Appraisal of the Included Studies .......................................................................... 55 PRISMA diagram .................................................................................................................................. 58 ANALYSIS AND SYNTHESIS METHODOLOGY .................................................................................................... 59 Method of Synthesis .............................................................................................................................. 60 SUBJECT MATTER EXPERTS ........................................................................................................................... 61 SME Acquisition Process ....................................................................................................................... 63 SME Questionnaire ............................................................................................................................... 64 CHAPTER SUMMARY ..................................................................................................................................... 65 CHAPTER 4: ANALYSIS AND FINDINGS ........................................................................... 66 DESCRIPTION OF THE DATA SET .................................................................................................................... 67 Identification of Academic Literature .................................................................................................. 68 Identification of Snowballed Literature ............................................................................................... 69 Identification of Grey Literature ........................................................................................................... 69 Screening Results .................................................................................................................................. 70 RESULTS OF THE QUALITY APPRAISAL OF THE DATA SET ................................................................................ 70 SERVITIZATION ENABLERS FOR B2B MANUFACTURING x Quality Appraisal Results ...................................................................................................................... 71 Articles selected for Coding and Analysis ............................................................................................. 71 Final PRISMA Details ............................................................................................................................ 72 RESULTS OF THE CODING PROCESS ................................................................................................................ 73 FINDINGS AND DISCUSSION ........................................................................................................................... 76 Finding 1: Engaged Leadership, Vision, and Organizational Culture ................................................ 77 Finding 2: Change Management and Organizational Structure ....................................................... 83 Finding 3: Inculcating Customer Focus Across the Entire Organizational Value Chain .................. 89 Finding 4: Investing in Continuous Innovation ................................................................................. 103 SUMMARY OF FINDINGS .............................................................................................................................. 112 Finding 1 and Enablers ........................................................................................................................ 113 Finding 2 and Enablers ....................................................................................................................... 114 Finding 3 and Enablers ....................................................................................................................... 114 Finding 4 and Enablers ........................................................................................................................ 115 REVISED CONCEPTUAL FRAMEWORK ........................................................................................................... 116 CHAPTER SUMMARY