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Pricing is one of the most important, but underestimated tools, to enhance a company's profitability. Especially value-based pricing has a high potential to reach higher levels of satisfaction because it equates the needs of providers and customers. Even though, it is a well-known price model and promises higher satisfaction, many companies struggle to implement it. Especially the manufacturing industry is characterized by cost-plus pricing and competition-based pricing. However, especially for digital products these pricing strategies are insufficient. Therefore, this paper aims at exploring the design fields for value-based pricing of digital products in the manufacturing industry. To achieve this, the basics of digital products and value-based pricing are explored. Furthermore, an expert workshop is conducted that follows a framework for value-based pricing consisting of four consecutive steps analysis, price strategy, pricing, and market launch to capture the design fields. This paper concludes with limitations, and practical and research implications.
Gap Analysis for CO2 Accounting Tool by Integrating Enterprise Resource Planning System Information
(2023)
Detailed carbon accounting is the foundation for reducing CO2 emissions in manufacturing companies. However, existing accounting approaches are primarily based on manual data preparation, although manufacturing companies already have a variety of IT systems and resulting data available. The gap analysis carried out based on the GHG Protocol and an reference ERP system shows how much of the required information for CO2 accounting can be integrated from an ERP system. The ERP system can cover 20 % of the required information. The information availability can be increased to 49 % through additionally identified modifications of the ERP system. Integrating the CO2 accounting tool with other systems of the IT landscape, e. g. Energy Information System, enables an additional increase.
Manufacturing companies face the challenge of managing vast amounts of unstructured data generated by various sources such as social media, customer feedback, product reviews, and supplier data. Text-mining technology, a branch of data mining and natural language processing, provides a solution to extract valuable insights from unstructured data, enabling manufacturing companies to make informed decisions and improve their processes. Despite the potential benefits of text mining technology, many manufacturing companies struggle to implement use cases due to various reasons. Therefore, the project VoBAKI (IGF-Project No.: 22009 N) aims to enable manufacturing companies to identify and implement text mining use cases in their processes and decision-making processes. The paper presents an analysis of text mining use cases in manufacturing companies using Mayring's content analysis and case study research. The study aims to explore how text mining technology can be effectively used in improving production processes and decision-making in manufacturing companies.
With the development of publicly accessible broker systems within the last decade, the complexity of data-driven ecosystems is expected to become manageable for self-managed digitalisation. Having identified event-driven IT-architectures as a suitable solution for the architectural requirements of Industry 4.0, the producing industry is now offered a relevant alternative to prominent third-party ecosystems. Although the technical components are readily available, the realisation of an event-driven IT-architecture in production is often hindered by a lack of reference projects, and hence uncertainty about its success and risks. The research institute FIR and IT-expert synyx are thus developing an event-driven IT-architecture in the Center Smart Logistics' producing factory, which is designed to be a multi-agent testbed for members of the cluster. With the experience gained in industrial projects, a target IT-architecture was conceptualised that proposes a solution for a self-managed data-ecosystem based on open-source technologies. With the iterative integration of factory-relevant Industry 4.0 use cases, the target is continuously realised and validated. The paper presents the developed solution for a self-managed event-driven IT-architecture and presents the implications of the decisions made. Furthermore, the progress of two use cases, namely an IT-OT-integration and a smart product demonstrator for the research project BlueSAM, are presented to highlight the iterative technical implementability and merits, enabled by the architecture.
Based on the increasingly complex value creation networks, more and more event-based systems are being used for decision support. One example of a category of event-based systems is supply chain event management. The aim is to enable the best possible reaction to critical exceptional events based on event data. The central element is the event, which represents the information basis for mapping and matching the process flows in the event-based systems. However, since the data quality is insufficient in numerous application cases and the identification of incorrect data in supply chain event management is considered in the literature, this paper deals with the theoretical derivation of the necessary data attributes for the identification of incorrect event data. In particular, the types of errors that require complex identification strategies are considered. Accordingly, the relevant existing error types of event data are specified in subtypes in this paper. Subsequently, the necessary information requirements and information available regarding identification are considered using a GAP analysis. Based on this gap, the necessary data attributes can then be derived. Finally, an approach is presented that enables the generation of the complete data set. This serves as a basis for the recognition and filtering out of erroneous events in contrast to standard and exception events.
The complexity and volatility of companies’ environment increase the relevance of disruption preparation. Resilience enables companies to deal with disruptions, reduce their impact and ensure competitiveness. Especially in the context of procurement, disruptions can cause major challenges while resilience contributes to ensuring material availability. Even though past disruptions have posed various challenges and companies have recognized the need to increase resilience, resilience is often not designed systematically. One major challenge is the number of potential measures to increase resilience. The systematic design of resilience thus requires a detailed understanding of domain-specific measures. This also includes an understanding of the contribution of these measures to different resilience components and their interdependencies. This paper proposes a systematic approach for configuring resilience in procurement which enables the evaluation and selection of resilience measures. Based on a resilience framework, a resilience configurator is developed. The basis of the configurator are resilience potentials that have been characterized and clustered. Overarching approaches to design resilience and indicators to evaluate resilience are presented. Moreover, a procedure is proposed to ensure practical applicability. To evaluate the results two case studies are conducted. The results enable companies to systematically design their resilience in procurement.
More and more companies in the mechanical and plant engineering industry are transforming their business model and evolving from product to solution providers. Subscription business models play a key role in this development. They enable companies to enter long-term collaborative relationships with customers and thus monetize the potential of Industry 4.0. However, this development is not easy for many companies and is associated with numerous hurdles. One of these hurdles is the development of a suitable range of services tailored to customer needs. In this context, the bundling of individual services to service modules plays a key role in realizing new value propositions. In practice, however, companies often lack an understanding of which services need to be combined in what way to be able to realize new value propositions. Accordingly, the goal of this work is to identify relevant services for subscription business models, to cluster them into meaningful value-adding bundles, and to derive new value propositions accordingly. The new value propositions in turn enable mechanical and plant engineering companies to strengthen customer loyalty and thus achieve long-term economic success.
The mechanical and plant engineering industry faces a stagnation in the new machinery market and is relying on innovative business models such as subscription to overcome these. In this business model, individually customized solution packages are offered. The success of these models depends directly on the future success of the customer, making the selection of the right customers crucial. The aim of this paper is to identify the criteria that indicate the suitability of customers for subscription models. While there are individual descriptions of suitability criteria in the existing literature, there is a lack of comprehensive consideration of customer relationship, customer company, and customer market, as the extensive consideration was not necessary in the transactional sale of machines until now. Therefore, in this study, expert interviews are conducted with companies in mechanical and plant engineering that offer subscription models. The results show criteria that are used to evaluate customers in the six main categories of creditworthiness, market potential, benefit potential, feasibility, relationship, and sales effort. In total, 24 criteria can provide insight into the suitability of the customer for a successful subscription relationship. These criteria are intended to develop target systems that meet the requirements of different stakeholders in the customer and thus support the economic viability of these business models.
The adoption of artificial intelligence (AI) technologies in manufacturing companies is challenging, particularly for SMEs that lack the necessary skills to develop and integrate AI-based applications (AI applications) into their existing IT system landscape. To address this challenge, the research project VoBAKI (IGF-Project No.: 22009 N) aims to enable SMEs to identify and close skill gaps related to AI application development and implementation using proper sourcing strategies. This paper presents the interim results from the second phase of the project, which involves identifying the tasks in the lifecycle of AI applications and determining the specific skills required for executing these tasks. The presented results provide a detailed lifecycle including the phases for the development and usage of AI applications, as well as the specific tasks that SMEs must consider when implementing an AI application. These results serve as the foundation for future research regarding the required skills to execute the presented tasks and provide a roadmap for SMEs to close skill gaps and successfully implement AI applications.
Due to shorter product life cycles and the increasing internationalization of competition, companies are confronted with increasing complexity in supply chain management. Event-based systems are used to reduce this complexity and to support employees' decisions. Such event-based systems include tracking & tracing systems on the one hand and supply chain event management on the other. Tracking & tracing systems only have the functions of monitoring and reporting deviations, whereas supply chain event management systems also function as simulation, control, and measurement. The central element connecting these systems is the event. It forms the information basis for mapping and matching the process sequences in the event-based systems. The events received from the supply chain partner form the basis for all downstream steps and must, therefore, contain the correct data. Since the data quality is insufficient in numerous use cases and incorrect data in supply chain event management is not considered in the literature, this paper deals with the description and typification of incorrect event data. Based on a systematic literature review, typical sources of errors in the acquisition and transmission of event data are discussed. The results are then applied to event data so that a typification of incorrect event types is possible. The results help to significantly improve event-based systems for use in practice by preventing incorrect reactions through the detection of incorrect event data.
Companies operate in an increasingly volatile environment where different developments like shorter product lifecycles, the demand for customized products and globalization increase the complexity and interconnectivity in supply chains. Current events like Brexit, the COVID-19 pandemic or the blockade of the Suez canal have caused major disruptions in supply chains. This demonstrates that many companies are insufficiently prepared for disruptions. As disruptions in supply chains are expected to occur even more frequently in the future, the need for sufficient preparation increases. Increasing resilience provides one way of dealing with disruptions. Resilience can be understood as the ability of a system to cope with disruptions and to ensure the competitiveness of a company. In particular, it enables the preparation for unexpected disruptions. The level of resilience is thereby significantly influenced by actions initiated prior to a disruption. Although companies recognize the need to increase their resilience, it is not systematically implemented. One major challenge is the multidimensionality and complexity of the resilience construct. To systematically design resilience an understanding of the components of resilience is required. However, a common understanding of constituent parts of resilience is currently lacking. This paper, therefore, proposes a general framework for structuring resilience by decomposing the multidimensional concept into its individual components. The framework contributes to an understanding of the interrelationships between the individual components and identifies resilience principles as target directions for the design of resilience. It thus sets the basis for a qualitative assessment of resilience and enables the analysis of resilience-building measures in terms of their impact on resilience. Moreover, an approach for applying the framework to different contexts is presented and then used to detail the framework for the context of procurement.
Generation of a Data Model For Quotation Costing Of Make To Order Manufacturers From Case Studies
(2022)
For contract or make to order manufacturers, quotation costing is a complex process that is mainly performed based on experience. Due to the high diversity of the product range of these mostly small or medium-sized companies (SMEs) and the poor data situation at the time of quotation preparation, the quality of the calculation is subject to strong variations and uncertainties. The gap between the initial quotation costing and the actual costs to be spent (pre- and post-calculation) is crucial to the existence of SMEs. Digitalization in general can help companies to get a better understanding of processes and to generate data. For improving these processes, an understanding of the important data for that specific process is crucial. Accurate quotation costing for customized products is time-consuming and resource-intensive, as there is a lack of an overview of data to be used within the process. This paper therefore derives a data model for supporting quotation costing in the company, based on literature-based costing procedures and recorded case studies for quotation and calculation. Based on the results, SMEs will have a first overview of the needed data for quotation costing to optimize their calculation process.
Methods of machine learning (ML) are notoriously difficult for enterprises to employ productively. Data science is not a core skill of most companies, and acquiring external talent is expensive. Automated machine learning (Auto-ML) aims to alleviate this, democratising machine learning by introducing elements such as low-code / no-code functionalities into its model creation process. Multiple applications are possible for Auto-ML, such as Natural Language Processing (NLP), predictive modelling and optimization. However, employing Auto-ML still proves difficult for companies due to the dynamic vendor market: The solutions vary in scope and functionality while providers do little to delineate their offerings from related solutions like industrial IoT-Platforms. Additionally, the current research on Auto-ML focuses on mathematical optimization of the underlying algorithms, with diminishing returns for end users. The aim of this paper is to provide an overview over available, user-friendly ML technology through a descriptive model of the functions of current Auto-ML solutions. The model was created based on case studies of available solutions and an analysis of relevant literature. This method yielded a comprehensive function tree for Auto-ML solutions along with a methodology to update the descriptive model in case the dynamic provider market changes. Thus, the paper catalyses the use of ML in companies by providing companies and stakeholders with a framework to assess the functional scope of Auto-ML solutions.
Industry 4.0 is driven by Cyber-Physical Systems and Smart Products. Smart Products provide a value to both its users and its manufacturers in terms of a closer connection to the customer and his data as well as the provided smart services. However, many companies, especially SMEs, struggle with the transformation of their existing product portfolio into smart products. In order to facilitate this process, this paper presents a set of smart product use-cases from a manufacturer’s perspective. These use-cases can guide the definition of a smart product and be used during its architecture development and realization. Initially the paper gives an introduction in the field of smart products. After that the research results, based on case-study research, are presented. This includes the methodological approach, the case-study data collection and analysis. Finally, a set of use-cases, their definitions and components are presented and highlighted from the perspective of a smart product manufacturer.
Manufacturing companies (MFRs) are increasingly extending their
portfolios with services and data-driven services (DDS) to differentiate themselves from competitors, tap new revenue potential, and gain competitive advantages through digitization and the subsequently generated data. Nonetheless, DDS fail more often than traditional industrial services and products within the first year on the market. Particularly, companies are failing to sell DDS successfully and efficiently with their existing (multi-level) distribution structures. Surprisingly, there is a lack of scientific research addressing this issue. Since there are currently no holistic models for an end-to-end description of distribution-tasks for DDS in the manufacturing industry, this paper contributes to a task-oriented reference model for mapping interactions in the multi-level distribution management. Therefore, a case study research approach is used, to identify and describe the interactions in the multi-level distribution management of DDS, as well as to develop a regulatory framework for MFRs and their multi-level distribution management. This research uses the established theoretical framework of Service-Dominant-Logic to address the co-creation in multi-level distribution management of DDS. As a result, this paper identifies different interaction variants as well as the need for a new management function with 4 main and 14 basic tasks.
Companies are transforming from transactional sales to providing solutions for their customers. Mostly, smart products, enabling companies to enhance their products by providing smart services to their customers, are a key building block in this transformation. However, the development of a smart product requires many digital skills and knowledge, which regular companies do not have. To facilitate the design and conceptualization of smart products, this paper presents a use-case-based information systems architecture prototype for smart products. Furthermore, the paper features the application and evaluation of the architecture on two different smart product projects. The use of such an architecture as a reference in smart product development serves as a huge advantage and accelerator for inexperienced companies, allowing faster entry into this new field of business. [https://link.springer.com/chapter/10.1007/978-3-031-14844-6_16]
Ongoing digitalization and Industry 4.0 enable the development of new business models due to the increase in available data and digital connected products. A promising business model type for the machinery and plant engineering industry are subscription models, consisting of products and services offered in return for continuous payments. However, subscription-based business models are associated with extensive changes in the traditional machinery and plant engineering industry, in particular, for small and medium-sized companies (SMEs). Established concepts for the development of value propositions and business models neglect important aspects, such as the integrated development and optimization of products and services across the entire life cycle or the data infrastructure. This paper presents a concept for a methodology to support SMEs developing value propositions within subscription models. Therefore, the systematic identification of customer benefits, the determination and prioritization of subscription relevant functionalities as well as the design of product and service elements addressing those functionalities are the main aspects on which the focus is placed on. The result is a subscription value proposition canvas for SMEs to address the impact of subscription models on products and services.
Methods of machine learning (ML) are difficult for manufacturing companies to employ productively. Data science is not their core skill, and acquiring talent is expensive. Automated machine learning (Auto-ML) aims to alleviate this, democratizing machine learning by introducing elements such as low-code or no-code functionalities into its model creation process. Due to the dynamic vendor market of Auto-ML, it is difficult for manufacturing companies to successfully implement this technology. Different solutions as well as constantly changing requirements and functional scopes make a correct software selection difficult. This paper aims to alleviate said challenge by providing a longlist of requirements that companies should pay attention to when selecting a solution for their use case. The paper is part of a larger research effort, in which a structured selection process for Auto-ML solutions in manufacturing companies is designed. The longlist itself is the result of six case studies of different manufacturing companies, following the method of case study research by Eisenhardt. A total of 75 distinct requirements were identified, spanning the entire machine learning and modeling pipeline.
More and more manufacturing companies are starting to transform the transaction-based business model into a customer value-based subscription business to monetize the potential of digitization in times of saturated markets. However, historically evolved, linear acquisition processes, focusing the transactionoriented product sales, prevent this development substantially. Elemental features of the subscription business such as recurring payments, short-term release cycles, data-driven learning, and a focus on customer success are not considered in this approach. Since existing transactional-driven acquisition approaches are not successfully applicable to the subscription business, a systematic approach to an acquisition cycle of the subscription business in the manufacturing industry is presented, aiming at a long-term participative business. Applying a grounded theory approach, a task-oriented model for themanufacturing industry was developed.
The model consisting of five main tasks and 14 basis tasks serves as best practice to support manufacturing companies in adapting or redesigning acquisition activities for their subscription business models.
Through data-based insights into customer behavior, products and service offers can be improved. For manufacturing companies, smart product-service systems (SPSS) offer the possibility to collect customer data during the usage phase of the product. As the focus on customer analytics is too often on sales and marketing, SPSS are overlooked as a source of customer data. However, manufacturing companies need to integrate data from all interactions with their customers along the complete customer journey to achieve a holistic data-based view of the customers. To identify these interactions and the customer data derived from them, the concept of a digital shadow will be applied to the customer journey. The projected results for the presented work in progress are a reference process model for the customer journey in manufacturing and a data model of the customer data created along this process.