Industrial Services


Services are becoming ever more important in business. Today, the gross income share of services in Germany exceeds 70%. Following this trend, many companies that previously focused solely on the sale of goods, strive to an extension of their business model: In order to realize new competitive advantages in domestic and international markets, they enrich their material goods with customer-specific services. This transformation to a provider of integrated solutions is called "Servitization" (Neely 2009). For this reason, so-called industrial services to companies of increasing importance. They benefit from the increasingly detailed data collected (on "Big Data"), e.g. concerning user profiles, failure statistics, usage history, accrued expenses, etc. Only these data allow in principle to end products and spare parts are delivered faster, cheaper and more targeted and technicians can be used more efficiently with the correct skills. This requires, however, also suitable methods of optimization, prognosis or predictive modeling. When used properly, such methods can minimize logistics costs, increase availability, prevent potential failures and improve repair planning. This is also enabled by latest "Technology Enabled Services" along with corresponding data transfer and analysis ("Internet of Things", automatic error detection, remote diagnostics, centralized collection of consumption data, etc.). The change from goods manufacturer to a provider of integrated solutions requires new services, transformation of business models as well as intelligent new contract types, which are addressed in the course as well.

More specifically, the lessons of this lecture will include:

  • Servitization – The Manufacturer's Transformation to Integrated Solution Provider
  • The "Services Supply Chain"
  • Spare Parts Planning – Forecasting, Assortment Planning, Order Quantities and Safety Stocks
  • Distribution Network Planning – Network Types, Models, Optimization
  • Service Technician Planning
  • Condition Monitoring, Predictive Maintenance, Diagnose Systems
  • Call Center Services
  • Full Service Contracts
  • IT-enabled Value-Added Services – Industrial Service Innovation

Learning Goals:
Participants understand the interrelation between Front-Office (Customer view, e.g. material availability, technician skills, maintenance quality, repair time) and Back-Office (Provider view, e.g. distribution planning, inventory optimization, technician work schedule, call center). They learn about forecasting algorithms for sporadic demands, which are typical in spare part supply, and they apply common inventory optimization models for stock planning. They also become familiar with full-cost service contracts, as well as with the latest product-related services that have been enabled only in recent years by modern IT and mobile technology.

Update March 2020: The lecture was offered the last time in the winter term 2019/20. The exam in the summer term 2020 is still open to all students. The exam in the winter term 2020/21 is only open to students that previously failed the exam.

Language of instructionGerman

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Pintelon, L., & Van Puyvelde, F. (2013). Asset Management. The Maintenance Perspective. Acco.

Chopra, S., & Meindl, P. (2007). Supply chain management. Strategy, planning & operation. In Das summa summarum des management (pp. 265-275). Gabler.

Koole, G. (2007). Call Center Mathematics: A scientific method for understanding and improving contact centers. Departement of Mathematics, Vrije Universiteit, Amsterdam.

Oliva, R., & Kallenberg, R. (2003). Managing the transition from products to services. International journal of service industry management, 14(2), 160-172.