System Dynamics modeling for Product-Service Systems. A case study in the agri-machine industry

The increasing role of services in the strategic plans and the economics of industrial companies poses new relevant organizational and management challenges. Shifting from a transactional to a lifelong relational approach with the customer requires major consideration of those processes which are carried out through the service network. Empirical decisions for tackling such new market opportunities could turn out to be counterproductive if taken on the fly, affecting negatively the overall performance of a service network. This paper exploits the potential of continuous simulation as a support for handling decision making processes in a Product-Service System context. A System Dynamics model has been developed and, within this paper, has been specifically applied to quantitatively assess how the introduction of preventive maintenance contracts can influence the overall service performance of a manufacturer of farm machinery.