Functional product development an explorative view

Abstract: Embodied in the concept of functional products is a shift in view for manufacturing companies as providers of physical artefacts to service providers. Furthermore, differentiation by offering added value, increased commitment towards customers, life-cycle commitment for the physical artefact and close collaboration between manufacturing companies are characteristics of the concept of functional products. On a business level, the concept of functional products are expressed as total offers, integrated solutions and/or functional sales. On a product development level, the integration of hardware, software and service aspects is identified. Accordingly, from one viewpoint the concept of functional products leads to a transition view and from another viewpoint the concept of functional products leads to an integration view. A shift in view and integration seem to be in opposition to each other. The purpose of this thesis is to explore what new approaches in product development are motivated by the concept of functional products. To understand the concept of functional products, the differences between hardware and service aspects have to be understood. A knowledge perspective frames the study. The focus is upon hardware and service knowledge. The work in this thesis approaches the concept of functional products from a product development perspective i.e. a development of physical artefacts viewpoint, bringing in service management literature. The studies are delimited to manufacturing companies acting in a business-to-business environment. The research strategy used encompasses an interpretive approach and qualitative material is generated in both interviews and meetings with industry people. Two perspectives emerge in the theoretical framework, a hardware perspective and a service perspective. A transition or a shift in view from a hardware perspective to a service perspective can take place on a business level, whereas on a product development level an integration view is necessary. The ability to alternate betweena service perspective including needs analysis and a hardware perspective including solutions has been presented. Thus, the importance of understanding needs is recognised for functional product development. New approaches for product development are found concerning integration of knowledge, collaboration and reflective approach to services. An open-minded approach to products where new products and offerings can emerge has also been discussed.