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Procedia CIRP 30 (2015) 457 461

7th Industrial Product-Service Systems Conference - PSS, industry transformation for sustainability and
business

Service Value Stream Mapping in Industrial Product-Service System

Performance Management
Friedrich Morlocka,*, Horst Meiera
a
Ruhr-Universitt Bochum, Chair of Production Systems, 44801 Bochum, Germany

* Corresponding author. Tel.: +49 234 32 29890; fax: +49 234 32 09890; E-mail address:morlock@lps.rub.de

Abstract

Machine manufacturers who additionally offer services and also service providers are facing an increasingly keen competition. This leads to the
fact that services have to be performed more effectively and efficiently. As a result, companies are progressively implementing Performance
Measurement approaches in order to get an overview of the delivered performance. By the use of those approaches, the delivery phase of services
becomes more transparent, but conclusions are marginally drawn or improvements are not initialized from the data base. This is mainly caused
by the fact that Performance Measurement approaches indeed offer a useful basis of decision making but is no appropriate tool for process
improvements. In recent years, the Lean Management approach has been established in companies production for process improvements. One
determining tool is Value Stream Mapping, which gives an overview of processes and shows process improvements. This article represents an
adaption of the Value Stream Mapping for services and shows how it can be integrated into a Performance Management.
2015 The Authors. Published by Elsevier B.V This is an open access article under the CC BY-NC-ND license
2015 The Authors. Published by Elsevier B.V.
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Scientific Committee of the Conference is co-chaired by Prof. Daniel Brissaud & Prof.
Peer-review under responsibility of the International Scientific Committee of the 7th Industrial Product-Service Systems Conference - PSS,
Xavier BOUCHER.
industry transformation for sustainability and business
Keywords: lean, value stream mapping, performance measurement, key performance indicator

1. Introduction approaches is the transparency and measurability of certain

The service sector is increasingly gaining importance for
machine manufacturers. While in the new machine business, a
rate of return of approx. 3% is acquired, it is possible to
generate a rate of return up to 30% with service business [1].
Because of this revenue potential, an increasing number of
competitors is moving to the market of industrial services and
industrial product-service systems, which leads to an increasing
cost, quality and time pressure [2]. Particularly the Use Phase
is of great importanceas it observes if the developed and
planned services generate the effective performance [3]. As the
name suggests, Performance Measurement approaches scale
the performance of company items [4]. Performance
Measurement approaches are applied in different fields of
application. Over the last years, approaches for IPS have been
developed [3]. The advantage of Performance Measurement
fields. However, in rare cases, specific actions are
systematically derived [5]. This is, to a large extent, caused by
the fact that Key Performance Indicators (KPIs) do not yet offer
action dissipation and that the knowledge of employees is
constantly necessary.
Therefore, Performance Measurement approaches also
address the management as an extension to the Performance
Measurement by planning, controlling and monitoring the
performance [6]. As a consequence, in addition to a
Performance Measurement, a method is required that
methodically supports improvements for an integrated IPS
Performance Management. This article shall represent an
extension of the Performance Measurement for IPS to an
integrated Performance Management. Furthermore, a method
for process improvements for IPS called Value Stream

2212-8271 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Scientific Committee of the 7th Industrial Product-Service Systems Conference - PSS,
industry transformation for sustainability and business
doi:10.1016/j.procir.2015.02.128
458 Friedrich Morlock and Horst Meier / Procedia CIRP 30 (2015) 457 461
Mapping [2] shall be described, which is integrated in IPS
Performance Management.
For this purpose, conceptual basics are set in section 2, the
integration of the process improvement method into the
Performance Management is introduced in section 3 and the
new method is presented in section 4.
2. Conceptual Background for Service Stream Mapping
For a lifecycle phase, special attention is drawn to the IPS
delivery because it enables the measurement of the effective
performance of delivery processes that have been planned in the
Development Phase. This is presented in section 2.1. Section
2.2 gives an overview of existing visualization methods for
process improvement. Performance Management, and the
distinction from Performance Measurement is described in
section 2.3.
2.1. IPS Delivery
The lifecycle of IPS is divided into the five phases of
planning, development, implementation, delivery and use as
well as a closure phase [7]. The Use Phase is characterized by
the cooperation between the IPS provider, customer, IPS
module suppliers, component suppliers and service suppliers
[8]. The partners resources are allocated by virtual
organizational units. The delivery planning requests the
availability of resources and generates a delivery plan, which is
binding for all partners. As a consequence, each partner knows
at what time which delivery process has to be conducted by
him.
2.2. Methods and Tools for the Visualization
For production, there are many process visualization
methods like Event-driven Process Chain (EPC), Unified
Modeling Language (UML) or value stream analyzes. For IPS
and services, many development tools are available (see [9,
10]); however, there are marginal approaches which address the
delivery phase. Schenk et al. [11] have observed several
standardized modeling approaches like UML or EPC for the
application in services and have found these to be not suitable.
However, UML and Service Blueprint fulfil the most criteria of
depicting interactive service processes between service
provider and customer. Therefore, Schenk et al. have developed
a combination of both methods. This combination has the
advantage that important areas of accountability and the rate of
customer integration can be depicted.
Service Blueprint which was considered by Schenk et al.
[11] is an established method for process depiction in service
areas and goes back to Shostack [12]. The modeling approach
has the goal to enable a systematical visualization and an
analysis of service processes. Since service processes are
always conducted with the customer, there is a special focus on
the interaction between service provider and customer. The
modeling approach is based on a flowchart, which depicts the
activities of provider and customer in a chronological order. As
a consequence, interfaces resp. contact points with the customer
are systematically identified and analyzed. These points are
characterized as moments of truth. [13]
2.3. Performance Management
Performance Measurement is the development of an
indicator system which has only considered KPIs [14].
Performance Measurement compromises the assembling and
effort of KPIs of different dimensions which are used to assess
the effectiveness and efficiency of the performance of different
organizational units [4]. The terms Performance Measurement
and Performance Management are often used synonymously in
science and industry [15]. In fact, Performance Management
faces the task of managing in addition to measuring. This
contains the planning, controlling and monitoring of
performance [6].
3. IPS Performance Management for the IPS Delivery
Phase
As it has been described in the previous section,
Performance Management approaches focus on the
management of performance by considering planning,
controlling and monitoring activities.
Lange categorizes subtasks of the Performance Management
according to Schnetzler [16] and Deming [17] by reference to
the Deming cycle (PDCA-cycle). A continuous performance
improvement in Performance Management is realized by a
Performance Planning (Plan), Performance Measurement (Do),
Performance Assessment (Check) and Performance
Improvement (Act). During the first phase Plan, relevant
KPIs based on internal and customer demands are detected and
a procedure for a Performance Improvement is developed.
During the phase Do, improvements are tested and the
effectiveness of performance delivery is detected. The Check
Phase contains the interpretation, analysis and evaluation of
results from the Do Phase. During the phase Act, a new
cycle is initiated either when goals in the Check Phase are not
accomplished or the effective arrangements are spread as a
standard.
The PDCA-cycle is also applicable for the IPS Performance
Management (see figure 1) since for IPS a continuous
improvement is of particular importance [18]. On the one hand,
it is attributable to the fact that in IPS the customers benefit
has priority that can only be achieved by a long-term and
faithful collaboration. On the other hand, partial different
business models require the IPS provider to steadily improve
his processes in order to continue to guarantee the customers
benefit and to ensure his own efficiency. This is necessary so
that IPS can be offered at economically advantageous prices.
 Friedrich Morlock and Horst Meier / Procedia CIRP 30 (2015) 457 461 459

consideration of the production view, time aspect (e.g. cycle

time) and characteristics of IPS (e.g. allocation time of
Plan Do
resources and travel time of service technicians) leads to the
Performance Planning Performance Measurement necessity for a new visualization method for the Use Phase of
IPS.
IPS Performance
Management 4.2. Service Value Stream Mapping

Section 4.1 shows that the Service Blueprint accomplishes

Act Check
most requirements. However, central elements of operation
Performance Improvement Performance Assessment visualization are not taken into account like the observation of
process times and KPIs together with the view on production
and products, which is indispensable for IPS. In this respect,
Figure 1: IPS Performance Management as a continuous improvement the Value Stream Analysis has proved successful in
process
manufacturing which is applied for the purpose of Lean
Management [22]. Therefore, a conjunction of Service
The IPS Performance Measurement Method [3] is part of
Blueprint and the Value Stream Analysis is reasonable. A
the IPS-Execution System which is the central management
further argument for the application of the Value Stream
system of IPS delivery and conducts the delivery planning and
Analysis as a basis of operation visualization of IPS is that the
organization of IPS delivery [19]. Thereby, the IPS
Lean Management approach in companies production is
Performance Measurement Method monitors KPIs of delivery
already established and the Value Stream Analysis is a proven
planning and delivery. For the purpose of the IPS Performance
and common method in companies. Furthermore, the Lean
Management, delivery KPIs are of particular interest. By means
approach is increasingly expanding in further business areas
of process feedbacks of the IPS control system [20] that is
like After Service [23] or technical customer service [24].
assigned by a ReSTbased web service, delivery KPIs like First
The disadvantage of the Value Stream Analysis is that the
Time Fix or On Time Delivery of the respective partners and
customer is only depicted as a black box and that the interaction
processes can be defined. This is caused by process feedback
with the customer is limited to the delivery of products, which
that contains information like the delivery process ID, the
is eliminated by the Service Blueprint using the following
process start and end time and the numbers of errors during the
elements.
process execution. An exemplary list for ascertainable KPIs can
The interaction with the customer is depicted by a line of
be found in [3]. However, it is obvious that a systematic method
interaction and a line of visibility. The line of interaction shows
for an analysis and improvement of delivery processes is
in which activities of the delivery process the customer is
missing. This gap shall be closed by Service Value Stream
involved. In contrast, the line of visibility shows which
Mapping which is presented in the next section.
activities the customer indeed observes but in which he is not
involved. This systematics is implemented in the Service Value
4. Service Value Stream Mapping Approach
Stream Mapping. Thereby, time components of these lines are
newly added. In the Value Stream Analysis, the cycle time
4.1. Requirements
plays an important role whereas in the Service Blueprint, it is
not ascertained. In the IPS and service context, cycle time
In contrast to developing methods, visualizing methods in
means the problem solving time, thus the time from the problem
operation shall regard the requirements of operation. General
appearance to the problem solved.
requirements for process visualizing methods were established
Also in IPS and services, the cycle time is of great interest
by [21]. For example, the information flow and involved people
because the customer and the IPS provider are constantly
and organizational units shall be depicted. However, there are
interested in a fast problem solution. Moreover, the line of
further requirements coming up for IPS. Based on a close
interaction enables a distinction of a customer process time and
cooperation with the customer and a focus on the customers
a customer interaction time within the cycle time. The customer
value, a depiction from the customers point of view on
process time contains the time which the customer has to spend
processes is necessary. This contains contact points with the
by himself during the delivery process, e.g. reading out an error
customer and different interactions degrees. The depiction of
code. By contrast the customer interaction time contains the
the inclusion of external partners is also necessary, because
time which the customer has to spend along with the IPS
performance delivery in IPS takes place in networks. Another
provider, e.g. during repair works. The correlation of lines and
requirement for IPS is the consideration of both worlds
times is depicted in figure 2:
service and production. Visualizing methods for business will
subsequently be investigated concerning the described
requirements.
As Schenk et al. [11] have noticed after their analysis of
several standardized modeling methods, the services Blueprint
and UML fit best for service requirements. Schenks
combination of both methods improves the service Blueprint
and is a useful tool for service visualization. But the missing
460 Friedrich Morlock and Horst Meier / Procedia CIRP 30 (2015) 457 461
Customer
Customer
Interaction Process Time
Process Time
Time
Process 1 Process 2
Customer
Swimlane
Process 3
IPS
Provider Process 2 Process 3
Swimlane
Figure 2: Customer interaction in the Service Value Stream
These special attributes and the startup times for delivery
processes lead to the necessity to augment the notation of the
Value Stream Analysis. The augmented notation of the Value
Stream Analysis is depicted in figure 3:
Notation Description
t=
Planned waiting time for delivery
processes
Travel time for delivery processes
1 Number of employees
p2
? Branch (consideration of event
probabilities [p1 + p2=1])
p1
Figure 3: Notation of the Service Value Stream Mapping [2]
The implementation of the Service Value Stream Mapping
should always take place in teams in order to collect different
knowledge and expertise. All organizational units participating
in the process should be integrated as well as the customer and
external partners. Likewise, it is important to acquire the
experienced and effectively performed process and not to
describe the planned process of the development. An exemplary
performance of the Service Value Stream for the purpose of
IPS Performance Management is presented in the next section.
5. Use Case
The company that performs the use case is an IPS provider
that performs an availability-oriented business model for a
watch manufacturer. Thereby, the watch manufacturer has
bought the availability of micro milling machines for the
production of clockwork sheets. For the purpose of the IPS
Performance Management, it was identified in the Plan Phase
that the IPS provider as a quality leader specially focuses on
the index First Time Fix. By the use of the IPS Performance
Measurement Method, it was identified in operation that the
First Time Fix in the deliver process Inference Suppression
Micro Milling Spindle is located below steadily defined
interference limits which have been determined by a benchmark
with other competitors. The Service Value Stream Mapping
shall help to identify causes and to achieve improvements. For
this purpose, the delivery process Interference Suppression
Micro Milling Spindle has been acquired (see figure 4).
Line of interaction
Line of visibility
Figure 4: Service Value Stream Mapping of the process Interference
Suppression Micro Milling Spindle
The Service Value Stream shows potential for optimization
concerning queries in process. A small data base comes in
addition resp. knowledge of interferences before the process is
performed. In the Do Phase, a guideline has been developed by
the process team which is performed between machine
operators and IPS providers before the journey. In addition, a
user support (e. g. [25]) has been implemented in order to offset
the missing practical knowledge.
In the Check Phase after the implementation of
improvements, it has been detected in an effectiveness
inspection that the First Time Fix has significantly improved
and no further adaption is necessary. After that, these
improvements have been determined in the Act Phase as an IPS
providers standard for the delivery process Interference
Suppression Micro Milling Spindle.
6. Conclusion and outlook
In this contribution, the approach of IPS Performance
Management as a PDCA-Cycle with the phases of Performance
Planning, Performance Measurement, Performance
Assessment and Performance Improvement have been
introduced. The already developed IPS Performance
Measurement Method [3] takes a central role because it
provides KPIs for performance managing. A method for an
analysis, visualization and improvement of delivery processes
in operation has been missing so far. For this purpose, the
Service Value Stream Mapping as a connection of the Value
Stream Analysis with the Service Blueprint has been
introduced. Thereby, a process depiction of production and
services together with the interaction with the customer and
corresponding times is possible. The application of Service
Value Stream Mapping for the purpose of IPS Performance
Management has been depicted in a use case.
In order to ensure an integrated approach of IPS
Performance Management, a support for the deduction of
relevant business goals is necessary in the Plan Phase. For this
 Friedrich Morlock and Horst Meier / Procedia CIRP 30 (2015) 457 461
a new method is required. Especially, to consider IPS
characteristics like different business models. With this
information the IPS provider knows which KPIs are important
to reach the company goals. During the Use Phase the IPS
provider has to take these KPIs into account.
Acknowledgements
We express our sincere thanks to the German Research
Foundation (Deutsche Forschungsgemeinschaft, DFG) for
financing this study within the Collaborative Research Center
Transregio 29 (CRC/TR 29) on Industrial Product-Service
Systems dynamic interdependencies between products and
services in the production area.
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