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Title: A through-life costing methodology for use in product-service-systems
Authors: Newnes, Linda B.
Thenent, Nils E.
Parry, Glenn
Goh, Yee M.
Keywords: Availability contracting
Cost estimation
Defence and aerospace
Product-service systems
Through-life costing
Issue Date: 2014
Publisher: © Elsevier
Citation: SETTANNI, E. ... et al, 2014. A through-life costing methodology for use in product-service-systems. International Journal of Production Economics, 153, pp.161-177.
Abstract: Availability-based contracts which provide customers with the use of assets such as machines, ships, aircraft platforms or subsystems like engines and avionics are increasingly offered as an alternative to the purchase of an asset and separate support contracts. The cost of servicing a durable product can be addressed by Through-life Costing (TLC). Providers of advanced services are now concerned with the cost of delivering outcomes that meet customer requirements using combinations of assets and activities via a Product Service System (PSS). This paper addresses the question: To what extent are the current approaches to TLC methodologically appropriate for costing the provision of advanced services, particularly availability, through a PSS? A novel methodology for TLC is outlined addressing the challenges of PSS cost assessment with regard to 'what?' (cost object), 'why/to what extent?' (scope and boundaries), and 'how?' (computations). The research provides clarity for those seeking to cost availability in a performance-orientated contractual setting and provides insight to the measures that may be associated with it. In particular, a reductionist approach that focuses on one cost object at a time is not appropriate for a PSS. Costing an advanced service delivered through a PSS is a problem of attributing the value of means to the economic activities carried out for specific ends to be achieved. Cost results from the interplay between monetary and non-monetary metrics, and uncertainties thereof. Whilst seeking to ensure generality of the findings, the application of TLC examined here is limited to a military aircraft platform and subsystems. © 2014 Elsevier B.V. All rights reserved.
Description: This definitive published version of this article is available from: http://dx.doi.org/10.1016/j.ijpe.2014.02.016
Sponsor: The authors gratefully acknowledge the support provided by the Department of Mechanical Engineering at the University of Bath, the Innovative electronics Manufacturing Research Centre (IeMRC) and the Engineering and Physical Sciences Research Council (EPSRC) for funding the research.
Version: Accepted for publication
DOI: 10.1016/j.ijpe.2014.02.016
URI: https://dspace.lboro.ac.uk/2134/17067
Publisher Link: http://dx.doi.org/10.1016/j.ijpe.2014.02.016
ISSN: 0925-5273
Appears in Collections:Published Articles (Mechanical, Electrical and Manufacturing Engineering)

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