Blog by Inka Lappalainen and Marika Makkonen
Transforming logistics services towards S-D logic approach
Companies focusing on logistics services are called for proactive approach to develop customized service concepts to operate and manage complex material, information and capital flows in customers' value chains and networks.
An ideal example for that kind of trend provides our collaboration with HUB logistics which aimed at developing new conceptual tools for key customer relations in rapidly growing business areas (see here and here for more).
The focus was in future modes for customer collaboration from strategic and operational perspectives and developing a conceptual framework for resource integration by applying S-D logic approach (Vargo & Lusch 2008; Maas et al. 2014). Empirical work is based on the interviews of the HUB management, representatives of three key customers and their HUB key account managers. The results were analysed and discussed with HUB in order to support customer specific development in the different time frames and to structure a conceptual model for support offering development.
Utilizing service platform for resource integration and relationship trajectories
In addition to customer specific needs our empirical results showed that two main value expectations characterized logistics services:
- operational adaptability, flexibility and cost effectiveness
- deep customer understanding, proactive development-orientation, and innovation capability
Long term customer collaboration manifested as mutual trust, integrative practices, continuous learning and open communication in all collaboration levels.
As the main result the conceptual frame for communicating value proposition with the platform of various resources and competences (service offering) was developed (cf. Lusch & Nambisan 2014). The main idea of the service platform is built on four service levels describing HUB value propositions (Standard, Plus, Premium and Premium+) including four types of customer collaboration: Service producer, Customer support, Performance partner, Development partner. Thus the platform is based on the transformation in value creation logic from G-D logic towards S-D logic (Vargo & Lusch 2008). Changes in service exchange are reflected in customer collaboration as a continuum where in one extreme a value proposition focuses on operative efficiency with more limited scope in customers' business and the role of Service producer. Another extreme can be defined as a solution-oriented value proposition aiming at innovative Development partnering along the value chain. Thus those four service roles or relationship types can be interpreted as a trajectory of specific provider-customer relation (cf. Lappalainen et al. 2014). Naturally, the role of Development partner cannot be the final aim in all customer relations.
Concerning chosen customers, the HUB management has gained deeper understanding of the development needs, future prospects and collaboration potential in short and long term. New conceptual frames support strategic and operative reflection, communication and decision making internally and with customers – and seemed to provide application possibilities in different industrial contexts too. In terms of scientific implication, our study provides the still needed empirical evidence and operative concepts in the debate on S-D logic in relationship-specific levels, which has been acknowledged also in logistics services (e.g. Maas et al. 2014).
Lappalainen, I., Nuutinen, M., Valjakka T. & Ahonen, T. (2014). Situated provider-customer interaction as an arena for continuous service innovation. 15 th CINet Conference, Budapest, September.
Lusch, R.F. and Nambisan, S. Service Innovation: A service-dominant logic perspective, MIS Quarterly, Vol. X, No. X/Forthcoming 2014–2015.
Maas, S., Herb, S. & Haartmann, E. (2014). Supply chain services from a service-dominant perspective: a content analysis. International Journal of Physical Distribution & Logistics Management Vol. 44 No. 1/2, 2014, pp. 58-79.
Vargo, S. & Lusch, R. (2008), Service-dominant logic: continue the evolution, Journal of the Academy of Marketing Science 36(1), pp. 1–10.