The value of customization on differentiation in service logistics

In the current business environment, the availability of capital goods may be crucial for a company’s operations, with downtime possibly having severe consequences in terms of revenue loss and safety. Often, the users of such equipment outsource system maintenance to a service provider. Outsourced services may vary from specific aspects of system upkeep (spare part provisioning and repair, service engineer deployment) to a full service concept in which the customer pays for system uptime. In so-called service contracts, service level agreements (SLAs) are made on performance indicators such as the minimum fraction of system uptime or the maximum response time in case of failures. Users of the same capital goods may value downtime differently. Therefore, the service provider typically offers service contracts with different SLAs at different prices to its customers. Then, a key challenge for the service provider is to organize its service logistics both efficiently (at low costs) and effectively (ensuring that each customer receives the correct service level). In this dissertation, we consider various logistic control options to determine the quantity and location of the resources needed to meet these objectives. We consider three main research topics: (i) the availability of spare parts when differentiation is applied at an item level, (ii) the availability of spare parts when differentiation is applied at both an item level and a customer level, and (iii) the availability of service engineers when differentiation is applied at a customer level.