on providing the complete solution, you will deliver the products with or in a service context.

One example has been HDTV (high-definition television). The companies manufactured fantastic products with superior performance and lowering costs, yet for years, nearly 70 percent of all HDTVs purchased came back to the retailers. They were returned, not because they were defective, but because the consumer could not get the great picture without upgrading the cable or satellite box, the DVD player and other devices.

AW: What does this mean for the manufacturing executive readers of Automation World ?
Morse: This means that their insulated world is changing. While quality and operating efficiency will still be important and manufacturing will continue, there is a larger picture to consider. The back-office functions within companies will become more deeply involved with front-office functions, and the traditional separations will get less distinct over time. They need to really understand the ultimate customer needs and the customer value chain in order to optimize their part of the business so that they can contribute to the customer value.

In the example of the jet engine makers, they have moved from making the engines and selling the engines to customers, to making the engines and managing a global fleet of the engines to ensure that the total economic life of the engine is maximized. In this case, the manufacturing portions of those companies are looking not only at Lean Manufacturing methods, but at how to extend that Lean process to and through complex partner and service networks.

The manufacturing process in a services economy involves more integration with outside suppliers and outside customers than ever before. In the HDTV example that I used, perhaps the makers of the TVs would need to partner and coordinate with the manufacturers of other devices to ensure easier plug compatibility with devices needed by the customer to enjoy the full HD effect. The key for me is the new complexity of the relationships required to deliver value not only to internal stakeholders, but also to outside suppliers and end-user customers. Like all business change, it will require changing people, processes and technology in synergistic ways.

Douglas Morse is the Managing Principal  and founder of the Services Transformation and Innovation Group LLC ( www.servtrans.com). His experience and research has shown that the path to the future of services is through a unique new business model called "The Service Oriented Enterprise." This is also the title of his upcoming book that will reveal the secrets on how to transform, innovate and optimize businesses to deliver exceptional new value to customers.

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