Servitization model for chemical industry in Thailand

Abstract

Chemical industry traditionally produces and sells tangible goods in large volume and high price cometition. Recently, firms in chemical industry provide additional services to their customers. Several manufacturers change from tangible product suppliers to both product and service providers. This movement is called servitization (Vandermerwe & Rada, 1988). Chemical servitization levels can be classified into 4 categories which are product only, service added to the product, service differential the product and service is the product (Thoben, Eschenbacher, & Jagdev, 2001). The objectives of this paper are to construct servitization framework for chemical suppliers to shift to product service integration and to examine factors affecting chemical service levels to provide guidance to chemical suppliers to implement product service system (Kortman, Theodori, Ewijk, Verspeek, & Uitzinger, 2006). The first part of the framework is to develop servitization levels for chemical industry in Thailand. The second part is to define servitization levels for suppliers to offer to their customers. Questionnaire surveys were distributed to chemical dealers, sub-dealers, and end-users, and the sample size was 200. To accomplish the research objective, descriptive statistics, Multiple Regression Analysis, Multinomial Logit Model (MNL), and One Way ANOVA were used in this research. The finding includes seven significant factors which were identified in order to analyze the service level of customer needs. Implications and suggestions for suppliers who want to change their business model to providing chemical solution should offer chemical blending, chemical storage, chemical documentation, and environmental and safety program as bundle services with chemical products.