Digital servitization in manufacturing within the wood processing industry: customer requirements and organizational success factors

This Thesis investigates the concept of Digital Servitization in manufacturing within the wood processing industry, whereby focusing on industry-specific customer requirements and organizational success factors. Within previous scientific literature, Digital Servitization is described as a strategic evolvement of traditional Servitization business models, where digital technologies are integrated to existing Product-Service Systems (Favoretto et al., 2022; Shen et al., 2023). This concept has gained significant relevance in the manufacturing context within the past years, however, existing literature reveals that industry-specific manifestations and requirements have been considered insufficiently yet. Especially the wood processing industry is a quite traditional industry that, regarding digitalization, significantly lags behind other industries. Considering this background, manufacturers within this industry lack knowledge of how to deal with the arising dynamics and how to evolve towards Digital Servitization appropriately (Konovalova & Burtsev, 2023; Ranacher et al., 2023). The goal of this thesis is to generate a profound and practical-oriented understanding of Digital Servitization in manufacturing within the wood processing industry. The thesis therefore is centred around two research questions: The first research question deals with specific B2B customer requirements regarding Digital Servitization within the wood processing industry. The second research question then investigates organizational and contextual factors for manufacturers within the wood processing industry to successfully evolve towards Digital Servitization. The thesis in this context does not aim to elaborate a concrete process for evolving towards Digital Servitization. The focus rather is on identifying industry-specific considerations and factors that facilitate a successful evolvement towards Digital Servitization. From a methodological point of view, this thesis follows an explorative approach that combines Literature Analysis with qualitative Empirical Research. Therefore following the methodology of Tranfield et al. (2003), a Systematic Literature Review is based on a systematic selection of existing Digital Servitization literature. The aim is to generate a knowledge basis for the main part of the thesis, which is the Empirical Research. Within the Literature Analysis, a conceptualization of Digital Servitization is followed by digital service approaches, the performance impact as well as a multilevel perspective that reveals facilitating and contingency factors. The key findings from Literature Analysis then are taken into account for defining the target groups and elaborating interview guidelines for the subsequent Empirical Research. The semi-structured expert interviews therefore are built upon two target groups: Manufacturers as the first target group and B2B customers as the second target group, all of them operating within the wood processing industry. For analysing the interview results, the methodology of Gioia et al. (2012) has been applied to systematically compare and contrast the interview results in order to identify central aspects, consistencies as well as inconsistencies across the target groups. The findings of the Literature Analysis show that Digital Servitization can be understood as a strategic evolvement of traditional Servitization business models. Digital technologies, in this regard, are applied for gathering, processing and utilizing data in order to generate added value for both the manufacturers and the customers (Kohtamäki et al., 2019; Shen et al., 2023; Struwe & Slepniov, 2023; Eriksson & Heikkilä, 2023). While the customers benefit from customized services, optimized maintenance and minimized machine downtimes, the manufacturers themselves aim to improved efficiency of their internal processes, resource allocation and spare part deliveries. They further can generate new revenue streams (Favoretto et al., 2022; Huang et al., 2020; Opazo-Basàez, 2022; Shen et al., 2023). However, existing literature refers to significant challenges in the context of Digital Servitization. Described by the term Servitization Paradox, manufacturers recognize negative performance from both the financial and the organizational point of view. Due to high investments and efforts, they struggle to yield the expected results (Brax et al., 2021; Favoretto et al., 2022; Kohtamäki et al., 2020). The success of Digital Servitization is therefore described to depend on various facilitating and contingency factors from different organizational levels, rather than on certain technologies, digital services or evolvement processes (Chirumalla et al., 2023; Heirati et al., 2025; Dmitrijeva et al., 2020; Shen et al., 2022; Struyf et al., 2021). The findings from Empirical Research are basically in line with the ones from existing literature, however, point towards significant industry-specific considerations. The interview results of both target groups reveal varying perception of attitude, interest and knowledge regarding Digital Servitization. Both the customers and the manufacturers recognize the added value from integrating digital services and are aware of the necessity to go with the trend on the long term. Anyway, the practical implementation is considered especially complex due to the customers’ low degree of digitalization, lacking experience and knowledge of both parties, as well as heterogenous production sites. Even though the manufacturers agree that Digital Servitization may be a competitive advantage within the wood processing industry right now, they are aware that it will rather be a necessity to stay competitive in the near future. However, they reveal that they currently struggle with low customer acceptance. Anyway, the manufacturers’ impression that lacking customer acceptance results from insufficient understanding of the added value shows a significant discrepancy to the customers’ statements that it is rather lacking resources, concerns regarding implementation and unclear estimation of the payback that keeps them from accepting digital service offerings. Another aspect that is repeatedly mentioned within all interviews are concerns regarding data privacy and data security. The customers are afraid of unauthorized data disclosure and hackers gaining access to their system. The integrative discussion of the findings from both Literature Analysis and Empirical Re-search shows that Digital Servitization comes with high strategic and operational potential for both parties. However, the practical implementation is affected by various industry-specific factors and challenges such as a low degree of digitalization, heterogenous production sites, high uncertainty and insufficient customer acceptance. Dynamic capabilities, customer involvement, as well as the organizational structure and industry-specific considerations need to be considered particularly relevant in this context. The findings therefore confirm the relevance of a holistic multi-level approach to successfully evolve towards Digital Servitization. All in all, this thesis significantly contributes to close the identified research gap by systematically investigating specific customer requirements and organizational success factors for evolving towards Digital Servitization within the wood processing industry. The results provide both scientific insights as well as practical orientation for manufacturers that aim to evolve towards Digital Servitization within the traditional and hardly digitalized wood processing industry.