## 3 Product Service System Case Study  
### Case Study Overview  
Xerox, one of the world's leading printing system manufacturers, has a fleet of industrial printing systems deployed in the field. Industrial printing systems are installed at customer's print shops, where they become part of production systems to produce printing goods, which, in turn, are sold to their customers. Xerox (the company) and the customer typically have a recurring fee based maintenance contracts, in which the company maintains customer's printing system on regular basis, supplies necessary consumable parts required for operation, and performs repairs in case of printing system failure. Usually, as part of the maintenance contract, the company is responsible to have its printing system available for production above a certain agreed threshold during the regular operating hours. Failure by the company to meet the contracted system availability requirement may result in penalty to the company, or even worse, cancellation of the maintenance contract by the customer. In that sense, the industrial printing system can be classified as a PSS for Xerox, and will be referred to as such in subsequent sections. Since unexpected system failures are inevitable, the company supplies customers with a field repair kit, consists of frequently replaced spare parts. Typically, the composition of the spare parts and the quantity of each spare part in the field repair kit are determined by printing system design team, based on historical performance of similar parts in other previously launched products. After the product launch, the composition and quantities of spare parts in the field repair kit are updated as the true life of spare parts become known. However, on many occasions, this result in a sub-optimal field repair kit, where some parts are never used due to less than expected parts failure, while some parts are in constant shortage and demand as they are used more frequently than expected. This mismatch creates an undesirable situation for both the company and customers. Customers experience more unexpected PSS downtimes, above the threshold established by the maintenance contract, due to a shortage of critical spare parts. This will impact a customer's ability to meet their business goals. As for the company, mismatch in field repair kit spare parts type and quantity may result in their failure to meet the availability requirement promised to the customer, jeopardizing their credibility, and sometimes terminating their contract with that particular customer. Another issue concerns the field repair kit inventory itself. In some cases, the company financially owns the field repair kit inventory, tying up corporate capital in the form of spare parts inventory. If some spare parts become obsolete while in a company's possession, the company would incur unnecessary financial loss due to the extra cash that was tied up in the form of unused parts, and the additional cost for management of obsolete parts. The constant shortage of some spare parts can create an extra cost issue in terms of expedited shipment from parts suppliers and to customer's sites. In this case study, a simulation based optimization framework was created and utilized to configure a cost-optimal PSS field repair kit to satisfy the specific availability requirements. One of several industrial printing system produced by the company was used as a specific example. To optimize the PSS field repair kit and to perform further analysis, following steps were followed. First, a high fidelity PSS simulation model was created to simulate the system operation and availability, subject to spare parts failure. Next, using the simulation model, a series of key parameter variation experiments were conducted to yield PSS availability under specific parameter settings. The obtained results were used to construct a regression based PSS availability model that would describe PSS availability as the function of key parameters.