Ramp Up and Ramp Down Dynamics in Digital Services

• Date: 01 July 2019
• DOI: http://doi.org/10.1111/jscm.12189
• Published date: 01 July 2019

RAMP UP AND RAMP DOWN DYNAMICS IN DIGITAL

SERVICES

HENK AKKERMANS

Tilburg University

CHRIS VOSS

The University of Warwick

ROELAND VAN OERS

Tilburg University

Volume ramp ups are notoriously difficult in digital services, where mar-

ket pressures can lead to ramping up too soon and too rapidly which in

turn can lead to the need to ramp down. This paper addresses the chal-

lenge of taking innovation to scale in an established firm by enhancing

our understanding of the nature of service ramp ups and ramp downs.

Digital service ramp ups differ substantially from production ramp ups as

the speed is much greater, and problems are visible to customers. How-

ever there are similarities between service ramp downs and product recalls

and an important contribution is exploring the nature of ramp downs

their processes and possible causes. Using an engaged research approach,

longitudinal data from three consecutive ramp ups in a European telecom

operator were collected. Through analyses of cases, qualitative and quanti-

tative case data, and using a system dynamics model, we identified a set

of issues that affect service ramp ups and ramp downs. These include the

need to ramp up the service supply chain, biases leading to unrealistic

assumptions about scalability and problem-solving, decision biases in var-

ious functions, launching digital services in beta form, a lack of trans-

parency of capacity and lack of learning from previous ramp ups. We

show that if these problems are not addressed or resolution is delayed,

this can lead to cycles of delay, backlogs and productivity problems and

the inevitability of a ramp down. We explore reasons and importance for

such delays that lead to service ramp downs.

Keywords: service supply chains; ramp ups; ramp downs; recalls; system dynamics;

clinical methods; engaged research

INTRODUCTION

Nobody has been as fast as we intend to be. (Ramp

up manager)

Markets are pressuring companies to develop new

services quickly and to get them to market as soon as

possible, leading to pressure for rapid deployment

and ramp ups. Such pressure has increased with the

growing digitalization of service sectors such as bank-

ing, insurance, and media (McKinsey & Co., 2015).

Ramp ups of such services usually require a significant

commitment of resources, which may cause problems

if the available resources do not match the demand

growth or if they are diverted from other services and

involve ramping up the whole service supply chain.

Acknowledgments: The authors would like to thank those

associated with ETEL over the period of this research, in

particular Annelore Buijs, Eric Kuisch, and Willem van Oppen,

for their support and invaluable insights.

The copyright line for this article was changed on March 11,

2019 after original online publication.

July 2019

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Journal of Supply Chain Management

2019, 55(3), 3–23

©2019 Wiley Periodicals, Inc.

One of the top five reasons for new product and ser-

vice failures is organizations failing to manage the ramp

up (Schneider & Hall, 2011). Problems during ramp up

can lead to difficulties in meeting time-to-market targets

and may negatively influence service outcomes. For

example, following an SAP rollout by an energy provi-

der in 2011, many of the company’s 5.4 million cus-

tomers experienced issues, such as billing delays as

account details were transferred to the SAP platform. A

resulting backlog of complaints created longer call-wait-

ing times. The UK energy regulator highlighted a seri-

ous deterioration in service levels (Finnegan, 2013),

prompting a public apology from the CEO. A public

sector example is the rollout of the US Affordable Care

Act (Obamacare). In 2013, former Secretary of Health

and Human Services, Kathleen Sebelius, said that the

administration’s original predictions about its timetable

were “flat-out wrong.” She remarked, “Could we have

used more time and testing? You bet” (Alter, 2014).

This created problems for both the potential users and

the government. Negative publicity around repeated

problems with new service and system ramp ups is not

uncommon, with numerous examples of rapid ramp

ups and a pattern of initial rapid rollouts followed by

ramp downs—a slowdown or complete halt.

There is extensive literature on the need for product

and service innovation, such as new service develop-

ment (NSD) and the processes involved (Menor, Tati-

konda & Sampson, 2002). However, this literature is

virtually silent on the challenge of taking innovation

to scale. In this paper, we focus on this challenge in

service firms, specifically in the context of digital ser-

vices. The effectiveness of ramp ups can be an impor-

tant factor in competitiveness. The competitive

advantage gained from knowledge-based assets, such

as new services, depends in part on exploiting them

effectively via rapid and effective ramp up and doing

so consistently better than one’s competitors. Thus, it

is important for managers in service organizations to

understand the issues, key decisions, and trade-offs

associated with ramp ups and how any problems can

be mitigated during the ramp up process. Equally, at a

theoretical level, we need to develop a better under-

standing of the nature of service ramp ups. Research

into digital service supply chains has shown how

unforeseen problems can lead to the phenomenon of

fallout (Akkermans & Vos, 2003). Scalability is an

important aspect of service ramp ups, both the nature

of the service and management assumptions affect it

(Boyer, Hallowell & Roth, 2001; Hallowell, 2001).

The research in this paper set out to explore ramp

ups in the context of digital services. As the research

progressed, we observed problematic ramp ups lead-

ing to ramp downs and extended the scope of the

research to address this. There is a growing body of

ramp up research in manufacturing (Heine, Beaujean

& Schmitt, 2016; Terweisch, Bohn & Chew, 2001)

and the supply chain (Li, Shia, Gregory & Tan, 2014).

We contend that the context of services, in particular

digital services, can differ substantially from products

during ramp ups. We put forward and explore three

areas of difference. First, service ramp ups take place

in the field, and as production and consumption are

simultaneous, they may manifest themselves directly

to the customer in setup or use. Second, in services,

especially digital services, ramp ups can be much stee-

per. Finally, there can be pressures to ramp up the ser-

vice before it is fully developed. In addition to

differences, there are commonalities between product

and service ramp ups, especially in that both require

ramping up the supply chain resources and capacities.

Ramp downs have not been studied, though product

recall, which has similar characteristics, is an area of

increasing concern to supply chain managers and

researchers (Wowak & Boone, 2015). The objective of

this paper is to explore ramp ups and ramp downs in

the context of digital services, which we address

through longitudinal field research in three digital ser-

vices in a medium-sized European telecom company.

This paper contributes to knowledge on the chal-

lenge of taking innovation to scale in an established

firm by enhancing our understanding of the nature of

service ramp ups, ramp downs, and associated issues.

A distinctive contribution of this research is identify-

ing the importance and the nature of the ramp down

stage and associated decisions and issues.

LITERATURE REVIEW

Service and Product Ramp ups

A service ramp up is the process of rapidly increas-

ing the delivery of a service to meet demand. The

terms “deployment,” “launch,” and “rollout” are fre-

quently used to describe the same activities. Existing

knowledge on ramp ups is primarily based on prod-

ucts, “the notion of ramp ups has never been used in

the case of services” (Lenfle & Midler, 2009, p. 158).

There are a range of factors that potentially affect pro-

duct ramp up success, including product complexity

and scope, project management, quality of the manu-

facturing process (Clark & Fujimoto, 1991), learning

prior to and during ramp up (Pisano, 1996), and run-

ning pilot production and full-scale ramp up in paral-

lel (Terweisch et al., 2001). The dynamic context of

ramp ups means that many decisions must be made

quickly. The ability to act is influenced by high levels

of multidisciplinarity, with decision makers from dif-

ferent fields such as production, logistics, or planning.

Their actions may interact, creating interdependencies

(R€

ossler, 2016). This complexity of ramp ups can lead

to a low degree of transparency, complicating the

decision-making process (Brauner et al., 2016).

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Journal of Supply Chain Management

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