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Identification of the factors that influence service innovation in manufacturing

enterprises by using the fuzzy DEMATEL method

Guangfei Changli Feng, Ruize Ma

PII: S0959-6526(20)30049-4
DOI: https://doi.org/10.1016/j.jclepro.2020.120002
Reference: JCLP 120002

To appear in: Journal of Cleaner Production

Received Date: 29 December 2019

Accepted Date: 03 January 2020

Please cite this article as: Guangfei Changli Feng, Ruize Ma, Identification of the factors that
influence service innovation in manufacturing enterprises by using the fuzzy DEMATEL method,
Journal of Cleaner Production (2020), https://doi.org/10.1016/j.jclepro.2020.120002

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Identification of the factors that influence service innovation in

manufacturing enterprises by using the fuzzy DEMATEL method Guangfei
Changli Fenga*, Ruize Maa
a School of Economics and Management, Dalian University of Technology, Dalian,

China
* knowledge307@126.com

Abstract
With the rise of the service economy, many companies are attempting to gain a competitive
advantage through service innovation. However, the existing research on the factors
influencing service innovation appears to be scattered, lacking comprehensive and
systematic understanding, and failing to find any causal relationship between factors and the
importance of each factor. Hence, this paper will systematically identify and analyze the
factors that influence service innovation based on a service ecosystems perspective in
manufacturing enterprises. This paper uses a set of factors that influence service innovation
through an analysis of the existing service innovation literature, and uses the Decision
Making Trial and Evaluation Laboratory method to more accurately quantify the causal
relationship of each factor and to identify the key influencing factors. The results show that
customer participation, frontline employee participation, information technology capability,
knowledge sharing, senior management support, and market turmoil are the key influencing
factors. This study explores the key factors influencing service innovation in manufacturing
enterprises, and discriminates the causal relationship between various factors. This study
contributes to the literature on service innovation, provides future research directions and
helps managers to more easily achieve service innovation.

Key words: service innovation; fuzzy DEMATEL; influential factors; service

ecosystems

Declarations of interest: none

Corresponding author: Changli Feng, School of Economics and Management, Dalian

University of Technology, No. 2 Linggong Road, Ganjingzi District, Dalian City,
Liaoning Province, P.R.C., 116024.
Tel: +86-0411-84706760 E-mail: knowledge307@126.com (Changli Feng)
Email addresses: rzma@mail.dlut.edu.cn (Ruize Ma)
1
 Journal Pre-proof

Identification of the factors that influence service innovation in manufacturing

enterprises by using the fuzzy DEMATEL method

Abstract

With the rise of the service economy, many companies are attempting to gain a competitive
advantage through service innovation. However, the existing research on the factors influencing
service innovation appears to be scattered, lacking comprehensive and systematic understanding,
and failing to find any causal relationship between factors and the importance of each factor. Hence,
this paper will systematically identify and analyze the factors that influence service innovation based
on a service ecosystems perspective in manufacturing enterprises. This paper uses a set of factors
that influence service innovation through an analysis of the existing service innovation literature,
and uses the Decision Making Trial and Evaluation Laboratory method to more accurately quantify
the causal relationship of each factor and to identify the key influencing factors. The results show
that customer participation, frontline employee participation, information technology capability,
knowledge sharing, senior management support, and market turmoil are the key influencing factors.
This study explores the key factors influencing service innovation in manufacturing enterprises, and
discriminates the causal relationship between various factors. This study contributes to the literature
on service innovation, provides future research directions and helps managers to more easily achieve
service innovation.

Keywords – service innovation; fuzzy DEMATEL; influential factors; service ecosystems

1. Introduction

In recent years, the market environment has become increasingly fierce, and labor costs have
risen. It is imperative for China's manufacturing enterprises to transform and to upgrade. To this end,
the State Council clearly stated in the ‘Made in China 2025’ plan that the country aims, "To promote
the transformation of production-oriented manufacturing to service-oriented manufacturing"(Fei
and Qi 2018). In the process of transforming services in traditional manufacturing enterprises,
service innovation is playing a key role (Kastalli and Looy 2013). Service innovation in
manufacturing enterprises is a nonlinear, gradual, and complex process that is influenced by many
factors. Therefore, it is very important to identify the influencing factors in this process.
At present, scholars have mainly explored these influencing factors from two dimensions: the
actor, and the environment. Based on the perspective of the actor, scholars have paid more attention
to the influence of customers, employees, suppliers, and other participating entities on service
innovation (Chen et al. 2018; Engen and Magnusson 2018; Hollebeek et al. 2018; Mu et al. 2018).
Konu (2015) concluded that customers, as the ultimate service target of the enterprise, can often
propose new ideas that may have more market value, and customer participation is conducive to
improving the success rate of service innovation. Other research has shown that employees who
participate in service innovation can better understand customer needs and have less uncertainty,
and thus can better design and develop new services (Santos-Vijande et al. 2016). Based on the
perspective of the environment, scholars have focussed on exploring the impact of internal and
external resources and their capabilities on service innovation (Hsu and Wang 2012; Lin and Chen
2017; Doloreux et al. 2018; Mennens et al. 2018). Furthermore, Breidbach and Maglio (2015) verified
the impact of information technology on service innovation. In addition, scholars have also
emphasized the important role of network capabilities in service innovation activities (JIAN et al.
2010; Rusanen et al. 2014). Glisson (2015) found that an innovative organizational culture can
quickly advance the process of service innovation in different enterprises.
In summary, although the existing literature contains recent research on the factors influencing
the service innovation of manufacturing enterprises, there are still many shortcomings: (1) Scholars
have proposed some of the influencing factors of service innovation in manufacturing enterprises
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from their different respective perspectives, but the research is scattered and there is no effective
integration of these factors (2) The existing literature has failed to discriminate the causal
relationship between various factors. The influencing factors of service innovation consist of a large
system, where all the factors are interrelated. However, most existing studies regard these
influencing factors as independent, and fail to explore the deep causal relationship between them (3)
The key influencing factors have not been identified. The existing literature uses case studies,
empirical analysis, and other methods to explore the influencing factors, but the key influencing
factors using multi-factor interaction was not extracted. In view of this, and based on both literature
and interview analyses, this paper builds a system of factors that influences the service innovation of
manufacturing enterprises which is based on a service ecosystems perspective (Vargo et al. 2015).
Then, the decision-making laboratory method is used to quantify the causal relationship of each
factor and to identify the key influencing factors.
The aim of this paper is to attempt to effectively identify the influencing factors of service
innovation on manufacturing enterprises. Firstly, this paper establishes a set of factors that
influences service innovation through an analysis of the existing service innovation literature.
Secondly, we further enrich the set of influencing factors through enterprise interviews. Thirdly,
combined with the opinions of enterprise experts, we gradually converge the data to obtain a set of
factors that influence service innovation. Finally, we analyze the research results, and discuss the
managerial implications and contributions of this research to the field.

2. Theoretical background and influencing factors formulation

2.1 Service innovation in manufacturing enterprises

The concept of “service innovation” was first coined by Barras (1986), and since that time,
scholars have conducted a large amount of research on it. The core content of service innovation is to
create new or substantially improved intangible services, which usually appears in the form of new
services or new business models in the market, and directly creates new customer value through the
process of commercialization (Oke 2007). We believe that service innovation in manufacturing
enterprises runs through the entire product lifecycle, and in essence is the transition of companies
from production oriented to service oriented is really related with business model innovation. This
will change alongside changes in service content and interactions between businesses and their
customers (Ayala et al. 2017).
The essence of the business model is generally considered to be a series of transaction activities,
consisting of a large system composed of many elements that is constantly changing (Benbunanfich
2001). For example, Chesbrough and Rosenbloom (2002) found that the business model involves a
series of services provided by enterprises for customers, and activities are carried out to permit the
delivery of these services. It can be seen that the essence of the business model lies in the
construction of a complete product, service and information flow system, including each actor and its
role, potential benefits of each role, and income sources, so as to enable enterprises to transfer the
maximum value to consumers at the appropriate cost. From a collaborative perspective, the
service-oriented business model is based on the comprehensive value demands of customers. Service
integrators are based on business resources (such as material resources and capabilities) and
knowledge resources (such as experience, know-how, intelligence, etc.) and they cooperate with each
other by decomposing customer requests on a step by step basis by service providers in different
service positions. At the same time, the service integrator undertakes the integration and overall
management of various service elements and links.
Amit (2010) found that the service-oriented business model is a system, and the elements of the
system include consumers, services, organizations, the financial situation and resource elements. The
combination of these elements follows how to use resources and capabilities differently on the basis
of an effective understanding of customer value (Vargo and Lusch 2008). According to the theory of
resource-based view, the competitive advantage of enterprises comes from the construction of
heterogeneous resources, which must be valuable, scarce, irreplaceable and irreplaceable (Baum and
Dobbin 2009). Resource integration is the core of the service-oriented business model, resulting in
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the business model achieving enterprise performance by coordinating all participants and
centralizing resources. From the methodological point of view, service systems usually emphasize
system optimization, while a service ecosystem is an effective way of constructing a business model
system, emphasizing the expansion from an enterprise-centered business model to an ecosystem
that involves a market, an economy and a society.

2.2 Influencing factors of service innovation in manufacturing enterprises

A service ecosystem is an important theoretical perspective for the development of a

service-oriented logic, which has become the focus of service-related research in recent years. The
service ecosystems perspective centers as the collaborative creation of value (i.e., value co-creation),
the integration of dynamic resources, and institutions that influence, and are influenced by
interactions between multiple actors (Vargo and Lusch 2011). According to Vargo and Lusch (2015)
service ecosystems are, “relatively self-contained, self-adjusting systems of resource-integrating
actors connected by shared institutional logics and mutual value creation through service exchange”.
Because of the complexity of service innovation in manufacturing enterprises, it is necessary to
identify the influencing factors from the perspective of business model innovation by using the
theory of service ecosystem. From the perspective of resources, a resource-based view emphasizes
that enterprises are scarce as well as valuable resources and are the source of lasting competitive
advantage (Baum and Dobbin 2009). However, in a fierce competitive environment, no enterprise
can keep all the resources to themselves. In order to meet the needs of development, enterprises
begin to seek complementary external resources, and their boundaries become blurred. From the
perspective of interaction behavior, there are specific mechanisms and evolutionary relationships
among the factors of a service ecosystem (Vargo and Lusch 2008). Institutions, value propositions,
experience situations, technologies and service exchanges play an interactive role among all levels of
a service ecosystem, thus promoting the symbiotic evolution of a service ecosystem that results in
value creation and service innovation.
In summary, from the perspective of a service ecosystem, this paper will study and discuss the
influencing factors of service transformation of manufacturing enterprises. The collection and
screening of influencing factors should be based on four categories: innovation actor, collaboration,
internal and external resources of enterprises. Through the collection and analysis of the relevant
literature, as well as including interviews from enterprise and academic experts, the influencing
factors that relate to service innovation in manufacturing enterprises are obtained, as seen in Figure
1.
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Customer participation
Actor
factors
of Supplier participation
service
innovation
Frontline employee participation

Coordination capability
Collaboration
factors
of Knowledge sharing
service
innovation Customer orientation

Strategic consistency
Influencing
factors Entrepreneurship
of IT capability
service
innovation Internal Network capabilities
in Resource
manufacturing Organizational learning
factors
enterprises of Absorptive capacity
Service
innovation Organizational legitimacy
Senior management
Innovative organizational culture
Human capital investment
External
Resource
Market turmoil
factors
of
Service Technical turmoil
innovation

Fig 1. the influencing factors of service innovation in manufacturing enterprises

Actor factors of service innovation

Customer participation. Customer participation means that customers participate in the service
innovation process of the enterprise in a timely manner, provide information, resources, and make
substantial efforts for the generation and delivery of services (Chen et al. 2016). Customer service
demand is an important driving force for manufacturing enterprises to implement service innovation.
Customer participation in service innovation is conducive to reducing the company’s uncertainty
during the development of new services, helping companies develop service products that meet
customer needs, helping to improve customer satisfaction and corporate service innovation
performance (Storey and Larbig 2018).
Supplier participation. Teece (2007) proposed that the supplier is the driving force for
innovation, while supplier participation will also affect the innovation capability of manufacturing
enterprises. Supplier participation refers to the participation of suppliers during the development of
new services that meet market needs; the suppliers provide specific actions, information, and
knowledge for the enterprise (Moon et al. 2018). When implementing service innovation in
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manufacturing enterprises, the full participation of suppliers can help enterprises to understand the
trend of service changes, which is of great significance to the development of new services. In
addition, suppliers can provide technical support and service design suggestions to enterprises, that
helps to improve the competitiveness of the enterprise’s service products.
Frontline employee participation. Frontline employee participation refers to the participation of
frontline employees in the enterprise’s service innovation process; and helps the company to develop
services that meet market needs through employee knowledge and experience (Lusch et al. 2007).
The development of a service requires the active participation of frontline employees who usually
participate in the daily production and sales of products, and can propose specific service
development suggestions according to customer needs that are a great source of enterprise creativity
(Melton and Hartline 2010). In the servitization process, frontline employees who participate in
service innovation can better serve customers and help to improve the service performance of
products.

Collaborative factors of service innovation

Coordination capability. Coordination capability refers to the ability of an enterprise to engage

in cross-border activities (Liu and Huang 2018). Coordination can integrate enterprises and partners
into an interactive and supportive network, and it is an indispensable aspect of collaboration
between organizations. The development of new services by manufacturing companies can
sometimes lead to customer confusion and conflict. Good coordination activities can promote the
formation of consensus, reduce the cognitive distance in new service development, and reduce the
uncertainty in customers (Liu 2017).
Knowledge sharing. Knowledge sharing refers to the exchange of knowledge between
organizational units for current and future interests (Wu 2016). Manufacturing companies that
implement service innovations require an effective cross-border knowledge portfolio, and thus there
is an urgent need to actively engage in knowledge sharing activities. Knowledge sharing activities
between organizations can improve the existing production process and output quality of the
enterprise (Lin and Chen 2017). Furthermore, knowledge sharing activities within the organization
contribute to the improvement of employee abilities, and ultimately improve the service innovation
performance of the enterprise.
Customer orientation. Customer orientation is an organizational culture that promotes the
understanding of the target customer and continues to create value for the customer (Wang et al.
2016). Implementing service innovation often stems from the needs of customers. Companies with
strong customer orientation seek competitive advantage by prioritizing the creation and
maintenance of customer value so that they can predict changes in demand and develop new
products and services (Cheng and Krumwiede 2012).

Internal resource factors of service innovation

Strategic consistency. Strategic consistency refers to the degree of consistency between the
enterprise's service innovation strategy and the enterprise 's existing business strategy (Lamberg et
al. 2009). When the degree of strategic coherence of the enterprise is high, the manager can guide the
service innovation activities based on past experiences; the enterprise can also use the synergy effect
between similar innovation projects to complete the service innovation more quickly (Lightfoot and
Gebauer 2011). In addition, the new service development strategy will be highly consistent with
existing strategies, which facilitates the rapid entry of new services into the market and enhances the
performance of service innovation.
Entrepreneurship. Entrepreneurship generally includes three parts: opportunity to discover,
opportunity to evaluate, and opportunity to use. It is usually characterized by tolerance to
uncertainty, and the ability to develop and to explore technological opportunities (Urban and
Verachia 2019). Entrepreneurship is the ability to seize new opportunities. In the practice of
enterprises, companies with high entrepreneurial spirits are more likely to convert the concept of
“satisfying demand” into the concept of “creating demand” (Salunke et al. 2013), and therefore they
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actively explore customer needs that have greatly promoted the development of new services.
Information technology capabilities. IT capability is the ability of enterprises to integrate
information technology resources (Bharadwaj 2000). Hsieh and Chou (2018) verified the important
role of IT capabilities in the process of service innovation by studying the service innovation
activities of small and medium-sized manufacturing enterprises in Taiwan. Plattfaut et al. (2015) also
found that the IT capabilities of manufacturing companies can promote organizational learning and
ultimately improve the performance of enterprise R & D. Therefore, the IT capabilities of
manufacturing companies have a positive effect on service innovation.
Network capabilities. Network capability is the dynamic ability of enterprises to identify
network values and opportunities. A company can utilize network relationships at all its levels to
obtain scarce resources (Najafi-Tavani et al. 2018). Implementing service innovation in
manufacturing companies means that enterprises will shift from product manufacturers to service
providers. Enterprises need to integrate resources from customers, suppliers, and other stakeholders.
Good network capabilities can promote relationships between enterprises and external stakeholders.
Such relationships are conducive to the development of new products and services, thus ensuring the
smooth implementation of service innovation activities.
Organizational learning. Organizational learning is a purposeful learning process for companies
to promote long-term effectiveness and survival (Zhang et al. 2017). With the development of service
innovation activities in manufacturing enterprises, physical production materials are gradually
replaced by service-oriented production materials. Through organizational learning, enterprises can
obtain cutting-edge market information, knowledge, and other service-oriented production materials,
and provide appropriate information based on this. In addition, enterprises can enhance their
strategic flexibility through organizational learning (Cheng and Krumwiede 2017), and can quickly
respond to changes in the market environment to ensure successful implementation of service
innovation.
Absorptive capacity. Absorptive capacity refers to the ability of enterprises to dynamically
acquire, transform, and apply external knowledge and skills (Zahra and George 2002). The
servitization of manufacturing enterprises indicates that enterprises will enter new fields. Successful
implementation of service innovation depends on the acquisition and absorption of external
knowledge by these enterprises. Furthermore, absorptive capacity is the key to acquiring and
applying knowledge (Chen 2004). In addition, good absorption capacity can promote the innovation
of service processes of enterprises, and promote the development of service innovation activities.
Organizational legitimacy. Organizational legitimacy means that the organization's behavior is
desirable and appropriate in the normative, value, and belief systems of social construction. It
reflects the consistency between organizational business activities and social values and norms (Guo
et al. 2018). The implementation of service innovation by manufacturing enterprises means that
enterprises will enter a new competitive market, and that highly legitimate enterprises are more
easily accepted by the public when launching serviced products, which is conducive to the marketing
of new products and services. In addition, compared to service companies, manufacturing companies
often need a large amount of heterogeneous resources to invest in services, which are usually owned
by external stakeholders. Higher organizational legitimacy can help companies gain the key
resources that they need.
Senior management support. Senior management support includes manager commitment,
empowerment, and leadership demonstration (Kuester et al. 2013). Manufacturing companies that
implement service innovation often require companies to provide their own additional resources to
implement new services. Therefore, decisions about service innovation require the recognition and
support of senior management (Schuhmacher and Kuester 2012). As the leader of the enterprise, the
senior leader’s attitude determines the innovation environment of the enterprise, and the innovation
atmosphere of the enterprise plays a vital role in the development of new services.
Innovative organizational culture. Organizational culture refers to a relatively stable and lasting
value system shared by all members of the organization (Verdu-Jover et al. 2017). The
implementation of service innovation in manufacturing enterprises means that enterprises should
carry out subversive innovation activities. The value of innovation in an organizational culture is
conducive to stimulating the innovation consciousness of organizations, and is the basis for
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enterprises to carry out service innovation activities. In addition, enterprises often face huge
rigidities in service innovation activities. An innovative organizational culture is conducive to
promoting the connection and reorganization of knowledge, and ultimately promotes the
development of service innovation activities.
Human capital investment. In the service sector, knowledge itself is a product, and human
capital is the main form of capital; moreover, human capital plays an important role in the
production and delivery of services (Pires et al. 2008). The company's service innovation will
inevitably lead to a series of process changes, such as production and delivery. The development of
new skills of employees are the key to supporting the service process. Therefore, in order to promote
service innovation activities, companies must develop strong human resource practices after
acquiring the knowledge and resources (Santamaría et al. 2012).

External resource factors of service innovation

Market turmoil. Market turmoil refers to the degree of instability in market demand changes,
that mainly includes changes in customer composition and customer preferences (Jaworski and Kohli
1993). High market turmoil means that there are rapid changes in market demand. Companies must
constantly improve their products and services to adapt to the turbulent market environment, which
provides a direct driving force for service innovation. In addition, the diversified needs of customers
provide companies with the ideas that develop new services and contribute to the development of
serviced products (Cooper and Kleinschmidt 1995). For example, in the highly volatile market
environment, ZTE launched services such as the “smart upgrade” and “E-service” to provide a
comprehensive service solution and adapt to the turbulent market environment.
Technical turmoil. Technical turbulence refers to the speed of development of new technologies
(Weiss and Heide 1993). The application of emerging technologies can promote the development of
service products and to ensure the timeliness of service innovation. For example, the application of
information technology enables manufacturers to realize remote diagnosis of products, and
enterprises can timely detect product conditions and provide services to customers. In addition,
rapid technological changes have created uncertainty in competition, prompting manufacturers to
seek breakthroughs outside of their traditional products. For example, under the pressure of
continuously upgrading elevator technology, Otis Elevator Company launched the elevator
maintenance and renovation business, which responded to the change in technological environment
by providing new services that achieved great success. Thus, it can be seen that technological
turbulence provides opportunities and the motivation for service innovation.
In view of these findings, which are based on a deeper understanding of service innovation in
the manufacturing enterprises, this paper has defined the concept and factors of service innovation
in manufacturing enterprises which are based on a service ecosystem perspective, and going to use
the complementary method of Fuzzy Set Theory and Decision Test and Evaluation Laboratory
(DEMATEL) to systematically identify these factors. On the basis of the survey data, the factors of
service innovation in manufacturing enterprises will be quantitatively analyzed , to establish the key
factors that are important to management of the manufacturing enterprises.

3. Research method

3.1 Methodology

Section 2 defines the concept and the influencing factors of service innovation in manufacturing
enterprises, and identifies the ultimate influencing factors by means of a literature review and an
interview analysis. However, among many factors, it is still difficult to judge the importance of each
factor and the causal relationship between them. There is still a lack of quantitative support for an
understanding of the key factors. Next, this paper uses the Fuzzy DEMATEL method to undertake a
structured quantitative analysis of the influencing factors of service innovation in manufacturing
enterprises. In fact, in the second section, the first step of the Fuzzy DEMATEL method was
completed with the aim to identify the problems and factors that influence the system. Therefore,
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this section includes a discussion of how the expert data was collected and the related operations.
This includes bringing together the indicators for the degree of influence, the degree of affected, the
center degree and the degree of cause for each factor, draws the causality map, evaluates the
significant relationship path between each factor according to the set threshold, and finally outlines a
number of conclusions and implications for management through further analysis and discussion.
The DEMATEL method (decision test and experimental evaluation method) is a method of
system factor analysis that is mainly used to solve complex problems with inconspicuous
relationships (Gupta and Barua 2018). The method bases on graph theory and matrix tools, makes
use of the knowledge and experience of experts and groups, establishes a visual structure based on
the causal relationship between various factors(Wu and Lee 2007; Lin and Wu 2008; Jassbi et al.
2011), calculates the center degree and the cause degree of each factor, draws the causal diagram,
determines the category to which factors belong(cause group or result group), and then identifies
key factors that will better solve problems (Kiani Mavi and Standing 2018; Ocampo et al. 2018). In
practice, the key to this approach is to establish a direct correlation matrix between the various
factors based on the expert opinions. Since the actual problems are often complicated, the degree of
influence between the various factors is uncertain, and an understanding of the problems among
individual experts are also different. Therefore, their decisions are usually not computable values but
are described in terms such as “better” “satisfied”, and so on. In order to solve the problem of the
fuzzy evaluation of experts, this paper chooses the triangular fuzzy number method to process the
initial direct influence matrix to improve the accuracy of the DEMATEL method. Obviously, the
triangular fuzzy number form is not suitable for matrix operations; it needs to be defuzzified,
converted to clear values, and a new direct relation matrix must be constructed. By comparing the
existing defuzzification methods, this paper selects the CFCS defuzzification method as proposed by
Opricovic and Tzeng (2003) to obtain clear BNP values. The basic steps to determine the fuzzy
DEMATEL are as follows:
Step 1: According to the research question, determine the influencing factors in the system; set
them as F1, F2, F3,… Fn.
Step 2: Design a semantic evaluation form that divides the degree of influence among various
factors into five levels: no impact “0”, very weak influence “1”, weak influence “2”, strong influence
“3”, and very strong influence “4".
Step 3: Obtain the initial direct impact matrix. Invite experts to evaluate the direct relationship
between the factors based on an understanding of the semantic evaluation table, and to obtain a
direct impact matrix for the order.
Step 4: Convert the semantic expression into the corresponding triangular fuzzy numbers
through the semantic conversion table (Table 1). The triangular fuzzy number can be defined as a
triple, where l is a conservative value, which is the closest to the actual value, and r is the most
optimistic value. The membership function of the triangular fuzzy number is shown as in formula (1).

Table 1: Expert semantic evaluation and the triangular fuzzy numbers

Linguistics assessment Corresponding score Triangular fuzzy numbers

No influence 0 （0,0,0.25）

Very low influence 1 （0,0.25,0.5）

Low influence 2 （0.25,0.5,0.75）

High influence 3 （0.5,0.75,1）

Very high influence 4 （0.75,1,1）

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{
0, 𝑥<𝑙
𝑥―𝑙
𝑚 ― 𝑙,𝑙 ≤ 𝑥 ≤ 𝑚
μ𝑁(𝑥) = 𝑟―𝑥 （1）
𝑟 ― 𝑚,𝑚 ≤ 𝑥 ≤ 𝑟
0, 𝑥>𝑟

Step 5: Use the CSCF method to defuzzify the fuzzy numbers, and determine the weighted
average according to the left and right scores of the membership function to obtain the overall score.
Each population score constitutes a new initial direct impact matrix. The specific steps are as follows.
(1) Normalize the triangular fuzzy numbers:
lkij ― minlkij
xlkij = ∆max
, (2)
min

𝑚𝑘𝑖𝑗 ― min𝑙𝑘𝑖𝑗
x𝑚𝑘𝑖𝑗 = ∆𝑚𝑎𝑥
, (3)
𝑚𝑖𝑛
𝑟𝑖𝑗 ― min𝑙𝑘𝑖𝑗
𝑘

x𝑟𝑘𝑖𝑗 = ∆𝑚𝑎𝑥
, (4)
𝑚𝑖𝑛
∆max k k
min = maxrij ―minlij. （5）
(2) Calculate the ls and rs normalized values:
𝑥𝑚𝑘𝑖𝑗
x𝑙𝑠𝑘𝑖𝑗 = (1 + 𝑥𝑚𝑘 ― 𝑥𝑙𝑘 ), （6）
𝑖𝑗 𝑖𝑗
𝑥𝑟𝑘𝑖𝑗
x𝑟𝑠𝑘𝑖𝑗 = (1 + 𝑥𝑟𝑘 ― 𝑥𝑚𝑘 ). （7）
𝑖𝑗 𝑖𝑗
(3) Calculate the overall standard clear value:
𝑥𝑙𝑠𝑘𝑖𝑗 ∗ (1 ― 𝑥𝑙𝑠𝑘𝑖𝑗) + 𝑥𝑟𝑠𝑘𝑖𝑗 ∗ 𝑥𝑟𝑠𝑘𝑖𝑗
𝑥𝑘𝑖𝑗 = (1 ― 𝑥𝑙𝑘𝑖𝑗 + 𝑥𝑟𝑠𝑘𝑖𝑗)
. （8）
(4) Calculate the clear value of the defuzzification of the expert k:
𝑚𝑖𝑛 .
𝑧𝑘𝑖𝑗 = min𝑙𝑘𝑖𝑗 + 𝑥𝑘𝑖𝑗 ∗ ∆𝑚𝑎𝑥 （9）
(5) Integrate the clear value, that is, comprehensiving evaluation of all experts, and obtain the
quantitative value of the direct influence degree of the index factor i on j:
𝑍1𝑖𝑗 + 𝑍2𝑖𝑗 + … + 𝑍𝑃𝑖𝑗
𝑧𝑖𝑗 = 𝑝 . （10）
(6) The initial direct influence matrix is processed to obtain a standardized direct influence
matrix X = [𝑥𝑖𝑗]𝑛 ∗ 𝑛, and 0 ≤ 𝑥𝑖𝑗 ≤ 1. The calculation is as follows:
X = s ∗ Z, （11）
1
s= 𝑚 ， i, j  1,2,, n . （12）
max ∑𝑗 = 1𝑧𝑖𝑗
1≤𝑖≤𝑛

(7) Calculate the comprehensive impact matrix T = [𝑡𝑖𝑗]𝑛 ∗ 𝑛.The element tij indicates the indirect
influence relationship of factors i and j. The comprehensive impact matrix T reflects the overall
impact relationship between elements. The calculation of the matrix is shown in equation (13).
T = lim (𝑋 + 𝑋2 + 𝑋3 + ⋯𝑋𝑚) = 𝑋 ∗ (𝐼 ― 𝑋) ―1 （13）
𝑚→∞

(8) Calculate the influence degree, affected degree, center degree, and cause degree of each
factor. The influence degree Di indicates the degree of comprehensive influence of various factors on
other factors in the system; the affected degree Rj indicates the degree to which each factor is
affected by other factors in the system; the centrality degree is Di + Rj, and indicates that the
importance of factors in the system. The cause degree is Di - Rj (when Di - Rj is positive, the factor
belongs to the cause group; when Di - Rj is negative, the factor belongs to the effect group). These
degrees are calculated as follows:
𝑛
the influence degree：𝐷𝑖 = ∑𝑗 = 1𝑡𝑖𝑗 （14）
𝑛
the affected degree：𝑅𝑗 = ∑𝑖 = 1𝑡𝑖𝑗 （15）
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the center degree： 𝑃𝑖 = {𝐷𝑖 + 𝑅𝑗│𝑖 = 𝑗} （16）

the cause degree：𝐸𝑖 = {𝐷𝑖 ― 𝑅𝑗│𝑖 = 𝑗} （17）

3.2 Questionnaire design and data collection

This is based on the set of influencing factors identified in our article (see Table 2), and the
implementation steps of the constructed Fuzzy DEMATEL method. The purpose of this paper is to
collect first-hand data from both enterprise experts and scholars in the academic field, so as to
provide support for later analysis. In order to ensure the smooth progress of data collection, this
paper initially uses a matrix filling method to conduct the pre-survey and trial filling. Feedback from
filling in the matrix was that it was not convenient for experts to compare the code and name of each
factor, when filling in the matrix. Therefore, this paper improves the process of completing the
survey by designing a questionnaire similar to Likert scale 5, and to explain the corresponding
concepts and instructions in detail, so that experts can easily and seriously complete the
questionnaire. Questionnaires were collected by e-mail, interviews and surveys, which were
distributed in MBA classes.

Table 2：Factors of service innovation in manufacturing enterprises

Factors Code Supporting literature

Customer participation
Supplier participation
Frontline employee participation
Strategic consistency
Entrepreneurship
IT capabilities
Human capital investment
Storey and Larbig (2018),Carbonell et al. (2009),
F1
Chen et al. (2016), Storey et al. (2016)
F2 Smith and Fischbacher (2005)
Engen and Magnusson (2018), Schaarschmidt (2016),
F3
Karlsson and Skålén (2015), Santos-Vijande et al. (2016)
F4 Lightfoot and Gebauer (2011), Ryu et al. (2015)
Salunke et al. (2013), Wang and Juan (2016),
F5
Ndubisi (2014)
Lehrer et al. (2018), Kleinschmidt et al. (2016),
F6
Breidbach and Maglio (2015)
F7 Santamaría et al. (2012), Rosman et al. (2018)

Knowledge sharing F8 Lee and Hidayat (2018), Wu (2016)

Network capabilities
Organizational learning
Absorptive capacity
Organizational legitimacy
Jian et al. (2010), Rusanen et al. (2014)
F9
Storey et al. (2016)
Liu et al. (2017), Jian et al. (2010),
F10
Kitsios and Kamariotou (2016)
Lee and Hidayat (2018), Mennens et al. (2018),
F11
Storey et al. (2016), Kitsios and Kamariotou (2016)
F12 Storey et al. (2016)

Coordination capability F13 Liu and Huang (2018), (Feng and Sivakumar 2016)
Storey et al. (2016), Kitsios and Kamariotou (2016),
Senior management support F14
Kuester et al. (2013)
Verdu-Jover et al. (2018), Anning-Dorson (2016),
Innovative organizational culture F15
Glisson (2015)
Customer orientation F16 Cheng and Krumwiede (2010), Grawe et al. (2009)

Market turmoil F17 Storey et al. (2016), Kitsios and Kamariotou (2016)

Technical turmoil F18 Kitsios and Kamariotou (2016)

Considering that service innovation is a cross-organizational activity, the answers given by

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employees or employees unfamiliar with the activity may not be reliable. Therefore, the final
objective of this paper is to administer the survey to middle and senior managers who are familiar
with service innovation in manufacturing enterprises, and academic experts whose research interest
is in the field of service innovation in manufacturing enterprises. Enterprise experts were mostly
found in the role of manufacturers in the supply chain. They were mainly middle and senior
managers responsible for market strategy or production and operation businesses, so they had a
profound understanding of service innovation. Experts in academic field who were selected were
mainly scholars who published articles on service innovation of manufacturing enterprises in
authoritative journals. They also had a strong influence on this field. At the same time, these scholars
had participated in the practice of service innovation of manufacturing enterprises or enterprise
consultation, so the sample data had a high reliability value. A total of 31 questionnaires were
distributed in this study, and 20 responses were collected. After screening, the questionnaires with
incomplete information were excluded. The final valid questionnaires that were used totalled 18.
The original data obtained through expert investigation was transformed into triangular fuzzy
transformation, and the final initial direct impact matrix was calculated. Due to space constraints,
this paper has only listed the original data of one of the experts (see Table 3). According to the
conversion relationship between the fuzzy number in Table 1 and the expert's semantic evaluation,
the expert's semantic evaluation is transformed into triangular fuzzy number by programming in
Excel. Then using CFCS method, according to formula 2-10, the direct influence matrix between the
initial influencing factors is finally calculated (as shown in table 4, three decimal numbers are
retained).

Table 3：An example of original data from one of all experts

Factors F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12 F13 F14 F15 F16 F17 F18
F1 0 1 1 1 3 3 3 3 3 3 4 2 1 1 3 1 1 3
F2 2 0 4 3 3 3 3 3 1 1 2 2 2 2 3 1 1 1
F3 3 3 0 1 2 2 2 3 2 3 1 1 3 2 2 2 1 1
F4 2 1 1 0 4 3 3 3 3 3 2 2 1 2 2 2 1 1
F5 1 1 1 1 0 3 3 3 3 3 3 3 3 2 2 2 1 1
F6 1 1 1 3 3 0 3 3 3 3 3 2 3 2 1 1 1 1
F7 1 1 1 1 2 3 0 3 3 2 2 3 2 3 3 3 2 3
F8 1 1 1 1 1 3 3 0 3 2 3 3 3 2 2 1 1 1
F9 1 1 1 4 2 3 3 3 0 2 3 3 3 2 2 2 1 1
F10 2 1 1 4 3 3 3 3 2 0 2 2 3 2 1 1 1 1
F11 3 1 1 3 1 3 3 3 3 1 0 3 2 3 1 1 1 1
F12 1 1 1 3 2 2 3 3 3 3 3 0 2 2 1 1 1 1
F13 1 1 1 3 2 2 2 3 3 3 2 2 0 2 1 1 1 1
F14 4 1 1 3 3 3 3 3 3 2 3 3 3 0 2 2 1 1
F15 4 1 1 2 3 3 3 4 3 2 3 2 1 3 0 2 1 3
F16 1 1 1 1 3 3 3 4 4 2 4 2 2 3 3 0 1 1
F17 1 1 1 1 1 1 1 2 3 1 1 2 0 1 1 1 0 1
F18 1 1 1 1 3 3 3 3 4 3 3 3 1 1 2 2 1 0
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1 3.3 Data calculation

2 The valid data recovered is statistically processed, and the questionnaires processed
3 according to the triangular fuzzy number method and the defuzzification method to obtain a
4 direct influence matrix between factors. This is shown in Table 4.
 Table 4： Initial direct influence matrix after triangular fuzzy conversion

Factor F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12 F13 F14 F15 F16 F17 F18
F1 0.000 0.611 0.709 0.611 0.635 0.782 0.672 0.773 0.598 0.623 0.647 0.660 0.512 0.549 0.549 0.525 0.426 0.660
F2 0.660 0.000 0.647 0.586 0.426 0.537 0.549 0.660 0.500 0.635 0.561 0.537 0.451 0.549 0.611 0.574 0.414 0.549
F3 0.746 0.721 0.000 0.672 0.512 0.684 0.672 0.598 0.500 0.611 0.463 0.537 0.525 0.623 0.660 0.611 0.389 0.574
F4 0.611 0.537 0.549 0.000 0.611 0.696 0.684 0.635 0.611 0.647 0.512 0.402 0.451 0.561 0.500 0.500 0.353 0.414
F5 0.488 0.328 0.328 0.512 0.000 0.746 0.684 0.696 0.635 0.684 0.660 0.611 0.439 0.561 0.463 0.549 0.389 0.451
F6 0.611 0.414 0.402 0.512 0.684 0.000 0.733 0.795 0.672 0.721 0.709 0.696 0.549 0.586 0.414 0.512 0.389 0.488
F7 0.463 0.426 0.488 0.561 0.598 0.647 0.000 0.635 0.611 0.488 0.500 0.500 0.316 0.488 0.561 0.549 0.377 0.389
F8 0.611 0.537 0.426 0.525 0.525 0.709 0.561 0.000 0.672 0.561 0.611 0.672 0.475 0.672 0.598 0.672 0.402 0.439
F9 0.561 0.389 0.451 0.733 0.561 0.635 0.623 0.696 0.000 0.439 0.611 0.500 0.512 0.488 0.598 0.500 0.463 0.475
F10 0.702 0.635 0.623 0.820 0.635 0.702 0.623 0.647 0.611 0.000 0.500 0.451 0.451 0.561 0.402 0.525 0.414 0.426
F11 0.537 0.512 0.451 0.611 0.611 0.709 0.672 0.709 0.660 0.488 0.000 0.574 0.365 0.598 0.537 0.561 0.414 0.426
F12 0.561 0.402 0.402 0.426 0.500 0.635 0.598 0.684 0.525 0.439 0.574 0.000 0.353 0.463 0.475 0.561 0.365 0.463
F13 0.537 0.475 0.475 0.537 0.439 0.488 0.451 0.451 0.500 0.451 0.316 0.365 0.000 0.402 0.500 0.439 0.402 0.463
F14 0.623 0.598 0.611 0.709 0.611 0.770 0.733 0.820 0.690 0.537 0.660 0.635 0.389 0.000 0.512 0.647 0.304 0.365
F15 0.611 0.549 0.574 0.488 0.623 0.684 0.647 0.785 0.635 0.512 0.623 0.635 0.475 0.611 0.000 0.635 0.328 0.500
F16 0.574 0.549 0.537 0.574 0.611 0.660 0.586 0.782 0.623 0.611 0.672 0.525 0.389 0.684 0.623 0.000 0.377 0.439
F17 0.611 0.549 0.463 0.537 0.525 0.611 0.525 0.525 0.561 0.475 0.475 0.488 0.402 0.463 0.525 0.598 0.000 0.647
F18 0.684 0.598 0.611 0.586 0.647 0.672 0.586 0.696 0.660 0.537 0.598 0.512 0.549 0.623 0.623 0.635 0.647 0.000
 Using the data in Table 4 with formulas (11)–(13), the comprehensive impact matrix of the factors affecting the service innovation of manufacturing
enterprises is finally obtained. The results are shown in Table 5.

Table 5：The total influence matrix of each factor

Factor F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12 F13 F14 F15 F16 F17 F18
F1 0.561 0.532 0.613 0.476 0.523 0.546 0.566 0.525 0.559 0.512 0.530 0.517 0.420 0.522 0.497 0.463 0.373 0.436
F2 0.596 0.466 0.591 0.460 0.512 0.527 0.557 0.493 0.535 0.503 0.503 0.476 0.400 0.495 0.472 0.457 0.356 0.419
0.64
F3
0 0.539 0.559 0.472 0.544 0.553 0.589 0.519 0.567 0.533 0.546 0.526 0.430 0.522 0.489 0.467 0.378 0.447
F4 0.609 0.528 0.588 0.420 0.505 0.541 0.555 0.508 0.535 0.510 0.516 0.496 0.410 0.503 0.490 0.474 0.368 0.439
F5 0.597 0.508 0.591 0.438 0.454 0.512 0.553 0.493 0.533 0.502 0.512 0.490 0.400 0.492 0.465 0.434 0.356 0.419
0.67
F6
6 0.580 0.665 0.518 0.572 0.532 0.618 0.552 0.594 0.557 0.572 0.554 0.450 0.551 0.531 0.522 0.404 0.489
F7 0.560 0.484 0.551 0.422 0.480 0.482 0.462 0.467 0.502 0.458 0.471 0.455 0.360 0.459 0.448 0.424 0.336 0.391
0.64
F8
0 0.544 0.618 0.484 0.538 0.551 0.577 0.474 0.564 0.525 0.543 0.512 0.410 0.532 0.507 0.479 0.376 0.443
F9 0.598 0.528 0.582 0.444 0.505 0.520 0.548 0.49 0.477 0.482 0.509 0.482 0.400 0.486 0.478 0.446 0.363 0.422
F10 0.623 0.561 0.616 0.488 0.536 0.557 0.575 0.516 0.558 0.466 0.524 0.501 0.420 0.517 0.484 0.483 0.377 0.439
F11 0.611 0.528 0.600 0.464 0.519 0.528 0.564 0.505 0.547 0.496 0.464 0.498 0.400 0.506 0.482 0.455 0.366 0.426
F12 0.554 0.464 0.540 0.412 0.463 0.481 0.506 0.459 0.486 0.446 0.469 0.401 0.360 0.448 0.433 0.408 0.329 0.390
F13 0.492 0.438 0.486 0.387 0.422 0.444 0.455 0.414 0.446 0.413 0.411 0.401 0.300 0.409 0.402 0.384 0.307 0.361
0.66
F14
4 0.573 0.648 0.504 0.555 0.573 0.608 0.548 0.587 0.536 0.559 0.538 0.430 0.487 0.514 0.501 0.382 0.451
F15 0.638 0.540 0.624 0.487 0.542 0.557 0.585 0.533 0.568 0.519 0.542 0.525 0.420 0.528 0.454 0.485 0.374 0.451
 F16 0.639 0.565 0.634 0.511 0.542 0.579 0.597 0.540 0.566 0.537 0.537 0.525 0.440 0.538 0.522 0.443 0.386 0.465
0.66
F17
8 0.576 0.654 0.516 0.571 0.591 0.609 0.560 0.598 0.548 0.566 0.540 0.450 0.555 0.535 0.513 0.363 0.487
F18 0.572 0.501 0.569 0.45 0.492 0.514 0.529 0.489 0.517 0.476 0.487 0.471 0.390 0.475 0.463 0.439 0.373 0.372
Note: Text in bold indicates a significant relationship path
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1 According to the formulas (14) and (15), the influence degree, affected degree,
2 centrality, and cause degree of each factor are calculated. The numerical values of each index
3 are sorted and listed in Table 6. According to the cause degree of each factor in Table 6, the
4 causal distribution of each factor is visually expressed in the coordinate system. A
5 cause–effect relationship diagram of the factors influencing the service innovation of
6 manufacturing enterprises is presented in Figure 2.

7 Table 6：The influence degree, affected degree, centrality and cause degree for each factor

Antecedent Ri Dj Ri+Dj Ri-Dj Category

F1 Customer participation 9.166（9） 10.940（1） 20.110（1） -1.777（17） Net effect

F2 Supplier participation 8.820（12） 9.456（6） 18.276（7） -0.636（13） Net effect

Frontline employee
F3 9.319（7） 10.730（2） 20.046（2） -1.409（16） Net effect
participation

F4 Strategic consistency 8.989（10） 8.349（14） 17.337（14） 0.640（5） Net cause

F5 Entrepreneurship 8.744（14） 9.275（7） 18.019（12） -0.531（12） Net effect

F6 IT capabilities 9.936（1） 9.588（5） 19.525（3） 0.348（7） Net cause

F7 Human capital investment 8.214（16） 10.060（3） 18.269（8） -1.841（18） Net effect

F8 Knowledge sharing 9.352（6） 9.118（9） 18.470（5） 0.234（8） Net cause

F9 Network capabilities 8.745（13） 9.719（4） 18.462（6） -0.976（15） Net effect

F10 Organizational learning 9.236（8） 9.017（11） 18.253（9） 0.219（9） Net cause

F11 Absorptive capacity 8.957（11） 9.261（8） 18.218（10） -0.304（11） Net effect

F12 Organizational legitimacy 8.047（17） 8.909（12） 16.956（15） -0.861（14） Net effect

F13 Coordination capability 7.372（18） 7.275（17） 14.648（18） 0.097（10） Net cause

F14 Senior management support 9.657（3） 9.025（10） 18.682（4） 0.632（6） Net cause

Innovative organizational
F15 9.380（5） 8.667（13） 18.047（11） 0.714（4） Net cause
culture

F16 Customer orientation 9.562（4） 8.276（15） 17.838（13） 1.286（2） Net cause

F17 Market turmoil 9.900（2） 6.568（18） 16.468（16） 3.332（1） Net cause

F18 Technical turmoil 8.876（15） 7.746（16） 16.322（17） 0.830（3） Net cause

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4
F17
3

F16
1 F18
F4 F15 F14
F6
0 F13 F10 F8
14 15 16 17 18 F5 F11 19 20 21
F2
F12 F9
-1
F3
F7 F1
-2

-3
1

2 Fig 2: Cause–effect relationship diagram

3 By observing Table 5 and Figure 2, the key factors influencing service innovation can be
4 shown. Despite this, the roles of these factors cannot be clearly reflected through the
5 cause–effect relationship diagram; for example, we cannot see the relationship between the
6 key factors. In order to solve this problem, this paper introduces a threshold setting to the
7 comprehensive influence matrix to obtain a more structured analytical result. Threshold
8 setting is a simplified way of solving complex problems. Tzeng et al. (2007) argued that if the
9 threshold is set too low, the relationship between factors is too complex to provide the
10 necessary information for decision-making; if the threshold is too high, then many factors
11 are mistaken as independent factors that have nothing to do with other factors. Therefore,
12 setting a reasonable threshold is critical. In general, thresholds are usually determined by
13 decision-makers or through expert discussion. Of course, different scholars have also
14 proposed their own solutions, such as the maximum mean difference entropy method (Li
15 and Tzeng 2009), the subjective method (Chang et al. 2011), and the calculation of the mean
16 of the comprehensive influence matrix (Shieh et al. 2010). The present paper draws on some
17 of these ideas and sets the threshold at several levels, mainly around the mean ± standard
18 deviation. By analyzing and comparing these changes, the final threshold is set at the mean +
19 2 standard deviations (0.640).
20 According to the key influencing factors captured under the mean + 2 standard
21 deviations threshold, and when combined with the relationship path shown in Table 4, we
22 can draw a relationship path diagram between these key factors. This diagram is shown in
23 Figure 3.
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F8
F17 Knowledge
Market sharing
turmoil

0.647 0.640
0.624

F1
Customer
participation
F3 0.664 F14
Frontline 4 0
0.6 Senior
employee management
participation 0.648
support

0.665 0.676

F6
IT
capabilities

2 Fig3：Relationship paths between the key influencing factors

3 4. Analysis and results

4 We often encounter a complex decision problem where several factors either influence
5 other factors (such factors are placed in the cause group) or are influenced by other factors
6 (these are placed in the effect group). It is not the case that if we improve any one factor the
7 whole system will improve because of the dependence of factors on each other. Thus, it is
8 imperative to find the dependence relationship so that we can identify the factors in the
9 cause group that can be improved upon, in order to improve the factors in the effect group
10 and thus improve the whole system (Zhou et al. 2018). Keeping this in mind, a combination
11 of fuzzy logic and DEMATEL techniques were utilized in this study to ascertain the cause and
12 effect relationship among factors of service innovation. A threshold value of 0.640 was set in
13 order to eliminate relatively insignificant effects. The combination of fuzzy logic and
14 DEMATEL methodologies have made significant contributions for managers to determine
15 the key factors. Based on the values of (Ri + Cj), the factors are prioritized as follows: F1 > F3 >
16 F6 > F14 > F8 > F9> F2 > F7 > F10 > F11 > F15 > F5 > F16 > F4 > F12 > F17 > F18 > F13.
17 According to this ranking, customer involvement (F1) is the most important enabler for
18 service innovation in a manufacturing enterprise. As the boundaries between manufacturing
19 and service industries become blurred, the pain point of customer demand gradually shifts
20 from the product, to product and service. Customers are increasingly pursuing
21 comprehensive and professional services, and manufacturing companies cannot meet
22 customer diversification on their own. The customer actively participates in the process of
23 service innovation, which can reduce the risk, shorten the cycle of service delivery, enhance
24 the novelty and market acceptance of service products, and ultimately guarantee successful
25 implementation of service innovation activities (Carbonell et al. 2009; Lambert 2009).
26 Frontline employee involvement (F3) is the second important enabler for service
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1 innovation in a manufacturing enterprise, and the past literature also supports this finding.
2 Frontline employees play a key role in accumulating customer experience and knowledge,
3 and are important sources of creative value for future service innovation design (Carbonell
4 et al. 2009). Since frontline employees come into direct contact with customers and
5 understand their needs, they can deliver achievable, creative, and customer-centric service
6 innovations.
7 The third important enabler for service innovation implementation is the IT capabilities
8 (F6). Manufacturing companies need to pay close attention to customer needs and develop
9 service products that meet customer needs. The IT capabilities give enterprises good
10 product communication and judgment skills. With good IT capabilities, companies can better
11 understand customer information and proactively serve their customers (Rymaszewska et al.
12 2017). In addition, IT supports all processes at all stages of service innovation because it
13 assists in the exchange of information, the design of the new service, market supervision,
14 introduction of the new service to the market, and distribution of the service to customers.
15 Senior management support (F14) and knowledge sharing (F8) also play crucial roles.
16 Senior management support is required to allocate the necessary resources for internal
17 venture capital and new product development. Service innovation is personalized, and
18 companies often need to work with outside stakeholders to achieve innovation
19 (Schuhmacher and Kuester 2012). Companies must provide additional resources to achieve
20 these service adjustments, and access to these additional resources requires the approval
21 and support of top management. Thus, the support of senior management is an important
22 factor in promoting the development of new services for business enterprises. The essence
23 of service innovation is to transform non-encoded knowledge into encoded knowledge.
24 Furthermore, innovation is a spiraling process in which all employees of the company
25 continue to “accumulate and re-accumulate new knowledge”. The enterprise's knowledge
26 sharing activities promote this accumulation, transfer, and creation of new knowledge, and
27 provide continuous promotion of service innovation.
28 By combining Ri-Dj and Ri, we can see that market turmoil is the most highest affected,
29 and its degree of influence is second only to IT capability. It can be inferred from this that the
30 market environment has an important impact on service innovation in manufacturing
31 enterprises. Manufacturing companies can gain greater insights into market fickle
32 competitive situations, and this drives service innovation. At the same time, judging the
33 environment can also help enterprises to better understand the value of new services, and as
34 a result, service innovation activities can be more effectively launched.
35 Figure 2 shows that customer participation and frontline employee participation are the
36 most direct factors influencing service innovation in manufacturing enterprises. The other
37 factors are applied to these two to further influence the service innovation of enterprises.

38 5. Discussion and managerial implications

39 In recent years, with an increasing proportion of services in national economies, the

40 world economy has gradually achieved a successful transition from a product economy to a
41 service economy. More and more manufacturing enterprises are beginning to attend to the
42 role of services in value creation, seeking new points of economic growth by innovating
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1 service content and changing different service forms. However, how to successfully
2 implement service innovation still haunts most manufacturing companies. Through a
3 literature review and enterprise research, this study summarizes 18 factors that influences
4 the service innovation of manufacturing enterprises, and then uses the fuzzy DEMATEL
5 method to determine the relationship between these factors. The factors that influence
6 service innovation in manufacturing enterprises are usually interdependent and mutually
7 influential. This study helps managers to distinguish these factors from causality and to
8 determine which factors drive other factors. By focusing on the most important influencing
9 factors, managers can easily achieve service innovation.
10 This study has found a number of significant implications for management. Firstly, this
11 is the first study to determine the drivers of service innovation and the causal relationship
12 between them. This causal relationship allows managers to decide which factors are the
13 most influential. According to the results of this study, both customer participation and
14 frontline employee participation are important promoters of service innovation and are the
15 most important creative sources of service innovation. Business managers must actively
16 take measures to attract customers and employees to participate in service innovation. It is
17 noteworthy here that both these enablers, although having a high ranking, fall in the cause
18 group based on the DEMATEL analysis. This means that, managers need to improve the
19 enablers that directly impact on customers and employee participation in order to improve
20 them and hence to implement innovation, attracting customers and employees to participate
21 in service innovation and to promote new service development.
22 Secondly, service innovation involves making adaptations in response to the channel
23 partner’s requests as the circumstances change, information interaction is a key determinant
24 of service innovation in manufacturing enterprises based on the DEMATEL analysis,
25 information exchange connotes timely and accurate sharing of critical information(Sezen
26 and Yilmaz 2007; Iyer 2011). Therefore, to successfully implement service innovation,
27 managers need to work on improving IT capabilities and to attempt to overcome market
28 turmoil. In this way, collection of market information and external knowledge sharing can be
29 more beneficial.
30 Thirdly, according to our results, in order to achieve service innovation in
31 manufacturing enterprises, the key is to share critical knowledge timely and accurately.,
32 manufacturing enterprises need to develop policies and programs to evoke desired forms of
33 knowledge sharing behaviors within the firm network cause the exchange of knowledge is a
34 key ingredient to innovation success(Chiu 2008). When collaborative relationships exist
35 among firms, each partner can potentially receive a greater amount of knowledge. There’s
36 quite a bit of its knowledge-sharing inside business networks in which manufacturing
37 enterprises embed themselves as a means of benefiting from mutual co-operation to achieve
38 service innovation .
39 Finally, senior management support is shown to be a powerful factor of service
40 innovation in manufacturing enterprises. Managers should recognize the significance of
41 service innovation. The impact of service innovation on collaboration is maximized when
42 firms face rapid changes in product and technology. On the other hand, companies need
43 more intensive implementation of advanced decision support tools in more turbulent
44 market environments when implementing service innovation strategy, and need much
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1 improvement in collaborative interactions with downstream partners, it’s all need the
2 support of senior management.
3 This paper also has certain limitations and shortcomings. Because of this we have
4 proposed several studies that are based on improving this research in the future. (1)
5 Although it is reasonable to study service innovation as a whole, it can be seen that the
6 continuity of service innovation makes it a dynamic concept. Therefore, although the
7 identification of influencing factors from a static perspective is comprehensive and
8 systematic, the impact of these factors at different stages of service innovation cannot be
9 determined. Future research should attempt to subdivide the dynamic process of service
10 innovation to observe the different roles of these influencing factors from a dynamic
11 perspective. (2) This paper has only determined basic relationships between the influencing
12 factors. However, these results are limited to a certain extent by the subjectivity of the
13 experts who were interviewed, and its general significance was insufficient. Therefore,
14 future research needs to use structural equation modeling to verify the path between the
15 influencing factors and the creation of service innovation in manufacturing enterprises.
16

17 Acknowledgement

18 This work is supported by the Chinese National Funding of Social Sciences (16BGL080).

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Declaration of interests

☑ The authors declare that they have no known competing financial interests or personal relationships
that could have appeared to influence the work reported in this paper.

☐The authors declare the following financial interests/personal relationships which may be considered
as potential competing interests: