Logistics and Supply Chain Management, 6th Edition

The service dominant logic

Some years ago, academics Stephen Vargo and Robert Lusch1 encapsulated these ideas in a framework termed the ‘service dominant logic’ (SDL). In essence their viewpoint is that there are no products – only services – as the value of a product is determined by the utility it generates for the user. This utility might be termed ‘value-in-use’, which customers seek to maximise through their purchase choices. The SDL concept implies that value is created through the interaction of the supplier and the customer through a process known as co-creation. The idea behind co-creation is that companies wishing to gain a competitive advantage should seek to embed themselves in the customer’s value chain; in other words, they should ...