In recent years, European manufacturing companies are gradually applying innovative PSS (Product Service Systems), as strategic opportunity for differentiating from competitors, offering an integrated bundle of products and services, targeted on specific needs of different customers. At the same time, frugal innovation has also surged as a new business concept based upon an intelligent use of resources to fulfill region-dependent customers' needs. Both approaches bring forth rethinking of established business models, which in turn asks for an in-depth analysis of the implications on the company organization and infrastructure, at supply chain and plant levels, urging towards manufacturing networks and reconfigurable assembly lines. This paper presents a formalized framework to support product-service design and the related business model characterization, in the context of frugal innovation. The methodology is applied to three real industrial scenarios respectively in the aeronautics, the domestic appliances and the machinery industry, which are analyzed within the framework of the H2020 European funded project 'ProRegio'.
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