Int. J Sup. Chain. Mgt Vol. 2, No. 1, March 2017 1 Servitization in Malaysian Poultry Contract Farming: A Critical Overview Nazim Baluch #1 , Ahmad Shabudin Ariffin #2 , Zakaria Abas #3 , Shahimi Mohtar #4 #1,2,4 School of Technology Management and Logistics, COB, Universiti Utara Malaysia #3 School of Economics, CAS, Universiti Utara Malaysia 06010 Sintok, Kedah, Malaysia nazimbaluch@uum.edu.my ashabudin@uum.edu.my zakaria@uum.edu.my shahimi@uum.edu.my Abstract - The old dichotomy between product and service has been replaced by a service-product continuum. In the management literature this is referred to as the ‘Servitization of Products’. This shift in business model is important because it means the interests of clients and providers are much more closely aligned. Broiler meat is the primary and most popular source of dietary protein in Malaysia. Malaysian Broiler poultry meat production in 2015 was 1,520,000 tons, primarily through contract farming. Though the broiler industry has attained high level of productivity and growth with efficient and innovative ways at their credit; the general, mainstream, servitization concept is highly skewed in industry’s favour, with minimal attention given to the negative health effects on consumers. In fact, the servitization concept has turned into inimical servitization – term contrived by the author. This paper explains the concept of servitization, inimical servitization, and Product Service System (PSS); elaborates on the Malaysian broiler industry production practices; and highlights the health and environmental issues pertaining to broiler meat birds’ welfare and consumers. Finally the paper concludes that the excessive growth speed creates numerous health and environmental problems for the meat birds and consumers alike. There is a dire need to establish guidelines and mechanism to monitor the production process of the broiler industry in order to safeguard the consumers’ and meat birds’ welfare and prevent environmental degradation. Broiler industry should earnestly apply PSS criterion on the broiler supply chain. Keywords - Servitization, Inimical Servitization, Product-Service System, Broiler Poultry Meat 1. Introduction The old dichotomy between product and service has been replaced by a service-product continuum. Products today have a higher service component than in previous decades. Virtually every product today has a service component to it and many products are being transformed into services. In the management literature this is referred to as the ‘Servitization of Products’; it is the trend to create value by adding services to products or even replacement by a service. Selling maintenance contracts for capital goods would be an example of a service being added to a product. Selling tires by the kilometers to haulage companies is a service replacing a product. Productization of Services is the evolution of services to include a product or a new service marketed as a product. For example in the logistics sector, transport contracts have so well defined their service that is effectively sold as a product. This shift in business model is important because it means the interests of clients and providers are much more closely aligned. Product- Service System PSS, an off shoot of servitization, is an integrated product and service offering that delivers value in use. Though the broiler industry has embraced the servitization concept to improve their production and marketing efficiencies, they haven’t paid adequate attention to the consumers’ requirements and meat birds’ welfare. 2. Servitization Baines et al., [1] define servitization as ‘the innovation of an organization’s capabilities and processes to shift from selling products to selling integrated products and services that deliver value in use’. This definition shares basic principles with the work on product-service systems – PSS [2] and is broadly in agreement with how the term was first used by Vandermerwe & Rada [3]; it states as the process of creating value by adding services to products. The literature indicates a growing interest in this topic by academia, business and government [4]; much of which is based on a belief that a move towards servitization is a means to create additional value adding capabilities for traditional manufacturers. These integrated product-service offerings are distinctive, long-lived, and easier to defend from competition based in lower cost