Service Dominant Logic for Irrigation Service
Hajime Tanji and Hirohide KiriNational Institute for Rural Engineering, NARO, Japan
Toshiaki IidaThe University of Tokyo
ICID Asian Conference in Adelaide, June 2012
In developed countries, industrial structure is moved to service industry. Production of service is more important than production of goods.(Innovate America(2005))
What is service science?
What is service science?How to provide good service is key issue of many
industries. In many products, price of goods or quality of
goods are not main reason of high sales. The main reason of high sales may depends on quality of service.
Service science seeks conditions of client requested service.
Drinking water systemService providerWater company
Service clientInhabitants
Supply water as good
Receive water fee on water volume
Facilities are funded, constructed, owned and managed by a water company
Irrigation water system?Service providerWater company
Service clientsFarmers
Supply water as good
Receive water fee on water volume or area
Facilities are funded, constructed, owned and managed by a water company
Irrigation water system?Service providerWater company
Service clientsFarmers
Supply water as good
Receive water fee on water volume or area
Facilities are funded, constructed, owned and managed by a water company
What is irrigation service?Irrigation benefit, not only water volume but
also utilization value.Water (as good) is only one component of
irrigation service. Good irrigation service should increasing
benefit of irrigation.Irrigation service should replay to any request
by farmers.Irrigation service should produce new benefit.Renaut et.al. (2007) says irrigation service is a
major problem second to modernization problem.
What is the purpose of service science of irrigation?Improving quality of irrigation service.
Improving yields of crops.Improving quality of crops.Improving working time and quality of water
management.Decreasing fertilizer input. Decreasing the risk of
On demand service of irrigation.Avoiding or minimize draught risk.Connecting the value of agricultural products to
consumer.
Vergo’s new paradigm; SDLIn former days, goods and service are
considered opposed terms(GDL: Good Dominant Logic). Many researchers suggested this scheme is not adequate.
Vergo (2004,2010) proposed new paradigm (SDL: Service Dominant Logic)in which good and service are connected and providers and clients are working together to create value.
The authors applied to used two paradigm (GDL and SDL) to express irrigation service.
SDL for irrigation
Service providerWater company
Service clientsFarmersSupply irrigation service
Co-value creation
Water fee is only a part of service cost.
Facilities are funded, constructed, owned and managed by a water company
Connecting points (or boder) of providers and clients
Tertiary canals and inside field.
Main and secondary canals.
Scheme Aichi North Yoshinogawa Inbanuma Mae Rao
Country Japan Japan Japan Thailand
Main canal Japan Water Agency Water user association Japan Water Agency Royal Irrigation DepartmentBorder Border
Secondary canal Water user association Farmers None FarmersBorder Border
Tertiary canal Farmers Farmers Farmers Farmers
Border location Secondary to tertiary Main to secondary Main to tertially Main to secondary
SDL application to four irrigation schemesEach scheme has border or connecting point.
Table 1 G- D logic vs. S- D logic on value creation
Oroginal partsOroginal parts Oroginal parts Added parts Added parts
G-D logic S-D logic GDL for irrigation SDL for Irrigation
Valuedriver
Value-in-exchangeValue-in-use or value-in-context
Value in water supply Value in water use
Creator ofvalue
Firm, often with inputfrom firms in a supplychain
Firm, network partners,and customers
Supplier, often withinput from suppliers inthe irrigation scheme
Supplier, networkpartners (water managerin farmers) and farmers
Process ofvaluecreation
Firms embed value in‘‘goods’’ or‘‘services’’,value is ‘added’ byenhancing or increasingattributes
Firms propose valuethrough marketofferings, customerscontinue value-creationprocess through use
Supplier embed valuein water, values isadded by flexibility ofintake
Supplier proposes valuesthrough irrigation waterdistribution to secondarycanals, farmers continuevalue-creation processthrough irrigation waterdistribution and water useat plots
Purpose ofvalue
Increase wealth for thefirm
Increase adaptability,survivability, and systemwell-being throughservice (appliedknowledge and skills) ofothers
Increase wealth forwater supplier
Increase water useadaptability, survivability,and system well-beingthrough water distributionby farmers
Measurement ofvalue
The amount of nominalvalue, price received inexchange
The adaptability andsurvivability of thebeneficiary system
Full cost recovery ofwater supply and theamount of nominalvalue, price received inexchange
The adaptability andsurvivability of waterdistribution system
Resourcesused
Primarily operandresources
Primarily operantresources, sometimestransferred byembedding them inoperand resources-goods
Water as primaryoperand resources
Water as primary operandresources, sometimestransferred by embeddingthem in operation ofdistribution system asoperand resources-goods
Role offirm
Produce and distributevalue
Propose and co-createvalue, provide service
Produce and distributewater
Propose and co-create useof water as value, providewater distribution service
Role ofgoods
Units of output, operandresources that areembedded with value
Vehicle for operantresources, enablesaccess to benefits of firmcompetences
Units of water, deliveryresources that areembedded with value
Canal operation asvehicles for operandresources of water,enables access to benefitof supplier waterdistribution
Role ofcustomers
To ‘use up’ or ‘destroy’value created by the firm
Co-create value throughthe integration of firmprovided resources withother private and publicresources
To ‘use up’ value ofwater created bysupplier
Co-create value ofirrigation water throughrecycle use of waterresources with otherprivate and publicoperators of facilities
G-D logic S-D logic GDL for irrigation SDL for Irrigation
Valuedriver
Value-in-exchangeValue-in-use or value-in-context
Value in water supply Value in water use
Creator ofvalue
Firm, often with inputfrom firms in a supplychain
Firm, network partners,and customers
Supplier, often withinput from suppliers inthe irrigation scheme
Supplier, networkpartners (water managerin farmers) and farmers
Process ofvaluecreation
Firms embed value in‘‘goods’’ or‘‘services’’,value is ‘added’ byenhancing or increasingattributes
Firms propose valuethrough marketofferings, customerscontinue value-creationprocess through use
Supplier embed valuein water, values isadded by flexibility ofintake
Supplier proposes valuesthrough irrigation waterdistribution to secondarycanals, farmers continuevalue-creation processthrough irrigation waterdistribution and water useat plots
Purpose ofvalue
Increase wealth for thefirm
Increase adaptability,survivability, and systemwell-being throughservice (appliedknowledge and skills) ofothers
Increase wealth forwater supplier
Increase water useadaptability, survivability,and system well-beingthrough water distributionby farmers
Vergo’s original paper Aothors’ application
G-D logic VS. S-D logic regarding value creation for irrigation service
G-D logic S-D logic GDL for irrigation SDL for Irrigation
Measurement ofvalue
The amount of nominalvalue, price received inexchange
The adaptability andsurvivability of thebeneficiary system
Full cost recovery ofwater supply and theamount of nominalvalue, price received inexchange
The adaptability andsurvivability of waterdistribution system
Resourcesused
Primarily operandresources
Primarily operantresources, sometimestransferred byembedding them inoperand resources-goods
Water as primaryoperand resources
Water as primary operandresources, sometimestransferred by embeddingthem in operation ofdistribution system asoperand resources-goods
Role offirm
Produce and distributevalue
Propose and co-createvalue, provide service
Produce and distributewater
Propose and co-create useof water as value, providewater distribution service
Role ofgoods
Units of output, operandresources that areembedded with value
Vehicle for operantresources, enablesaccess to benefits of firmcompetences
Units of water, deliveryresources that areembedded with value
Canal operation asvehicles for operandresources of water,enables access to benefitof supplier waterdistribution
Role ofcustomers
To ‘use up’ or ‘destroy’value created by the firm
Co-create value throughthe integration of firmprovided resources withother private and publicresources
To ‘use up’ value ofwater created bysupplier
Co-create value ofirrigation water throughrecycle use of waterresources with otherprivate and publicoperators of facilities
Case studyAichi irrigation scheme
Aichi irrigation scheme Kiso River
Nagoya City
Mikawa bay
Ise bay
Tomei ExpresswayTokaido Main
LineTokaido Shinkansen
Irrigated areaPaddy and Upland crops15,000 ha, Main canal 100 km
Main cropsRice, Onion, Butterbur, Orange, Fig, Tropical orchid, Carnation etc.
Irrigated area
Main canal
Aichi irrigation schemeConstructed in 1961. After 2000, Aichi irrigation
scheme was renewal. Conveyance efficiency of main canals are 100%. In near future, total intake volume may decrease
10 -20%, which should accomplished by improving efficiency at tertiary canal levels. Water in tertiary canals are managed by farmers groups.
How to improve water management by farmers group is an important issue.
Is there any good rule of water management or water fee system ?
Aichi irrigation scheme
Main canal Central control office
Farm pond Inside field part
Who pays fee for irrigation service?Co-creation value of irrigation.
Payment based on area sizePayment based on area size or water volume=alternative?
Survice Supplier Paymant for service by farmersOwner Water manager Farmers Water Farmers Remarks
Investment Fee Works
Main canal GovernmentWater ResourceAgency
Y Y NMultiporposeuse part
Main canal Government WUA Y Y NAgricuture onlyuse part
Secondary canal Government WUA Y Y NFarm ponds Farmers group Farmer group Y N YTertiary canal Farmers group Farmer group Y N YInside field part Farmer Farmer Y N Y
Constraint of water fee systemHarmonize to “Farmers Investment” and
“Farmers Works” for water management. That is, initial investment and farmers works based on area should be considered.
All farmers can pay water fee by income from crops. This means even highest water consumption can be allowed.
Improving irrigation efficiency can be strongly promoted.
Total income by water fee should be keep for maintaining WUA.
How to improve service quality?-Proposal of new water fee system-Water fee is firstly based on irrigated area.To promote improving irrigation efficiency, if farmers save
some volume of irrigation water, he or she can get some cash back of water fee depends on saved volume. Drought function ?
For high consumption area, some countermeasure to reduce irrigation consumption, such as decreasing infiltration by topsoil brought from another place to mix with the soil, should be applied by cost of WUA.
Unit water fee ratio should be adjusted to keep total income to WUA. Water Fee
Water feepar area
Cash backpervolume
Total fee
ConclusionIrrigation service can be expressed by Vergo’s SDL.Water fee is only a part of irrigation service cost.New allowable irrigation fee system can be proposed based on
SDL.
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Renaut, D., Falcon, T, and Wahaji,R. (2007) Modernizing irrigation management – the MASSCOTE approach. FAO Irrigation and drainage paper No.63
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