Potential of AI for service performance of manufacturers: Analytical and empirical insights

In the era of the digital economy, the rapid development and integration of next-generation information technologies, particularly Artificial Intelligence (AI), have fundamentally altered the operational paradigms and business models of the manufacturing sector. The incorporation of AI elements not only technically but also strategically affects various facets of manufacturing, with relevance to service performance. This study analyzed the effect of AI technology on service quality and manufacturers' strategic decision-making using a mathematical model. Our results indicate that manufacturers should focus on the quality-cost coefficient of services and the impact of AI technology on services, regardless of whether they adopt AI. Importantly, manufacturers should focus on the product value, considering services as value-added components. Subsequently, manufacturers should avoid excessively improving service quality as this could make it difficult to profit from over qualified services. Finally, manufacturers lack incentives to provide low-quality services when determining the sales model for products and services. Manufacturers can maximize profits by continually striving to improve service quality. We studied successful AI-driven upgrades and proposed practical transformation modes as references. This study provides an important reference for guiding AI-driven service innovation practices in manufacturers.