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New research from The University of Alabama in Huntsville, a part of The University of Alabama System, challenges a long-held assumption in business: that offering services in a solution package strengthens relationships between manufacturers and their customers.

In a study published in Production and Operations Management , UAH Associate Professor of Marketing Dr. Yongchuan (Kevin) Bao and Assistant Professor of Management Science Dr. Yi Tan, together with co-authors in the strategy field, reveal a counterintuitive outcome: Expanded product offerings with services to solve clients' operational problems may actually increase the likelihood of customer default, potentially undermining buyer-supplier relationships.

The research examines the unintended consequences of manufacturers shifting from selling standalone products to delivering integrated "customer solutions." The work draws on a dataset of 2,218 observations from 446 publicly listed manufacturing firms between…