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The Journey to Servitization Part 2

In Part One we talked about the concept of servitization as an integrated product-service offering that creates additional customer value and aims to gain a competitive edge against a globalised commodity products marketplace. Interest in service based models is not new, with articles stretching back into the 90’s.  However we are seeing a tipping point where technology is significantly enabling the ability to deliver advanced services to customers using their products as the platform to do so.

Many manufacturers keen to explore the idea of servitization will need to think hard about the transition of their business model. Leading thinkers are gaining experience and are able to help organisations on their journey, for example Tim Baines Director at Advanced Services Group UK has written a useful book on the topic “Made to Serve”.

A core part of the concept is the question of ownership. Users are increasingly asking “do I really need to own the asset or am I more interested in the result the asset can deliver?”  Manufacturers will look to retain ownership of the asset and will be required to manage the ongoing performance of the asset to deliver the optimum service for continued custom. Therefore they will need tools to deliver this capability and new or retrained staff with skills to execute the service and manage the engagement.

Cambridge Services Alliance produced a useful briefing on technologies that will make a difference. They consulted panels of academic experts and practitioners to identify 85 key technology enablers. Five of the top 10 are already having a big impact in industry:-

IoT & Consumption Monitoring –when manufacturers really understand how their customers use the products they can better tailor a personalised service and co-design value with customers. The use of IoT technologies to enable this monitoring creates a continuous link between the manufacturer and the customer. 

Predictive Analytics – a key enabler of servitization providing decision support analysis. Used to analyse data sets to help predict product failures from data supplied by diagnostic sensors. There is also the potential for self-ordering of spare parts based on this capability.

Mobile Platforms Communication & Data Access another key technology from a number of perspectives, push notifications to customers on product diagnostic alerts, specific collection of information from products wirelessly for analysis, operational product control through portal access, up to the minute reporting capability, data input ability and process management.

Dashboarding – Using KPI’s to dashboard service performance and be able to demonstrate a service level for both the customer and the manufacturer. This can be provisioned using increasingly effective Cloud based business intelligence tools to help show the ROI of the service.  

GPS or Geo-Spatial technologies: Used to track machines/products, people, or components. The concept of tracking intelligent “service robots” is no longer science fiction.

These technologies mean manufacturers will need to re-think their hiring strategies and their supply chain models to engage skilled resources and partners who know how to :-

  1. create great customer experiences across the business touchpoints
  2. design engaging user interfaces both physical and digital
  3. build software applications which are adaptable, scalable and modular to react to change
  4. use data analysis and visualisation tools to gain insights
  5. use a design thinking and agile approach to constantly test, re-evaluate, learn and optimise

Manufacturers are needing to innovate and the new opportunities that digital technologies have created will allow some to gain a significant advantage of the competition.