The term 'servitisation' has been steadily gathering more attention over the past couple of years. It is the descriptor used when talking about how businesses are changing their business model to achieve and provide the ultimate holistic service to their customers and ultimately an improved and more diversified income stream.
The word itself can often be met with confusion and scepticism but the practice of servitisation couldn’t be more relevant in an progressively competitive global marketplace.
Looking specifically at the manufacturing sector, increasingly we are finding that businesses recognise the desire of their customers to be provided with all the tools they need to be competitive rather than going through the process of a single transaction and waving goodbye.
Most manufacturers will understand product lifecycle management, and of course, the product being sold to a customer remains integral to the offering that a manufacturer provides. But understanding the service lifecycle management is now critical to being able to provide a truly value added proposition.
As a manufacturer, ask yourself - what happens to the product you sell, where does it go, what is it used for and how is it looked after?
Servitisation not only allows manufacturers to win work but it allows them to cultivate profitable, long-term relationships based on innovation and diversification. Examples of services manufacturers are offering include design and installation, consultancy and project management, stock and inventory management, condition monitoring and predictive maintenance, repairs and maintenance amongst others.
The benefits of servitisation, including increased customer retention, reduced operational risk and improved commercial resilience are evident, but there are a number of factors to consider.
- Do you know what you customers need? What does your ‘holistic’ service look like?
- What will the impact on your structures and processes look like?
- Are there technology implications?
- Do you have the right staff, skills and services required to fulfil the ‘servitisation’ model?
Servitisation may not be the answer for all manufacturers and represents both a challenge and an opportunity. However in any event, it shouldn’t be ignored and can help manufacturers transform their business model with extremely desirable outcomes.
As with most business changes, having expert advice will make the journey easier for you, so get in touch with Paul Underwood or RSM to discuss your first step .
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