The transition between simply selling products and providing services is a process that in the B2C world is already underway and well established. Think, for example, in the field of entertainment, of the success of subscription-based streaming platforms, or even the long-term rental in the automotive world. In the industrial world in general and in manufacturing in particular, there are still many opportunities open today to implement servitization successfully, particularly thanks in part to digital transformation, which allows better control over production and products and also greater flexibility, for example in the provision of advanced after-sales services.
Servitization is a tool to benefit competitiveness
Companies in the manufacturing sector are constantly confronted with an ecosystem in which low-cost manufacturers are the main critical competition. The ability to provide better and advanced services is already known as an opportunity to improve customer retention. Servitization enables the next step, transforming service delivery from a cost item to a revenue opportunity.
Revenue that can be used to invest in research and development, data collection and management, and generally in creating new opportunities to improve competitiveness in the marketplace by providing new services and improving those provided. To use an overused term, the adoption of servitization triggers a virtuous circle, allowing the company to free itself from the simple logic of cost of the final product, in favor of the quality of the work.
How to implement servitization
In the definition academic servitization, there are three levels that manufacturing companies can offer: basic services, intermediate services and advanced services. In practice on can go from simply providing consumables and spare parts on a periodic contract basis to implementing the product as a service, for example by ensuring its operation.
In this context, the benefits of digital servitization become immediately apparent. By equipping its products with the control and monitoring systems typical of Industry 4.0, for example IIoT sensors, a company can provide a predictive maintenance to customers who are not in a position to implement it themselves, or who prefer to outsource the service.
The advantages of this approach
Competing through services as well as through produced goods enables offers the company many advantages. Among the main ones of the organizational change of servitization include:
- Increased revenues and profits
- Ability to better respond to customer needs
- Improved ability to innovate
- Creation of new revenue opportunities
- Increased loyalty
- Increased competitiveness
Servitization moreover has absolutely illustrious precedents. Rolls-Royce Aerospace for example started the process more than a decade ago by transforming itself from a simple engine manufacturer to a “product-as-a-service” supplier to aerospace companies, with remarkable success.
The importance of data use in digital servitization
We saw just above how data management and analysis tools can be a powerful and effective tool for advanced service delivery in manufacturing. More generally, since this strategy is based on managing customer needs as agilely and responsively as possible, both advanced data analysis tools, for example with the support ofartificial intelligence, and integrated systems of asset management, enabling the products and services provided to be managed globally in a structured and organized manner.
