Home' MHD Supply Chain Solutions : MHD July-Aug 2017 Contents range of mobile technologies and devices –
these and other innovations are paving the way
for a totally different take on the role of the
Technologies driving change
So what’s required of manufacturers who want
to servitise their business? Like any other major
innovation in the industry, servitisation means
that enterprises will need to confront change to
be able to grasp the opportunities it presents.
Some of these will be technology-based. A study
from the Cambridge Service Alliance in 2015
found consensus among capital equipment
manufacturers (CEM) on five key technology
requirements to enable servitisation in the future:
1. Predictive analytics to predict specific
2. Remote communications to resolve
3. Consumption monitoring to create customer-
specific service offerings
4. Pushing information to employees/customers
via mobile platforms
5. Mobile platforms to access business software
remotely for maintenance techniques,
product details, etc.
Manufacturers will need to assess the
individual value of these, and other, technologies
for their operations to ensure medium-term
Rethinking the organisation
Servitisation comes with a number of
organisational challenges as well, which may
cause manufacturers to question the process.
Will it be necessary to invest in new equipment?
Do we have the people with the required skill
sets to deliver on our service promises? What
will adding service entail in terms of new
regulations and compliance issues? All are
valid issues, and enterprises will also have to
learn that, to win new customers by adding
service, sales cycles will be longer. Instead of
selling wares, they will be selling value, such as
lower costs or higher revenue, and that often
requires more persuasion. Therefore, among
other things, they will need the right enterprise
software in place to facilitate this change.
However, these are challenges that companies
need to overcome if they are to continue to be
competitive in their markets – indeed for some, it
will be a matter of survival or not.
Servitisation in practice
Manufacturers that are already reaping the
benefits of servitisation include players in a wide
array of sectors.
Dutch technology firm Philips provides one
of the world’s busiest airports, Amsterdam-
Schiphol, with ‘lighting as a service’. Because
efficient LED lamps are highly expensive,
the airport authority opted for a servitisation
package from Philips to provide lighting. In line
with its eco-friendly policies, Schiphol airport
has reduced electricity consumption by 50%
without having to buy a lamp.
Also on the subject of environmental
benefits, servitisation approaches at MAN
Truck and Bus UK have cut customers’ fuel
consumption by at least 10% and reduced
CO2 emissions by up to 15%.
Xerox makes most people think of
photocopying machines and other products.
Yet the American global corporation has
made a significant shift from a product- to
service-centred business model, focusing on
business outsourcing, document and digital
printing, and software solutions. Using these
solutions, enterprises such as Reuters report
a 19% reduction in total cost of ownership,
PricewaterhouseCoopers (PwC) is 100%
compliant with security requirements, and the
UK Department of Work and Pensions has
reduced electricity consumption by 36%.
Beijer Electronics, a Swedish-based producer
of electronics hardware with markets worldwide,
is another case in point. Forecasts showed
that within six years, the automation industry’s
hardware focus will be transformed and sales
growth rate will decline. How, then, was the
company to secure its future?
The survival path Beijer chose was to add
software that helps customers control and
manage their hardware. And that’s where the
company sees future revenue growth and
new business opportunities. One of the tools
Beijer is using is a CRM package from IFS
that is integrated with its business software.
Among other things, it puts accurate customer
information directly into the hands of sales staff,
enabling them to tailor products to different
categories of customers. Beijer is also looking
at mobile CRM as a means to speed up
information flows and access sound business
intelligence in the field. One effect of this is
that Beijer’s customers get through-life service
that enables them, in turn, to resolve their
customers’ problems and create the feeling that
they and Beijer are ‘in this together’, thereby
encouraging greater customer loyalty.
These and other companies that have added
advanced services as a means of increasing
the value of their product range tend to use
some or all of the technologies underlined in
the Cambridge Service Alliance study, including
predictive analytics, remote communications,
mobile platforms, and consumer monitoring.
Servitisation – what’s next?
Companies that have added service to their
product range, adapted their organisations
to enable this and acquired the requisite
technology (often in the form of integrated,
full-scope enterprise software) have confronted
the question of ‘What’s next?’ – and reaped
significant benefits. In fact, adding service
contributes to much of what is the very
essence of good business, that is, actively
looking to the future and seeking to shape it, to
create opportunities rather than merely grasp
those that arise.
Benefits reported include:
• Enhanced revenue – reported growth
between 2x and 4x.
• Better margins – increases of
• Sustainable business growth – increases
of up 5–10% reported.
• Greater customer satisfaction – they are
getting what they want.
• More repeat business, greater market share,
and a better reputation.
• Predictable income streams.
For decades, we have worked with
manufacturers to help them design, make and
sell their products. Now, we are taking the next
step and enabling them to efficiently add service
to their portfolio. Combining a comprehensive
suite of enterprise software that covers ERP,
EAM, Field Service Management and Mobile
Workforce Management with Enterprise
Operational Intelligence and advanced analytics,
it enables manufacturers to actively take part
in the transformation process, giving them the
capabilities and insights to make decisions
based on real-time statuses to not only meet
customer needs but also anticipate them. Being
able to handle today’s business challenges is
important; shaping what’s next is crucial to
growth and continued success.
Antony Bourne is the global industry
director of industrial and high-tech
manufacturing for enterprise software company
IFS, and has over 20 years’ experience in the
IT and manufacturing industries. For more
information visit IFSworld.com.
“Servitisation comes with a number of organisational
challenges as well, which may cause manufacturers
to question the process.”
MHD SUPPLY CHAIN SOLUTIONS — JULY / AUGUST 2017
SUPPLY CHAIN 59
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