Embracing servitization

Posted on 26 Aug 2015 by The Manufacturer

Leading manufacturing services provider, Columbus, along with sister company, To Increase, explain how companies can stay competitive and innovate by embracing servitization.

Precursors, in every industry, field and sector, are usually called innovators.

Although sometimes, more than creating, what some people really do is steer and shift in a new direction.

Steve Jobs
“People don’t know what they want until you show them,” Steve Jobs.

Steve Jobs said, “People don’t know what they want until you show them,” and this might be true for a supplier-customer focused approach, but not for all.

For today’s manufacturers, innovation needs to be driven by customer needs in order to have business value.

What has been proven over recent years is that the manufacturing sector has been subject to all sorts of trends and changes in implementation of services, production techniques and practices.

Many makers of complex, typically high-cost items also see that they lose out on revenue and competitive opportunities if they limit their customer-focused efforts to the early stages of the product lifecycle, when they design, build, and deliver machinery or other products.

For them as well as their customers, it becomes more effective to extend a productive engagement and product innovation throughout the product lifecycle, and equipment-as-a-service (EaaS) or servitization as a natural next step.

Columbus Servitization PQColumbus, alongside sister company, To Increase, has embodied the change and pioneered the sector for more than 25 years.

“When product ownership remains with the manufacturer, and the customer benefits from machinery or other complex products within an EaaS agreement, it becomes easier for manufacturers and their customers to collaborate on product innovation,” said Bjorn Kuijt, vice president of product management at To Increase.

“Within this framework, customers’ risk is low, because they pay only for the value they receive and the innovation that makes sense for them, and they can avoid investing in assets that will sooner or later become obsolete.

“For the manufacturers, servitization provides a constant stream of additional, incremental revenue, while together with their customers they create new product features that help them to become more competitive,” added Kuijt.

Columbus’ most innovative manufacturing customers have rapidly made inroads in combining the internet of things (IoT), the cloud, and mobility to ensure they understand the performance of their products on customer sites and maintain a high level of responsiveness in their servitization model.

“The industrial manufacturer, is getting demand from their clients and they’re trying to supply that experience, but at the same time they’re trying to figure out a different way of monetizing their products,” said Luciano Cunha, vice president of sales at To Increase.

MSTLN LinkColumbus has been operating various levels of servitization for many years developing among others, a component called ‘asset service management’ that allows industrial manufacturers to provide services to their customers.

According to To Increase, “It’s not a question of ‘should it’ or ‘shouldn’t it be implemented’, the simple fact is, demand is already there.”

As Cunha stated: “Servitization should be embraced by manufacturers. Both the product manufacturers and the industrial manufacturers.

“The very end customers, are demanding better products at a lower cost. The manufacturers need to focus on differentiation and strategic advantage at all costs in order to create and innovate new products to bring to market.”