Eight out of 10 manufacturers believe using technologies to servitize their company will help broaden their customer base. But, if your business has never offered a service-based approach before, how can servitization be introduced?
Figures from the Annual Manufacturing Report 2018 also conclude that all manufacturers viewed ‘products-as-a-service’ as offering at least some extra sales opportunities over just selling products.
Sertivization can be applied to many industries – agriculture, lighting, coatings and automotive – and integrated into business models in many ways; data collection, analysis, supply chain opportunities and monitoring of products.
Benefits of adopting servitization:
- Lengthened customer relationship
- Increased revenue
- Strengthened relationship between manufacturer and consumer
A new era of service
Coventry-based company, Marchant Cain, founded in 2006 by Rob Marchant and Pam Cain, design and produce window regulators and other bespoke automotive components for super and hyper cars.
The duo believe being able to offer their customers a complete supply chain, has enabled them to double their turnover and staff count in the last two years. The business design and manufacture highly bespoke components, often finding and sourcing new ways to deliver their products.
On a recent visit to Marchant Cain, Pam told The Manufacturer: “We are trying to build a network of like-minded suppliers who are agile and capable of delivering at the same automotive level as we are.”
She said: “If we can create that diverse network of many individuals, we can supply our customers with a whole supply chain.”
Being able to offer customers a very advanced design service and also having the connections to be able to create an entire supply chain, in response to a customer’s request, is a route of servitization that many manufacturers could apply to their business.
The co-founders believe they offer a more complete solution by having this strong network of suppliers and knowing that they can connect their individual customers to certain other companies as part of their operation.
Rob Marchant told The Manufacturer: “Innovation is not only in the product, it is in the approach, manufacturing routes and delivery. The whole operation will then easily be converted into monetary saving for the customer.”
Case study: Smart factory as a service
Another different servitization strategy is robotics company KUKA, proposing a ‘smart factory as a service’ concept.
The project will reportedly be capable of manufacturing, packaging and delivering a highly customised product in any capacity in an extremely short cycle time.
The collaboration is between three companies who are pooling their core strengths together.
- KUKA, would develop the robot-based automated plant.
- MHP to provide its digitalisation expertise, offering consultancy on the manufacturing approach throughout the project phase, and delivering integrated systems.
- Munich Re would oversee the business model with integrated risk management and finance models.
Together, the partners aim to digitalise the whole value chain, establish a high quality end-to-end data flow, and connect areas and systems in the production development process.
Smart factory as a service concept, will reportedly independently and flexibly produce different product types in any quantity and entirely fulfil clients’ changing demand for customised products.
Case study: recycling community waste
Coral Products (Mouldings) LTD, a plastic injection mould manufacturer, is investing in an in-house recycling facility, to offer councils and housing associations the opportunity to recycle their unwanted plastics.
The Manufacturer spoke to Coral Products (Mouldings) LTD, managing director, Neil Ashurst about the proposals which are to be based in the company’s Haydock site in Merseyside.
Ashurst explained: “The recycling plant will mean that we are able to offer councils, housing associations and other companies the option of recycling their waste plastic or old containers, and we can then use this new recycled material to create other products.”
This servitization strategy will see the business utilise waste plastic from surrounding areas to produce their products, offering a mutually beneficial service that is also more environmentally friendly, as total volume of plastic created is reduced.
You may also be interested in reading:
- 5 steps to successful field service servitization
- Three examples that make the case for service-based models
- Augmented Reality in service: Ready for the prime time?
- Daikin Applied UK: One manufacturer’s “revolutionary” shift to service