If your current axiom is make it and sell it, you might want to think again. UK manufacturers, while often agile and adaptable, face increasing competition in both manufacture and design from emerging markets.
What can you do to differentiate yourself and shore up your customer base, while attracting more interest, and orders?
Could the answer be servitisation?
What is Servitisation?
Essentially, it’s the process whereby you transform your product into a service, or at least you create a service wraparound for your product to add value to it.
The aim is to create something where product and service are inseparable, an integrated whole that channels customer expectations into something that stands out in the marketplace
Here are some examples of successful servitisation:
- Rolls Royce provides a power by the hour service to its customers where, instead of selling them an aero engine product, they sell them the power the engine generates. As an integral part of this package, they include full support and maintenance.
- Alstrom designed the innovative Pendolino high speed trains for Virgin. As part of its offer, it repaired and maintained the track on which the trains would run.
This marks a shift in emphasis away from selling a product to selling a product-as-service. It’s a progression from make it and sell it to something more specifically customer-focused, designed to differentiate you in the marketplace.
What are the Challenges?
To adopt servitisation is to make a strategic decision, and this is likely to require a change in mindset from traditional manufacturing.
It means making customer service a significant driver in what you do, and being prepared for the long-term, because it is unlikely to offer much in the way of short-term competitive gains.
Is it worth it?
With the manufacturing threat from emerging markets, UK manufacturers may not be able to compete on price alone. As a manufacturer, you must be able to offer something more, and something distinctive.
Moreover, the spread of smart technology – the internet of things – raises expectations of customer service, and product responsiveness, exponentially.
In the future, servitisation may not be an option but the expected standard that many products will have to reach. It is vital then that manufacturers are fully prepared and adaptable to change.
To discuss the options for transforming your product into a service, please contact us.
