New, cloud-based solution leverages Machine Learning and Artificial Intelligence to predict failures and maximize product uptime, ultimately enabling servitization...
ARCHIVE FOR THE ‘servitization-2’ CATEGORY
Nov 27, 2019 • Software & Apps • News • SaaS • Servitization • Syncron • Servitization and Advanced Services
New, cloud-based solution leverages Machine Learning and Artificial Intelligence to predict failures and maximize product uptime, ultimately enabling servitization...
Nov 13, 2019 • Features • future of field service • servicemax • Servitization • Sustainability
In this extract from a white paper published by ServiceMax we explore the question of sustainability in field service and how as well as being better for our planet it can also be better for a service organisations bottom line as well...
In this extract from a white paper published by ServiceMax we explore the question of sustainability in field service and how as well as being better for our planet it can also be better for a service organisations bottom line as well...
Nov 04, 2019 • Features • Management • Michael Blumberg • Outcome based services • Servitization
Much has been made of the potential benefits of adopting at least some servitized strategies within a service portfolio. However, the processes that need to be put in place are complex and a delicate balance between increasing profitability and...
Much has been made of the potential benefits of adopting at least some servitized strategies within a service portfolio. However, the processes that need to be put in place are complex and a delicate balance between increasing profitability and overcommitting on contractual obligations needs to be struck. Here Michael Blumberg offers his guidance as to what systems of support are required to achieve a successful path towards servitization...
Oct 30, 2019 • Features • Management • Jan Van Veen • Service Design • Servitization • Service Innovation and Design
With experiments you can test all critical assumptions and success factors of your service innovations, get better data and take better decisions before scaling up investment and implementation. As a result, you will only pursue the viable and...
With experiments you can test all critical assumptions and success factors of your service innovations, get better data and take better decisions before scaling up investment and implementation. As a result, you will only pursue the viable and valuable ideas, will not waist resources on unsuccessful ideas nor jeopardies today’s business, brand and confidence of any stakeholders or colleagues. Jan Van Veen discusses...
Oct 30, 2019 • Software & Apps • News • SaaS • Servitization • Software and Apps
BlueprintCPQ launch SaaS solution that supports servitization transformation.
BlueprintCPQ launch SaaS solution that supports servitization transformation.
Oct 14, 2019 • Features • automotive • manufacturing • Gary Brooks • Servitization • software and apps • Syncron • Outcome-based service • industry events
In November this year top-tier after-sales service solution provider Syncron will be hosting the inaugural edition of a new two day forum Innovate2019. Designed to be a first-of-its kind global leadership summit focused on facilitating...
In November this year top-tier after-sales service solution provider Syncron will be hosting the inaugural edition of a new two day forum Innovate2019. Designed to be a first-of-its kind global leadership summit focused on facilitating conversations and providing insights for manufacturers exploring the inevitable shift to servitization: selling products-as-a-service.
To find out more Kris Oldland , Caught up with Syncron CMO Gary Brooks...
Sep 16, 2019 • Features • Management • Continuous Change • Jan Van Veen • moreMomentum • Servitization
Getting service on the table the strategic executive meeting is a challenge many field service directors will be familiar with, here Jan Van Veen, Managing Director of MoreMomentum provides three top tips for actually making it happen...
Getting service on the table the strategic executive meeting is a challenge many field service directors will be familiar with, here Jan Van Veen, Managing Director of MoreMomentum provides three top tips for actually making it happen...
Aug 12, 2019 • Features • Advanced Services Group • aston business school • future of field service • Platforms • Servitization • eco-systems
New research from the Advanced Services Group at Aston Business School suggests that a focus on product as a platform and a clear understanding of the operational network can positively influence servitization efforts. Dr Kawaljeet Kapoor...
New research from the Advanced Services Group at Aston Business School suggests that a focus on product as a platform and a clear understanding of the operational network can positively influence servitization efforts. Dr Kawaljeet Kapoor explains…
Servitization is widely recognised in the manufacturing sector today for its potential to bring about sustainable business growth and realise benefit from society’s appetite for services. Servitization is generally understood as the process by which a manufacturing company transforms its business model and capabilities to compete through a combination of products and services, rather than just products alone. For manufacturers, achieving their servitization goals means going beyond their product-driven internal capabilities.
It requires them to move away from the traditional linear supply chain models, in favour of collaborative working with external partners, which can evolve into a network with multiple, interacting actors.In this setting, which we would call an ecosystem, platforms enable increased interactions and transactions between the multiple actors and partners, which were not necessarily a part of the initial supply chains.
There is a plethora of companies that successfully utilise platform strategies. Intel and Windows, for example, bring together third party companies and developers to create innovation platforms.
Others, such as Airbnb and Amazon, allow producers, consumers and organisations to find each other and enable a multitude of transactions with each other. Clearly, businesses across a range of industries are investing in platforms. However, examples from the manufacturing sector are far and few between.
An exploratory research project by The Advanced Services Group at Aston Business School, is looking to change that. The project focuses on understanding the servitization process in a manufacturing setting and investigates the influence platforms have on a manufacturer’s journey to servitization.
What do we mean by platform and ecosystem?
Simply put, a platform can be a product, service, or technology owned by a company that external innovators use as a foundation to develop new products, services or technologies. These newly developed offerings always complement a platform owner’s original offerings, which is why we call such offerings, the complements. By the same logic, we call the companies or people who develop such complements, the complementors.
For instance, on a Fire TV platform, Amazon is the platform owner, and the app developers are the complementors, who use the Fire TV stick as a foundation to develop a multitude of apps for the end-users. A platform, its complements and all network actors put together, is what we call a platform ecosystem. In a platform-based ecosystem, you can typically expect to see a platform owner, the complementors, and the end users as its key actors.
"Modularity makes enabling varied functionalities very simple. In a manufacturing setting, product offerings can be modularized and broken down into services associated with product spares, preventive maintenance, fleet management, and so on..."
These platforms can have varying architectural types. They can be of internal – closed nature, such as Makita’s cordless power tool platform, where all tools can only be powered by a battery developed in-house. They can be across a supply chain – partially open, examples of which can be found across all assembly industries. Both of these types aim at increasing offering variety without complicating internal structures.
They can also be external – open for all external innovators in an industry-level ecosystem setting. An example of this is IBM’s collaboration with Intel and Microsoft in the 1980s, which led to the development of the IBM PC, an open platform used by complementors to develop compatible software, such as Word and others.Irrespective of the types, these architectures are increasingly modular in nature, which means that platforms increase flexibility and reusability.
Complicated production processes are broken into smaller parts or modules that deliver an intended technological function in the overall system, and by doing so, enhance the core functionality of a platform. For example, Google Chrome is a search engine, and its extensions are ‘modules’ developed to offer extended functionalities like a calendar, dictionary or storage drive. In other words, when modules connect to a platform, they add new functionalities to include extended utilities and features.
Therefore, modularity makes enabling varied functionalities very simple. In a manufacturing setting, product offerings can be modularized and broken down into services associated with product spares, preventive maintenance, fleet management, and so on. In essence, manufacturing firms can configure multiple offerings using different combinations of the same modules.
Why the ecosystem view is important
The concept of platforms has been a topic of discussion for more than two decades. Both research and practice have shared fundamental insights on platform dynamics and how they work. But the focus on platforms alone is not enough – the ecosystem in which the platform operates is just as important. Understanding the ecosystem, identifying the different actors and understanding your own role will ultimately determine the platform’s success.
Taking a full view of the ecosystem will account for all actors involved and help manufacturers understand which actors can add the most value to the platform and deliver the service-led offerings intended in the first place - beyond.
Platforms in servitizing companies
The word platform is often associated with all things digital, such as a software component or an application. In fact, platforms are more than just a piece of software, particularly in a servitization-based setting. It would not be too far fetched to suggest that if a manufacturer is acting as a platform leader, then their platform will essentially be their ‘product’.
As they have ownership of the product, it is their decision if and how much of the product and/or its specifications can be shared with complementors to produce novel offerings. Let’s take Trucknology, MAN’s fleet management solution, as an example here. Looking for solutions to better manage fuel costs and truck uptime - their customers’ main pain points - commercial truck manufacturer MAN partnered with telematics company Microlise.
"Technology is only one of the many components that go into building an ecosystem, and there are social and architectural aspects that are key and deserve due recognition..."
Together, Microlise and MAN produced a rating system across a range of driver characteristics, such as harsh braking and harsh cornering. The result was the Microlise Tracking Unit (MTU3), which was installed in MAN trucks to feed back driver and vehicle performance data. Customers can now view driver reports, which help to better manage drivers and inform driver training. Drivers can also access the reports to assess their own performance and improve their skills based on accurate data.In this example, MAN represents the platform owner and Microlise represents the complementor, i.e. the external innovator.
The Microlise Tracking Unit is the complement, and because it can only be of value once installed onto the MAN truck, the truck as MAN’s original product offering has become the platform. Successful examples like MAN are evidence that in manufacturing, collaborating with an extended network of actors can derive benefits of maximum value from investments, as well as lasting relationships with the customer even after product sales.
Research on Platforms and Ecosystems
Yet, not many manufacturers have adopted this approach in their servitization strategies. Whilst the terms platform ecosystems, platform thinking, and platform approach are increasingly used in business and manufacturing, they are often used to describe technology alone. Our research suggests, however, that technology is only one of the many components that go into building an ecosystem, and there are social and architectural aspects that are key and deserve due recognition.
The aim of this research project is to explain how platform ecosystems influence manufacturers developing servitization-based offerings. The project is based on interviews with manufacturing companies on their way towards servitization. A key outcome of this research will be a guide to help servitizing firms position themselves across the different roles (platform leader, complementors, etc.), map dominant players and potential partners, in order to use their network dynamics strategically to pursue collaborative innovation.
Dr Kawaljeet Kapoor is a Research Fellow at The Advanced Services Group at Aston Business School.
Jul 18, 2019 • Features • Advanced Services Group • aston business school • Professor Tim Baines • Servitization • Servitization Conference
While attending the Spring Servitization Conference, Mark Glover caught up with Professor Tim Baines (pictured), Director of the Advanced Services Group at Aston Business School. Conversation ranged from the discipline’s origins to the impact of...
While attending the Spring Servitization Conference, Mark Glover caught up with Professor Tim Baines (pictured), Director of the Advanced Services Group at Aston Business School. Conversation ranged from the discipline’s origins to the impact of Industry 4.0 and why societal shifts in sustainability and service consumption are key factors behind servitization’s next movement...
When I joined Field Service News one word appeared more frequently in my browser and in-box than any others: servitization. Its resonance was affirmed by my Editor Kris Oldland; who, during one of our early induction meetings, explained the pivotal role it plays in modern manufacturing. Three months’ on, I flew to Stockholm, and then took a two-hour car journey to Linkoping where I was to attend a conference dedicated solely to the discipline.
So, it was during a coffee break I sat down with Tim Baines, Professor of Operation Strategy at the Aston Business School and a significant player in servitization’s evolution. I was pleased to have an audience with someone who could shed some light on an area that to a layman (me) can be slightly overwhelming. We both grabbed a coffee and one of the many excellent Swedish pastries on offer before finding a quiet corner to talk.
I started off (perhaps boldly) by explaining my slight surprise that a whole three-day conference on servitization existed; that universities have whole departments dedicated to its research – many of whom were here in Sweden presenting – and that academic papers on the subject are being circulated widely. “Business researchers observe industry,” Tim said, sipping his drink. “They’re looking for phenomena, which they are trying to conceptualize and describe and test their hypothesis and understanding. They ultimately arrive at a clinical description of what that phenomena is.”
The phenomena of servitization emerged from the marketing community in the 1980s, Tim tells me, with its first research work appearing in the European Management Journal. Sandra Vandermerwe and Juan Rada’s paper Servitization of Business: Adding Value by Adding Service was published in 1988 and the former is now credited with introducing the term ‘servitization’ to represent the addition of services to enhance a manufacturer’s commercial offerings.
However, the discipline went into incubation. That was until the 2000s when Tim, along with Andy Neely from Cambridge University and Raj Roy from Cranfield niversity respectively, were awarded a research grant from the Engineering and Physical Sciences Research Council (EPSRC) to resurrect its study. “We all put a lot of effort into it,” Tim recalls. “If you look at the citations; the academic citations on servitization; look at the highest cited papers on servitization, it was really down to our collective work.”
Thanks in part to the funding, as well as the efforts of Tim and his fellow academics interest in the discipline flourished both academically and in practice. Demand for a specialist, academic event grew and eight years ago the Spring Servitization Conference was born; its eight years testament to its growth and popularity. Its first incarnation was a workshop of sorts laying out the basic principles of what the group wanted to achieve; essentially something that was crossdisciplinary within a tight-knit, specialised community.
Tim explains: “The conference is a platform for people to network, to meet each other, to share those ideas, those insights, and to learn from a few carefully chosen manufacturers how they’re seeing the world. I think what we will see in a few years’ time, we’ll have a stronger group coalescing around the key topics. Ultimately, this is a community which could very well define an
equivalent of Industry 4.0 or Industry 5.0.”
“Don’t be put-off by the word servitization... all manufacturers can gain some value through service...”
Industry 4.0 discussions were a key part of that morning’s presentations. Chairing a debate himself, Tim asked panelists if servitization was part of Industry 4.0 or vice-versa? Away from the conference hall I pushed him on his own thoughts. “Most manufacturing companies,” he said, “would associate Industry 4.0 with what’s going on inside the factory. Servitization invariably is what’s going on beyond the factory gate. In reality servitization predates industry 4.0. It will exist concurrently, and in a few years’ time will be still going on and industry 4.0 will have come and will have gone.”
Aligning with the conference’s theme, Delivering Services Growth in the Digital Era, Tim suggests firms feel more comfortable adopting servitization as digital offered a layer of security. “Digital is de-risking, enabling those more advanced services to be offered with lower risk,” he says. “It’s making it easier for manufacturers to do it.”
The other driver, Tim continued, is a broader societal shift around service consumption superseding product consumption. “If you think about servitization; it’s not a question in my mind whether companies will make more money from services or less money from services – that’s an outdated question, an outdated conversation. It’s really a case in the way that society is going. We are consuming more services where the appetite is for more sophisticated services.” Sustainability, another large societal issue is also being bearing down on the servitization sphere.
Tim is hopeful that servitization - and industry 4.0 - can ultimately negate the environmental impact of material-heavy supply chains. He referenced a presentation that morning from Cranfield University’s Tobias Benjamin Widmer, who talked about the de-materialisation of the chain; reducing the consumption of raw materials while still achieving a desired outcome.
From that, our conversation naturally turned to regulation and the influence of Government on sustainability initiatives. Firm polices around electric cars, for example, would Tim Says, have an impact on the supply chains. “If the incentives are there for electric cars, why would you have a diesel manufacturing plant? If you don’t have a diesel manufacturing plant, then your whole supply chain evaporates.”
“Here’s an interesting one,” he smiles. “The number of rotational components in a diesel engine car: about 1,500. In an electric car: about 22. Now what’s that going to do your material supply chain?”
We finish our drinks, aware of the slow movement of delegates at they file back into the conference room, themselves refreshed by caffeine and pastries. I shake hands with Tim and thank him for his time, and we both agree to keep in touch.
The next day, I send Tim an email asking if he could possibly spare a copy of his book he wrote with Howard Lightfoot, Made to Serve. The book is seen as an excellent primer into servitization, and I said as much Tim in my email; how it could enhance my learning on a topic that I was beginning to find rather intriguing.
The book arrived in my mailbox a few days’ later; a good-looking tome with a striking cover. A contemporary, simple image of three factories, the middle one with a striking red path leaving its front gate; fanning in perspective to the base of the cover. I read the book’s preface: “Don’t be put-off by the strange word of servitization,” part of it said, “all manufacturers can gain some value through service.”
I recalled the interview in Sweden, when Tim told me about the early days of servitization; when people queried the term, wondering how you spell it, asking if they would make money out of these advanced services. “Now, we don’t have these questions anymore,” Tim had said.
What is a relatively young area of research, servitization now seems to be an integral cog of a manufacturer’s approach to revenue. As Tim suggested, technology will evolve and eventually become exctinct (Industry 4.0, for example), but servitization, as a theory and practice, will continue to grow alongside and compliment manufacturing. In short, making money from selling spare parts is no longer the revenue stream it once was.
When I joined Field Service News one word appeared more frequently in my browser and in-box than any others: servitization. Its resonance was affirmed by my Editor Kris Oldland; who, during one of our early induction meetings, explained the pivotal role it plays in modern manufacturing. Three months’ on, I flew to Stockholm, and then took a two-hour car journey to Linkoping where I was to attend a conference dedicated solely to the discipline.
So, it was during a coffee break I sat down with Tim Baines, Professor of Operation Strategy at the Aston Business School and a significant player in servitization’s evolution. I was pleased to have an audience with someone who could shed some light on an area that to a layman (me) can be slightly overwhelming. We both grabbed a coffee and one of the many excellent Swedish pastries on offer before finding a quiet corner to talk.
I started off (perhaps boldly) by explaining my slight surprise that a whole three-day conference on servitization existed; that universities have whole departments dedicated to its research – many of whom were here in Sweden presenting – and that academic papers on the subject are being circulated widely. “Business researchers observe industry,” Tim said, sipping his drink. “They’re looking for phenomena, which they are trying to conceptualize and describe and test their hypothesis and understanding. They ultimately arrive at a clinical description of what that phenomena is.”
The phenomena of servitization emerged from the marketing community in the 1980s, Tim tells me, with its first research work appearing in the European Management Journal. Sandra Vandermerwe and Juan Rada’s paper Servitization of Business: Adding Value by Adding Service was published in 1988 and the former is now credited with introducing the term ‘servitization’ to represent the addition of services to enhance a manufacturer’s commercial offerings.
However, the discipline went into incubation. That was until the 2000s when Tim, along with Andy Neely from Cambridge University and Raj Roy from Cranfield niversity respectively, were awarded a research grant from the Engineering and Physical Sciences Research Council (EPSRC) to resurrect its study. “We all put a lot of effort into it,” Tim recalls. “If you look at the citations; the academic citations on servitization; look at the highest cited papers on servitization, it was really down to our collective work.”
Thanks in part to the funding, as well as the efforts of Tim and his fellow academics interest in the discipline flourished both academically and in practice. Demand for a specialist, academic event grew and eight years ago the Spring Servitization Conference was born; its eight years testament to its growth and popularity. Its first incarnation was a workshop of sorts laying out the basic principles of what the group wanted to achieve; essentially something that was crossdisciplinary within a tight-knit, specialised community.
Tim explains: “The conference is a platform for people to network, to meet each other, to share those ideas, those insights, and to learn from a few carefully chosen manufacturers how they’re seeing the world. I think what we will see in a few years’ time, we’ll have a stronger group coalescing around the key topics. Ultimately, this is a community which could very well define an
equivalent of Industry 4.0 or Industry 5.0.”
“Don’t be put-off by the word servitization... all manufacturers can gain some value through service...”
Industry 4.0 discussions were a key part of that morning’s presentations. Chairing a debate himself, Tim asked panelists if servitization was part of Industry 4.0 or vice-versa? Away from the conference hall I pushed him on his own thoughts. “Most manufacturing companies,” he said, “would associate Industry 4.0 with what’s going on inside the factory. Servitization invariably is what’s going on beyond the factory gate. In reality servitization predates industry 4.0. It will exist concurrently, and in a few years’ time will be still going on and industry 4.0 will have come and will have gone.”
Aligning with the conference’s theme, Delivering Services Growth in the Digital Era, Tim suggests firms feel more comfortable adopting servitization as digital offered a layer of security. “Digital is de-risking, enabling those more advanced services to be offered with lower risk,” he says. “It’s making it easier for manufacturers to do it.”
The other driver, Tim continued, is a broader societal shift around service consumption superseding product consumption. “If you think about servitization; it’s not a question in my mind whether companies will make more money from services or less money from services – that’s an outdated question, an outdated conversation. It’s really a case in the way that society is going. We are consuming more services where the appetite is for more sophisticated services.” Sustainability, another large societal issue is also being bearing down on the servitization sphere.
Tim is hopeful that servitization - and industry 4.0 - can ultimately negate the environmental impact of material-heavy supply chains. He referenced a presentation that morning from Cranfield University’s Tobias Benjamin Widmer, who talked about the de-materialisation of the chain; reducing the consumption of raw materials while still achieving a desired outcome.
From that, our conversation naturally turned to regulation and the influence of Government on sustainability initiatives. Firm polices around electric cars, for example, would Tim Says, have an impact on the supply chains. “If the incentives are there for electric cars, why would you have a diesel manufacturing plant? If you don’t have a diesel manufacturing plant, then your whole supply chain evaporates.”
“Here’s an interesting one,” he smiles. “The number of rotational components in a diesel engine car: about 1,500. In an electric car: about 22. Now what’s that going to do your material supply chain?”
We finish our drinks, aware of the slow movement of delegates at they file back into the conference room, themselves refreshed by caffeine and pastries. I shake hands with Tim and thank him for his time, and we both agree to keep in touch.
The next day, I send Tim an email asking if he could possibly spare a copy of his book he wrote with Howard Lightfoot, Made to Serve. The book is seen as an excellent primer into servitization, and I said as much Tim in my email; how it could enhance my learning on a topic that I was beginning to find rather intriguing.
The book arrived in my mailbox a few days’ later; a good-looking tome with a striking cover. A contemporary, simple image of three factories, the middle one with a striking red path leaving its front gate; fanning in perspective to the base of the cover. I read the book’s preface: “Don’t be put-off by the strange word of servitization,” part of it said, “all manufacturers can gain some value through service.”
I recalled the interview in Sweden, when Tim told me about the early days of servitization; when people queried the term, wondering how you spell it, asking if they would make money out of these advanced services. “Now, we don’t have these questions anymore,” Tim had said.
What is a relatively young area of research, servitization now seems to be an integral cog of a manufacturer’s approach to revenue. As Tim suggested, technology will evolve and eventually become exctinct (Industry 4.0, for example), but servitization, as a theory and practice, will continue to grow alongside and compliment manufacturing. In short, making money from selling spare parts is no longer the revenue stream it once was.
Field Service News is published by 1927 Media Ltd, an independent publisher whose sole focus is on the field service sector. As such our entire resources are focused on helping drive the field service sector forwards and aiming to best serve our industry through honest, incisive and innovative media coverage of the global field service sector.
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