6 areas manufacturing companies should focus on to deliver Service Value

by NIck Frank on November 18, 2011

Manufacturing companies are increasingly seeing services as a way to differentiate themselves from the competition. But is there a recipe for success?

Probably the first step is to realize that it is a fundamental paradigm change in leadership thinking.  Business  leaders who have developed their ideas in manufacturing and technology, have to move away from seeing Service as necessary evil or purely as a cost center. They must change their paradigm to seeing their value as an ‘output or capability’ that supports their customers own business goals. This does not at all diminish the importance of manufacturing & technology, which are critical to delivering these capabilities profitably.

Having made this paradigm shift and engaged in what is sometimes known as servitization, are there common themes in companies that do this well, such as BAE, Alsthom, Rolls Royce and GE.

In a recent interview on blogtalkradio, Professor Tim Baines from Aston University in the UK, highlighted 6 areas, which resonated with my own experiences.

 

  1. Manufacturing Facilities located close to the customer, so as to offer faster and more flexible services.
  2. Increase Manufacturing Vertical Integration:  For complex products such as rolling stock or engines, this allows greater scope for developing product systems that support the services profitably.
  3. Information and Communication technologies: become key in collecting data on product performance which enables:
    a) Lower cost delivery of the service
    b) Collection of data that allows the value offered to the customer to be truly understood
  4. People, need to change from a manufacturing perspective that focuses product delivery to a customer centric approach that focuses on the impact on the customer
  5. Performance measures that develop beyond the SLA’s which monitor adherence to a specification, but to metrics that are linked to the customers own measures of success.
  6. Processes: that move from being reactive around service, to being pro-active

But the key as often is to make that shift in mind-set. To move  away product & technology benefits and think more about the CAPABILITY your business is delivering.

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