The great and the good of the service management industry came together at this years Service Management Expo held in London's Exel and Field Service News was at the heart of the action hosting the Field Service Solutions Zone.
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Aug 28, 2015 • video • Nick Frank • Service Management Expo • Servitization • siemens • tomtom
The great and the good of the service management industry came together at this years Service Management Expo held in London's Exel and Field Service News was at the heart of the action hosting the Field Service Solutions Zone.
Here we bring you a selection of the speakers from Day One including: George De Boer, International Alliance Manager, TomTom Telematics, Professor Tim Baines, Aston Business School, Nick Frank, Principal Consultant at Frank Partners, Steve Foxley, Customer Services Director Siemens.
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Aug 10, 2015 • Features • future of field service • Dr. Michael Provost • Servitization
As someone who has been involved in the growing trend towards Servitization and Advanced Services since their inception, Dr Michael Provost is perfectly placed to help make sense of what can be a complex topic in his new book “Everything Works...
As someone who has been involved in the growing trend towards Servitization and Advanced Services since their inception, Dr Michael Provost is perfectly placed to help make sense of what can be a complex topic in his new book “Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management” (www.everythingworkswonderfully.com).
Mike’s book begins with an excellent short story that helps define Servitization in a clear and concise way. Click here to read the first part. Now Field Service News is pleased to publish the conclusion…
A Short Story (continued)
Peter Carpenter* managed to book some time with Anna Edwards* and they met two weeks later. Over coffee and sandwiches in Anna’s office, Peter went through the thinking he had been doing and showed Anna the ‘elevator speech’ that he had quickly put together during the train journey to HQ.
Anna stared at this for a minute or two before turning to Peter with a broad smile on her face. “I think you’ve cracked it, Peter!” she exclaimed. “I can see it now: our customers want what our power units do, not what they are. If we sell reliable power, not units, our customers will come to us rather than the competition to get what they really want and will pay us a fair price instead of ringing me up at all hours of the day and night demanding yet more concessions.”
“You realise, Anna, that this will mean the company will have to change its thinking, from top to bottom.” said Peter. “For example, we won’t be able to rely on profits from spares sales to offset any losses made on unit sales because spares usage will appear on our books, not the customers’. Our units will have to consume fewer spares than they do now. Engineering and Manufacturing will have to listen to inputs from Spares and Repairs and we will need to put comprehensive and robust systems in place to gather, store, process and output information about how our units are working in the field. It’s a whole different mindset and some of the current managers won’t get it.” “Don’t worry, Peter!” retorted Anna. “Those that don’t buy into this will either have to change their thinking or leave. I’ll need a plan, a budget and a list of the people you think you’ll need to help you for the next Board meeting, to which you are invited.”
It’s a whole different mindset and some of the current managers won’t get it.
The Board poured cold water on Peter’s presentation, but Anna insisted that Peter’s initiative had to be pursued, made Peter the Board member responsible and gave him her full support. The next few years were hard, but genuine progress was made by Peter and his team and even the most sceptical Board members couldn’t brush aside the company’s much improved financial state. Peter set up a subsidiary to ensure that the initiative grew without being stifled by the old guard, who saw their power and status threatened and pushed back hard. As predicted, those who didn’t fit into the new culture either left voluntarily or were asked to go.
MW4 grew rapidly: many managers and employees saw it as an opportunity to escape from the limitations imposed by existing corporate structures, the company was able to recruit many good people with the skills it required and those involved relished the chance to contribute fresh ideas. Eventually, as the market responded positively to the new way the organisation conducted its business and built more constructive relationships with its customers, sales and profits rose, the City started to take notice and the share price began to rise rapidly. Anna knew that she had turned the corner when she overheard a long-serving manager talk about product sales as the entry ticket to the true market, which was satisfying real customer needs rather than merely selling clever bits of metal.
The true market was satisfying real customer needs rather than merely selling clever bits of metal.
Anna was just finishing off her last cup of ‘canteen cappuccino’ when Peter breezed in. “The Oracle has spoken!” he exclaimed. “I am the new boss! It wouldn’t have happened without your unwavering support over the last ten years, Anna. Thanks for everything!” Anna stood up to shake Peter’s hand, knowing that the company would grow and prosper under Peter’s wise guidance. As she left for the last time, a thought struck her as she turned on the windscreen wipers: perhaps she should use the proceeds from selling some of her share options to buy that villa near Saint-Tropez that Chris had seen advertised in the FT. It would make a good surprise birthday present for him and provide a much-needed bolthole from the atrocious UK weather.
* Note: the company and characters are fictitious, but the scenarios are based on experience.
Please note that this short story has been previously published in the following:-
Provost, M. (2014). Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management - a Short Story. Asset Management and Maintenance Journal, Volume 27, Issue 5, September 2014, pp. 43-45. Mornington, Victoria, Australia: Engineering Information Transfer Pty Ltd.
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Jul 29, 2015 • Features • future of field service • M2M • management • Dr. Michael Provost • Servitization
Whilst the trend towards Servitization is rapidly becoming increasingly important for manufacturers and one that will have a significant impact on how field services operate, it is often viewed as a complex subject.
Whilst the trend towards Servitization is rapidly becoming increasingly important for manufacturers and one that will have a significant impact on how field services operate, it is often viewed as a complex subject.
However, one man who has been involved with the movement since its early beginnings is Dr Michael Provost. His excellent book “Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management” (www.everythingworkswonderfully.com) is a distillation of his knowledge and experience in this area built up over nearly four decades, making it a much more accessible topic.
As an introduction, Mike opens his book with an excellent short story that neatly summarises the concept of Servitization. Field Service News is pleased to be able to share it with you here…
A Short Story
Anna Edwards* was a very happy woman. It was her last day as Managing Director of Precision Powerplants* and she was looking forward to a few months of rest and relaxation on the sunny Côte d’Azur with her husband Chris* while she pondered her next move. She knew that she was leaving the company in good shape for her successor (whoever that happened to be: there were several candidates from both inside and outside the organisation who were being put through the on-going ‘beauty contest’) and felt very satisfied with the progress that the organisation had made on her watch and the transformation that she had overseen.
The organisation’s reputation for well-engineered power units just wasn’t being reflected in profitable sales.
She decided to bring in Peter Carpenter*, an old friend from university whom Anna admired for his out-of-the-box thinking, no-nonsense tell-it-how-it-is approach and excellent people and communication skills. She sent Peter home to have a ‘big think’, telling him to stay away from HQ and the alpha gorillas all trying to outdo each other with short-term slash-and-burn fixes which Anna felt were the painful road to corporate oblivion. Peter’s brief was simple: produce a plan for getting out of the ‘commodity trap’ that the company had fallen into and do it quickly before the inevitable crisis came and the whole organisation would be brought to its knees.
Peter had been musing about how to save the company for a few weeks when Sara* burst in to his study as he was casually doodling on a notepad. “The boiler’s broken yet again, Peter!” she fumed. “I’ll have to cancel my day in town while I wait for the man to turn up to fix it. I bet he won’t even have the right parts in his van either! Why couldn’t the thing let me know that it was going to break, so I could arrange the repair at my convenience? Why can’t it tell the repair man what’s wrong? I don’t give a damn about boilers: all I want is hot water and a warm house! Looking after it is nothing but hassle!” She stormed out, clearly not at all pleased.
Just then, Peter had his ‘eureka moment’. Were customers thinking like this about power units? After all, they had businesses to run and their own customers to serve and didn’t want to worry at all about power sources. Were the units that they had bought just an irritating distraction to them, requiring time, effort and expertise to look after that they really didn’t have? What if Precision Powerplants used its expertise to look after the units it made (after all, the company had designed and built them, so no-one else should know them better) and charged for the power delivered, not the physical units? Would this idea get the company out of its death spiral?
Many of the capabilities needed were already in place: they just weren’t being brought together into a coherent whole.
Peter began to ask questions and research his idea in more detail and discovered that many of the capabilities needed were already in place: they just weren’t being brought together into a coherent whole. Peter found people in the organisation who had, despite some management objections and hostility from other co-workers, devised ways of mathematically modelling unit performance and creating actionable information from the data that could be gathered and transmitted from equipment in service: there were also experts in Spares and Repairs who knew how the units should be looked after. All this valuable and unique knowledge had been ignored by Engineering and Manufacturing who just wanted to design, make and sell units before pushing them out of the door ASAP. Something would have to be done to move the organisation from a product to a service mindset, Peter decided, if his idea was to succeed.
* Note: the company and characters are fictitious, but the scenarios are based on experience.
Look out for the second part of the story, coming soon!
Please note that this short story has been previously published in the following:-
Provost, M. (2014). Everything Works Wonderfully: an Overview of Servitization and Physical Asset Management - a Short Story. Asset Management and Maintenance Journal, Volume 27, Issue 5, September 2014, pp. 43-45. Mornington, Victoria, Australia: Engineering Information Transfer Pty Ltd.
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Jul 27, 2015 • Features • CHange Management • disruptive technology • Servitization • truck servicing
Servitization in some sectors and for some companies is driven by market forces, not customer demand. In this exclusive interview with Field Service News, Des Evans, former Managing Director of MAN Truck and Bus UK and now Honorary business...
Servitization in some sectors and for some companies is driven by market forces, not customer demand. In this exclusive interview with Field Service News, Des Evans, former Managing Director of MAN Truck and Bus UK and now Honorary business professor at Aston University Business School, explains how the truck manufacturer transformed its business from a sales-led organisation to one focused on customer service.
As we begin to hear more and more about servitization, often it is the same company names being held up as core examples of adopting this approach. What is interesting is that these companies often tend to be in very disparate industries, but what they all have in common is that they have been able to harness technology to allow themselves to become a disruptive influence within their sector.
For some companies - Rolls Royce, for example - the move to an advanced services model has been client driven. For other companies such as truck manufacturer MAN Truck and Bus UK, however, the need to evolve has been very much market driven, as Des Evans explains.
“Over the past forty years truck volumes have almost halved, so you have to run a lot faster to stand still,” Evans begins “If you are not going to sell more vehicles, or gain more market share (which is expensive) then you have to divert your energies into service operations and into your installed customer base.”
“That was the real focus for us to develop the service business: talking to the installed base that was already in the market,” he continues.
MAN not only transformed their own company considerably, they also transformed the market for ever. Only now are some of their competitors beginning to catch up.
However, being a pioneer involves radical thinking and such thinking really needs to be driven from the top if it is to prove a success. For MAN, fortunately, it was an approach all of the senior executive team believed in.
“I think the organisation was a far more collegiate organisation than most and everything was very much a team effort,” Evans explains. “We had to focus on how we could not only sustain the business model but actually to maintain it. When faced with market volumes halving, whilst it is not exactly a burning bridge, we also knew we had to do something different. When we introduced the new truck model it was the trigger really to introduce the new business model as well.”
As is always the case with disruptive change, technology and fresh thinking walked hand-in-hand in the initial transition.
“The catalyst was the Trucknology generation which introduced electronic, digital vehicles as opposed to analogue, mechanical vehicles. It gave us the opportunity to present a completely new business case to the operator by including three years servicing as standard, not something you charge for. However, it required a completely different service organisation to deliver that and a completely different sales force.”
“The challenge was interesting. It did help us move our market share from 8% to 12%, albeit in a smaller market, but that was what we had to do. We had to increase volume, not necessarily by price cut but by some added-value service.”
Still, despite the new strategy being born out of necessity, it was still reliant on the technology, although the wider picture was also reliant on the culture within an organisation.
You had to get buy-in from all stakeholders.”
Yet despite the approach being both complex and ground breaking at the time, the premise at the heart of everything was in fact incredibly simple, it seems. “The main message for the customer both internally and externally was we were going to improve the profitability of the customer,” Evans explains. “Because we saw first hand that not only was the truck market itself going down but also the profitability of the operators was going down too. Simply, we could no longer afford to sell to a customer base that couldn’t afford to buy our products or services.”
“It was a case of trying to make your customers more profitable, and by doing so you could secure our future business,” Evans concludes.
Whatever the business driver, what MAN Truck and Bus UK has achieved in recent years has been both impressive and intelligent. They have revolutionised their industry and put service back at the heart it.
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Jul 23, 2015 • Features • Alstrom • Servitization • Customer Satisfaction and Expectations
In an exclusive interview with Field Service News, Alex Bill, Alstom Power explains to Kris Oldland how the servitization model works in the power generation industry.
In an exclusive interview with Field Service News, Alex Bill, Alstom Power explains to Kris Oldland how the servitization model works in the power generation industry.
For many the concept of servitization is both a new and challenging concept. Even the language around the movement can be confusing. Advanced Services, Outcome Based Solutions, Industrie 4.0 are all on the surface similar terms for the same thing.
At its bare bones it's a movement away from a one-off transaction based revenue stream to a more prolonged, long-tail service-focused revenue stream. Servitization is getting traction across the globe but for many it’s still in its infancy.
Alstom have embraced the servitization model across a number of divisions.
“For Alstom Power we have been doing these outcome-based services, or long-term service agreements since the early nineties and we’ve been very successful with these long-terms agreements, which we call operational service contracts. It’s something that we tie in with our upgrade packages,” Bill explains.
Of course the first challenge for a company trying to move towards such a solution is to answer what is often the customer's most important and usually most pressing question ‘What is in it for me?”
Continuous improvement
The way Alstom approach this equation is by continuously improving the service levels and outputs that they deliver to their client base.
“We do a lot of R&D and service R&D on improving the performance of our install- base products and then retrofitting that onto the install base” Bill explains.
Of course this R&D can feed not only the service division but also production of new solutions as well, Bill points out. “By doing this we are also making our new products better and then again tying that all together with long-term contracts which you could call outcome-based contracts.”
From a customer perspective there could be a very compelling argument for moving to outcome-based contracts.
But what about from the service company's outlook?
“From my own personal perspective one of the key benefits is securing long-term business,” Bill asserts. “With an outcome-based contract you can secure business with a customer or a range of customers for ten to fifteen years.”
Such long-term financial security is of course the answer at the heart of the servitization argument. The aim is to move away from the one-hit transaction and by doing so both spreading and increasing profits over a longer period but, as Bill reveals, the beauty of such an approach is that it can become practically self-perpetuating.
“In exchange for that long-term security you have, of course, to guarantee certain outcomes but it’s thanks to that long-term security that you can invest in your service R&D. Suddenly you’ve got a business case to make which is in fact quite a profound one. By investing in those upgrades and bringing them to market essentially it becomes self-fulfilling,” Bill explains.
With his relaxed and conversational manner, the way Bill explains it makes it seem like child’s play. Of course the opposite is true. Establishing such a close relationship with your clients is key if you are going to be able to make such an approach work.
You have to build the relationship with the customer at quite a few levels.
“That relationship is a key differentiator for us. It begins when we sell the new product and from there we are with the customer from day one. We then need to build on it and improve it through the services we deliver.”
Having worked both on the manufacturing and services side of the fence Bill is also well placed to see the difference between the two sides of the customer relationship.
“The interesting part from coming from the manufacturing side of the business is the customer you don’t really see until you are coming to the end of the process,” Bill explains when asked about the difference in approaching both the new-build and then the long-term service contracts.
“In service the customer is there at the beginning, the middle, and the end. The variability between customers is also more apparent: in their processes, for example, and understanding their individual needs and so forth. It really does take a different mindset as that variability and the needs of customers can be quite different. That’s always an exciting challenge,” he concludes.
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Jun 22, 2015 • Features • Future of FIeld Service • China • IoT • Servitization • Service Innovation and Design
Andy Neely, Founding Director of the Cambridge Service Alliance, hears about the challenges and enablers of servitization, the importance the country puts on technology, and the growth of e-platforms...
I recently spent a week in China, visiting...
Andy Neely, Founding Director of the Cambridge Service Alliance, hears about the challenges and enablers of servitization, the importance the country puts on technology, and the growth of e-platforms...
I recently spent a week in China, visiting the Southern China University of Technology (Guangzhou) and Ceibs, the international business school in Shanghai. While at Ceibs I participated in the first seminar on “Servitization and Service Innovation”.
Attended by around 100 people, industrial speakers at the seminar included eCoal (an online coal purchasing platform), HP, Sevalo (a construction and mining equipment services business) and SKF from the world of industry, whilst Professors Marjorie Lyles (Indiana University), Chris Voss (Warwick Business School), Xiande Zhao (Ceibs) and I delivered academic presentations.
It was a great trip, fascinating in so many ways, and here are my thoughts on some of the themes that came out for me at the seminar.
The importance of technology to China.
All the speakers talked about the way technology is changing China’s approach to business. They talked about all the traditional topics - cloud computing, big data, mobile, the need for better security. But they also talked about Internet Plus, China’s equivalent to Germany’s Industrie 4.0 and the rest of the world’s Internet of Things.They recognise that as more and more devices are connected to the net, ever greater volumes of data will be created and these data can potentially deliver new and valuable business insights if analysed and interpreted correctly.
Platforms were also a major theme.Many of the firms that spoke, including many of those in the audience, were looking to create platforms, often to combine buying power and/or to utilize spare capacity.
eCoal, for example, has created a coal buying platform which allows it to drive significant cost savings by pooling purchasing across multiple organisations. HP claimed to be the world’s biggest retailer of paper. With their print on demand services, where you pay per page rather than for the printer, HP is forced to buy large volumes of paper. But with large volumes comes the opportunity to negotiate discounts for bulk purchasing.
Many firms were looking to create platforms, often to combine buying power and/or to utilize spare capacity.
One reason so many firms were interested in platforms was the massive success of China’s three stars of eBusiness - Baidu, Alibaba and Tencent (the Chinese refer to them as BAT). These three firms dominate China’s discussion of eBusiness and have all successfully created platforms, which in turn create multi-sided markets. Tencent, for example, offers users access to free online games, sells the eyeballs to advertisers, but also sells the players of games equipment upgrades.
A dominant question underlying many of the comments at the forum, was how do we create platforms that will allows us to capture multiple, complementary sources of revenue for our businesses.We also talked about challenges of servitizing. The fact that having a strong product heritage or brand sometimes makes it more difficult to offer services. Interestingly a number of the speakers referred back to the roots of their organisations, obviously a product of their firm’s history, but I wondered whether history also constrained their thinking about the future.
Services and solutions often cross multiple products and categories.
SKF asked some fantastic questions about servitization. How do we persuade our customers to buy solutions from us before we have proved their value? Who buys services and solutions? Procurement is typically not structured that way. It thinks about products and categories, yet services and solutions often cross multiple products and categories.And finally we talked about enablers of servitization. What would make the transition to services easier?
Through the course of the seminar I heard five key themes:
- Get inside the mind of your customer’s customer. Understand what is value to them, so you can better help your customer create value for their customer; to understand you need deep relationships - ask yourself are we really close enough to our customers;
- Seek to balance control and collaboration in the ecosystem - not everyone needs to control or create a ecosystem. Sometimes you have to accept you are part of one and the best you can do is seek to influence
- Think about creating win-win-win across the ecosystem to drive change;
- Learn from your experience, codify it and share it; and
- Think about solutions - SKF has created solutions factories where they can work with customers to solve their problems. Using your own ideas and technology collaboratively with the customer is a great way of getting inside their minds and building a deep relationship with them.
One of the great privileges of life as an academic is the opportunity to travel, to experience different countries and cultures. I never fail to be inspired when I go somewhere different and meet someone new. My latest trip to China was no exception.
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Jun 07, 2015 • Features • Alstom • Magazine • Magazine (digital editions) • MAN • resources • Servitization
Click above to get your digital copy of Field Service News issue six now!
Click above to get your digital copy of Field Service News issue six now!Whilst it may seem like we are taking giant leaps forward in field service right now, it's the many small steps that have led us to where we are writes Kris Oldland, in his May/June editorial leader.
One small step, one giant leap.
I sometimes wish I had been around when Neil Armstrong had uttered his immortal phrase. But if I had then perhaps I wouldn’t be reporting on what I truly believe is an equally important part of history.
We truly are living in an age of unprecedented technological advancement. Parallels are drawn with the industrial revolution and whilst some may baulk at such grandiose comparisons, personally I think history will show this to be an age that eclipses the shift from arable to industrial, an age that eclipses the space race, an age where our technology eventually becomes an integral part of who we are and of how we define ourselves as species.
But lets think back on those famous words of the world’s most famous astronaut.
One small step for man, one giant leap for mankind.
As I look through this issue of Field Service News I see so many giant leaps that are the result of many small steps forward. To begin there is my own feature looking at the Field Engineer’s Toolkit of 2020. In this I look at technologies I believe will become common in the not so distant future.
Five years ago each of these technologies would have seemed like the product of some outlandish, futurist fantasy. Yet all of the technologies listed are actually the result of the small steps forward that proceeded them.
Wearables for example are a hot topic right now, but they wouldn’t exist if it weren’t for the smart phone, which in turn wouldn’t have existed if it weren’t for WAP. 3D printing, one of the most exciting and futuristic technologies around, is some forty years in the making. The Internet of Things is now coming of age but medical device company Elekta were shipping their devices with 56K Modems twenty years ago.
Des Evans, Former Chairman of MAN trucks, one of those companies that is often held up as an example of both a disruptive company embracing technology and a manufacturer evolving into a service oriented organisation, sums this up perfectly. “We were an overnight success ten years in the making” he explained when talking about the way MAN reinvented the road logistics sector.
For many years they tried to educate the world as to why they were the number one choice when it came to buying a printer. Then one day they realised their customers didn’t really care about printers. Really all they cared about was printing their documents in a cost effective yet high quality fashion.
Meanwhile, Professor Andy Neely writing for Field Service News for the first time, outlines his recent experiences in China where a number of manufacturing companies are also making giant leaps forward as they try to use service to position themselves as sector leaders. The moral of the story? Those companies that put their customers at the heart of their thinking are going to always come out ahead of the game.
I love the quote from Hewlett Packard for example where they state they are now the largest paper distributor in the world. They used to sell printers and they were focused on what they did and they did it well. For many years they tried to educate the world as to why they were the number one choice when it came to buying a printer. Then one day they realised their customers didn’t really care about printers. Really all they cared about was printing their documents in a cost effective yet high quality fashion.
So they stopped selling printers and started selling the ability to print.
A giant leap? Yes. But one made from very simple small steps.
Another example of small steps and giant leaps in this issue is the story behind IFS. I was lucky enough to be invited to their World Conference a few weeks ago in Boston.
It was a great trip. Not only because the city of Boston is steeped in history. Not only because I watched my newly inherited team the Red Sox win in my first ever baseball match. Not even because I had a beer in the Cheers bar where Ted Danson came to fame, where everybody new my name.
It was a great trip because I got to witness what I honestly think is the true coming of age of a company, who I believe, will be a significant influence in the next few years both in the Field Service industry and beyond.
Whilst the audience was definitely already onside, it was a bit like attending an SNP rally in Glasgow, the fact of the matter is that IFS Applications 9 generated some serious excitement. There is some very cleverly designed functionality and some serious architecture going on underneath (Especially the in-memory stuff that comes later this year) but once again this is one leap forwards that is built on a number of smaller steps.
When I spoke exclusively with IFS Managing Director Paul Massey I asked him to outline the key milestones in his time with the company and as we talked it through I realised that whilst the milestones like their one millionth customer were important, actually it has been a case of steady, well placed steps that has led them to where they are today. But now with the backing of partners like Microsoft and Accenture they are geared up for one more giant leap forward in the near future I feel...
May 01, 2015 • Features • aston university • Events • Servitization
Hosted by Aston Business School and the Aston Centre for Servitization Research and Practice this conference which is being held across the 18th and 19th May 2015 at Aston Business School promises to be a showcase for current, relevant and...
Hosted by Aston Business School and the Aston Centre for Servitization Research and Practice this conference which is being held across the 18th and 19th May 2015 at Aston Business School promises to be a showcase for current, relevant and innovative research in the study of Servitization...
Servitization can protect and enhance business performance, leading to long term growth and sustainability. Over the next 3 years, 65% of manufacturing businesses worldwide will turn towards offering services*. Set against this backdrop the annual Spring Servitization Conference as Aston Business School will showcase current. relevant and innovative research in the study of servitization.
Presentation themes for the conference include:
- Business model innovation for servitization
- Customer interaction and co creation through real time data and social media
- Techniques for the identification of service opportunities and design of services
- Organisational capabilities and environmental conditions required for successful servitization
- Digital technologies as service providers; connected products and the IoT
- Business ecosystems and co opetition for delivery of advanced services
- Implementation of servitization; the challenges, barriers and enablers
- The circular economy and environmental
About the conference:
The Spring Servitization Conference 2015 returns for a third year, attracting a strong international gathering of academics working in the field of servitization research. The organising committee is pleased to announce a record number of research papers have been submitted this year, covering themes such as: business model innovation, the circular economy and environmental sustainability and digital technologies as service enablers.
Who should attend:
This event is targeted at researchers working in the field of servitization, managers and directors from manufacturing companies both large and small, software producers and other technology innovators of all sizes.
Keynote speakers
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Professor Tim Baines, Director, Aston Centre for Servitization Research and Practice. Tim is an international authority on servitization and works extensively with manufacturers to transform their operations to compete through advanced services. He has published over 200 papers on management and engineering, and is amongst the most frequently-cited authors on servitization. His career started with a technician apprenticeship, and has progressed through a variety of industrial and academic positions. Read Tim Baines latest exclusive feature for Field Service News here
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John Cullen, VP Services Marketing, Metso Corporation. John Cullen is VP Services Marketing at Metso Corporation. In this role John is responsible for productizing the service portfolio, transforming the business to value based solution selling as well as communications for this 1 Billion Euro plus mining services business. Previous to working for Metso, John had a long history in business development and sales working for global brands, such as Nokia and O2, as well as having his own successful business development and sales company. John has an Engineering Science degree from St Catherine's College, Oxford University.
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Harman Lanser, Product Development & Logistics Group Component Products for AIRFRANCEKLM Engineering & Maintenance Within his scope is development of new products within the Component Availability area, OEM strategy and Supply Chain Development. Before that Harmen was Director Component Management at KLM Engineering & Maintenance for five years after a period of 6 years in Purchasing at KLM E&M as Director and Vice President Strategic Purchasing. Harmen has an experience of 28 years within Engineering & Maintenance. Since the Air France/KLM merger in 2004 he is one of the key players in the alignment of the procurement and supply chain activities of Air France Industries and KLM E&M. Harmen has his BSc. in Aeronautics and an MBA in E-commerce
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Christian Kowalkowski Associate Professor of Industrial Marketing at Linköping University, Sweden & Assistant Professor of Marketing at Hanken School of Economics, Helsinki. Christian Kowalkowski is His current research interests include servitization, solutions marketing, service innovation, relationship dynamics, and value-creation strategies. Christian has published extensively and serves as an Associate Editor of Journal of Services Marketing and is on the Editorial Board of Industrial Marketing Management, Journal of Business Research, and Journal of Business & Industrial Marketing. Over the years, he has collaborated with companies such as ABB, Electrolux, Linde, Saab Group, Tetra Pak, Toyota Industries, Volvo Group, and Xylem and been invited speaker at research seminars, associations and practitioner-oriented conferences across Europe.
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Michael J. Provost MA (Cantab) PhD CEng FIMechE FIET MIAM Engineering Fellow, Asset Management and Business Intelligence Services at Intelligent Energy Ltd. Before t joining Loughborough, Michael spent twenty-seven years at Rolls-Royce, two years at a Rolls-Royce spin-off company, Data Systems & Solutions (working on applications of aerospace asset management techniques in other industries) and five years at Bombardier Transportation. He is currently advising on the development and roll-out of a range of asset management techniques across Intelligent Energy Ltd.'s automotive, consumer electronics and distributed power product lines.
The Venue:
Conference Aston, Aston Business School, Birmingham, UK, B4 7ET
Contacts:
Further details can be found at www.aston.ac.uk/ssc2015
Telephone: Jill Forrest +44 (0) 121 204 3249
Twitter @_servitization
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May 01, 2015 • Features • aston university • Future of FIeld Service • Servitization • tim baines
The world of manufacturing is getting ready for one of the most significant changes since the industrial revolution. Servitization is coming and amongst those leading the charge is Professor Tim Baines of Aston University. We're pleased to welcome...
The world of manufacturing is getting ready for one of the most significant changes since the industrial revolution. Servitization is coming and amongst those leading the charge is Professor Tim Baines of Aston University. We're pleased to welcome him to the list of field service news columnists and here in this first article he gives us an introduction to this complex yet fascinating and important topic...
The world once seemed simple; manufacturers made things and services companies did things for us. Today, increasing numbers of manufacturers compete through a portfolio of integrated products and services.
This is a services-led competitive strategy, and the process through which it is achieved is commonly referred to as servitization. Celebrated exponents of such strategies include Rolls-Royce, Xerox and Alstom; all offer extended maintenance, repair and overhaul contracts where revenue generation is linked directly to asset availability, reliability and performance.
Servitization is much more than simply adding services to existing products within a few large multi-national companies. It’s about viewing the manufacturer as a service provider that sets out to improve the processes of its customers through a business model, rather than product-based, innovation. The manufacturer exploits its design and production competencies to deliver improvements in efficiency and effectiveness to the customer.
Manufacturers have traditionally focused their efforts on product innovation and cost reduction. Companies such as Porsche and Ferrari are celebrated for bringing new and exciting designs into the market, while companies such as Toyota are held in awe for their work with Lean production systems. These successes foster a perception that the only way for manufacturing to underpin competitiveness is through new materials and technologies, faster and more reliable automation, machining with more precision, waste reduction programmes, smoother flow of parts etc.
Competition through services
Services offer a third way to compete. This is not an ‘instead of’ or ‘easy option’ for companies that are struggling to succeed. Indeed, delivering advanced services can require technologies and practices that are every bit as demanding as those in production. Neither do they require the manufacturer to abandon its technology strengths; instead it can build on these to help to ensure long term and sustained benefits. Consequently, there is a growing realisation that such services hold high value potential.
Conventional manufacturers can struggle to appreciate the value of services, seeking such simple explanations of servitization that they fail to appreciate potential benefits.
Servitization is a similar paradigm shift. The word ‘service’ can be used in different ways. It can refer to how well an action is performed – “that was good service” – or to an activity, like maintenance, spare parts provision and so on. Servitization relates to this second interpretation; activities that a manufacturer can perform to complement its products.
All manufacturers offer services to some extent, but some establish market differentiation through these, following services-led competitive strategies. Servitization is a term given to a transformation. It is about manufacturers increasingly offering services integrated with their products. Of these, some manufacturers choose to servitize by offering an extensive portfolio of relatively conventional services, while some move almost entirely into services, largely independent of their products, by providing offerings like general consulting. Others move to deliver advanced services.
Advanced services are core to servitization. Xerox’s ‘Managed Print Services’ is one example; rather than simply selling equipment, the company offers ‘document solutions’ to customers. For a typical customer, such as BA, Xerox provides project management, implementation of new technology, and management of third parties.
There are various types of advanced services, and a variety of terms is used across industry to describe these (e.g. availability contracting, performance contracting, managed services, solutions). However the outcome of these contracts is, invariably, a capability for a customer to perform a business function or process.
This is distinct from conventional services where the outcome is product ownership and maintenance of an asset’s condition. Particular contracting features are often coupled to advanced services.
There are four key features; the first three of which are relatively widespread: Pay-for-use revenue payment: pay-per click, pay-as-you-go, power-by-the-hour etc. are all terms used to refer to advanced services. For instance, in its contract with Xerox, Islington Borough Council receives a ‘click charge’ each time a document goes through a machine.
MAN Truck and Bus UK has 10,000 vehicles under contract, and expects this to grow by 50% over the next three to five years, to represent £200million of business.
When these features are coupled with the principle of delivering a capability, contracts become sophisticated and demanding. Many existing contracts are relatively large, which is perhaps part of their appeal to OEMs. MAN Truck and Bus UK has 10,000 vehicles under contract, and expects this to grow by 50% over the next three to five years, to represent £200million of business. The Heart of England NHS Foundation Trust’s five-year contract in its pathology laboratory is valued at £20M per year.
Advanced services are however not only for large organisations. They can hold high-value for manufacturers big and small. They can help strengthen relationships, lock-out competitors, and grow revenues and profits and this is why servitization can be a sustainable business model for manufacturers of all sizes.
Want to know more - why not attend the Servitization Spring Conference in May 18th - 19th Click here for more information
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