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With Article 50 triggered and Brexit negotiations underway Spencer Earp, Senior Vice President EMEA & APAC for ServiceMax, a GE company asks just how important can field services be for UK PLC...

The last place you would expect to find a microcosm of Britain’s proposed industrial strategy is in a cereal bowl. As iconic breakfast brand Weetabix announced plans to invest £30m to expand its UK manufacturing facilities, its Chinese owner Bright Foods was considering a sale and there are plenty of suitors.

Weetabix is apparently bucking a breakfast trend, growing its market share and creating jobs but it is far from Brexit-proof. Price hikes it says are expected.

Just a week earlier UK Prime Minister Theresa May outlined her proposals for a new industrial strategy for Britain and Weetabix is exhibiting the sort of dynamism May hopes to re-create.

But while it may serve as a valuable example in developing the right conditions for growth, it may prove an exception to the rule.

While UK GDP figures put in a strong finish to a turbulent 2016, the outlook remains uncertain.

This year will be dominated by trading negotiations and a fluctuating pound and we are expected to feel the start of a pricing pinch. The UK, says Business and Energy Secretary Greg Clark at the launch of the Government’s green paper, “must close the gap between the most productive companies, industries, places and people and the rest; and ensure we are one of the most competitive places in the world to start and grow a business.”

 

Easier said than done. The focus will no doubt be on streamlining manufacturing processes, minimising costs, encouraging inward investment and using post-Brexit freedoms to use government subsidies to promote growth, such as targeted tax incentives and increased research and development grants. All good stuff but what can businesses do themselves?

How can the government proposals deliver ideas and strategies that touch all aspects of the supply chain, for example? How can a new business plan for Britain remove cost from the company and yet improve its attractiveness and productivity?

The analogies with the field service industry are startling. Field service has often suffered from under investment or derision. Businesses have regarded service as a cost to the business but this is changing.

New technology is turning everything on its head, with service increasingly seen as a critical business function. Business strategies are evolving along service lines, recognising that affordable sensors, automation and increased mobility are having a profound impact on how products are sold and of course supported. Brand reputations are rising or falling on the back of it and above all service led companies are increasingly profitable and efficient.

A recent report from Vanson Bourne revealed that 86% of execs surveyed said they expect field service to become a primary revenue driver in the next two years. Results from the Technology Services Industry Association (TSIA) Field Service benchmarking study also found that businesses “saw an improvement in renewal rates of up to seven points when field service engineers took the initiative to drive adoption versus engaging only in break/fix maintenance activities.”

In her speech to the World Economic Forum at Davos in January, Theresa May talked about facing up to change, redrawing the international image and making Britain truly internationalist.

The industrial strategy is part of this new thinking, but turning words into tangible actions will demand a cultural shift within organisations if the manufacturing sector is to be competitive and profitable.

 

It demands an automated, end-to-end field service management plan, one that empowers field service professionals in the business and recognises the value service can have to an industrial strategy.

Interestingly, GE drives more than 70 percent of its profits from the service business. It’s a strategy that works. Mobility and smart device technology are at the heart of this and something that will only accelerate rapidly with the advent of 5G networks.

In its Emerging Trends in Mobility report, the TSIA claimed that the rapid development of video conferencing, mobile knowledge management applications and wearables is rapidly creating an even greater positive impact on the service industry and business profitability.

It’s like a perfect storm and one that could and should carry UK manufacturing forward. It is this understanding of how the latest cloud-based technologies can underpin an industrial strategy that can help to drive differentiation and efficiency.

Not all manufacturers can do a Weetabix, but they can embrace ‘servitisation’. The industrialists and thinkers of Whitehall would do well to take note.

 

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