Lay the technological foundations of its servitization strategy

How can manufacturers be assured that they are properly equipped for successful transformation? Here are the main levers for optimizations needed for a solid foundation for a service-oriented business model.

In a servitization-oriented economy, companies will no longer sell products but will instead assume at least partial responsibility for the commercial results that these products may generate. This new model should encourage companies to develop a subscription-based offer in which the concept of Product-as-a-Service (PaaS) becomes the norm.

As manufacturers adopt this model, they will be more likely to share business risks and redefine their business processes to limit them. However, the complete realization of a service strategy can take between five to fifteen years. Preparing for this profound transformation must be considered a marathon, not a sprint!

The traditional reactive “break-fix” model is progressively evolving towards a proactive model in which assets are repaired before breaking down, thus leading manufacturers to refocus on optimizing product availability. To be successful, they will need to implement new processes, new resources, and deploy new technologies to connect and monitor their assets as well as efficiently collect, analyze, and leverage significant amounts of operational and service data. for example, machine learning or artificial intelligence.

How can manufacturers be assured that they are properly equipped for successful transformation? Here are the main levers for optimizations needed for a solid foundation for a service-oriented business model.

Effective management of spare parts stocks

Today the break-fix service model on which many manufacturers rely can lead to significant wait times for customers due to, for example, low availability of spare parts, high storage costs due to surplus stocks or the obsolescence of parts. It is undeniable that the break-fix model will never completely disappear – there will always be unanticipated failures – but this reactive approach most often creates an overload that negatively affects both the customer experience and the net result of the manufacturer.

To continue, manufacturers need to invest in human capital and technology to fully optimize their parts supply chain. An Excel spreadsheet or traditional ERP system can be useful for managing spare parts in a traditional after-sales service model, but will soon become insufficient to meet customer needs for maximum asset availability and availability. maintenance of manufacturers’ costs at a low level.

Innovative, cloud-based spare parts management solutions integrate easily with existing ERP systems and allow manufacturers to track the status of their parts, eliminate excess or obsolete inventory, and improve asset forecasts. new pieces with the support of powerful algorithms. Using such solutions has become essential to meet customer expectations and to stay one step ahead of its direct competitors or e-commerce sites selling spare parts.

Pricing of spare parts according to their value

It may seem obvious that the sale of spare parts is essential to maximize revenues, profits and demand. But how can manufacturers successfully optimize prices without access to valuable information such as real-time price data from competitors or third parties, latest demand forecasts, inventory levels or manufacturing costs? Unfortunately, too many manufacturers are still relying on simple tools like Excel spreadsheets or other manual methods that offer them only a very low level of analysis and calculation capacity. As competition and customer demand increase, it will be even more complex to optimize prices,

Modern cloud-based spare parts pricing solutions integrate real-time data from multiple sources such as customers, competitors, IoT platforms and any other existing system to define optimal dynamic pricing that guarantees the end customer an excellent customer experience. experience while maximizing revenue, margins and limiting costs. As manufacturers move to a more proactive and connected service model, their pricing needs will change as well. They must therefore invest in these modern and sophisticated pricing solutions with flexible architectures that can easily scale and adapt as needed. In the future, when manufacturers set prices in service and subscription contracts,

Reliable and actionable data

A well-managed, data-driven service organization relies on accurate, reliable, and high-quality data. In a  recent study  by Syncron and WorldWide Business Research, more than 70 percent of manufacturers reported that they were collecting field data from assets with sensors. However, only 25% of OEMs surveyed reported having the tools they needed to effectively analyze this data and exploit it in models based on maximum asset availability.

ERP, DMS or Field Service Management systems are a major component of the technological platform that must be deployed for data management, the effectiveness of any solution being dependent on the quality of the data stored in it. Even the most sophisticated technologies on the market can not produce positive results without an appropriate combination of the right steps to take and the skills of employees to exploit them.

As manufacturers move towards servitization, they need to invest in solutions that not only collect new types of data and analyze them efficiently, but also implement the best processes to capture the right data. The collaborators in charge of the analysis of these data must understand how they will be analyzed and the impact that a good collection process can have on the results. The more built assets are compatible with IoT components, the more data will be available. Acting on this data is the only way to achieve the expected results of an availability-based model; and thus collect the good data, analyze them efficiently with the support of the latest technologies,

In this new era of servitization, the responsibility for ensuring maximum availability of assets is gradually shifting from the end user to the manufacturer. This paradigm shift is forcing manufacturers to find ways to optimize their costs along the value chain, and as a result encourage a complete transformation of their business models, corporate culture, and asset development strategies. Today, manufacturers around the world are at a pivotal moment, and those who are laying the solid foundation for their transformation will be the ones who will be able to adapt and stand out.