The rise of Servitisation in manufacturing

By 2050, manufacturing will look a lot different than it does today. Although that’s still years away, we are already seeing changes that will influence the future of the industry. As manufacturing change brings companies closer to their customers, manufacturers that are able to leverage wider skill areas will be those maintaining healthy long-term client relationships.

Full service manufacturing

Servitisation, full service manufacturing and similar trends are now steadily rising to prominence, despite being new practices. Through the influence of operations directors, service directors and support personnel, these activities are quickly accelerating. In fact, 1 in 3 manufacturers now see servitisation as a route to strategic competitive advantage, through means such as:

  • Ongoing innovation
  • Sustainable production processes
  • Supplier and customer interdependencies
  • Lifetime product maintenance
  • Overhaul, repair and recycling for end of life products
  • Help desk
  • Customer specific promotions and support agreements

Innovation through service

A number of manufacturers are turning to new forms of customer service to increase the value of their products, and in doing so many are taking on responsibilities that previously were left to customers. 

By some margin, it’s perceived that the main benefit of servitisation is its effect on customer relationships. 74% of manufacturers said that “closer relationships with customers” was the primary reason for adopting servitisation, with value-add service profitability and improved revenue placing subsequently.

A growing phenomenon

Despite the growth of servitisation, it’s still considered far less important than manufacturing assembly and production, and R&D. In fact, 77% of manufacturers raise the production process as their leading focus, with sales and service a distant second thought (17%).

That doesn’t prove that manufacturers don’t appreciate the potential gains of servitisation. It just shows that for most manufacturers, the most basic elements of manufacturing remain their top priority.

It’s unquestionable that servitisation delivers the potential for growth in the manufacturing industry, thanks to the ability to adopt newer customer facing business models. Despite the fact that it’s very much still in its ascendancy, it’s an exciting space that is set for notable progression in the years to come.

For further information or if you have any questions talk to us now, or visit our dedicated servitisation page.


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