Driving service business growth in manufacturing: insights and strategies

Today, the concept of servitisation is reshaping these models with advancements in mobile, cloud, and computational technologies. However, realising this potential requires a fundamental shift in business models, culture, and infrastructure toward greater customer-centricity and technological integration. These changes are essential to unlock sustained growth in service businesses within manufacturing.

Critical challenges in service business growth

Existing business models in manufacturing are typically product-centric. Transitioning to a service-oriented approach requires value propositions, distribution channels, and partnership changes. The introduction of digitalisation and data-driven services adds complexity.

Manufacturing companies must move away from traditional models like the break-fix approach and experiment with new ways of creating value. Many have yet to notice the impact of digital technologies for too long and now face challenges in adapting to these radical changes.

Integrated servitisation and digitalisation

Integrating product-service systems is pivotal in navigating the complexities of manufacturing service business growth. This holistic approach unifies physical products with services and ensures economic and environmental sustainability throughout the product life cycle. A transparent business model is crucial in this endeavour, requiring manufacturers to align product development with service management. This alignment is supported by enhancing organisational processes, capabilities, and technological infrastructure, thereby fostering more interconnected products and services.

To successfully embrace servitisation and digitalisation, manufacturers should begin by comprehensively understanding their existing assets and installed base. This entails evaluating current capabilities and discerning customer needs, from spare parts provisioning to optimising asset efficiency and maintenance services. Digitalisation is pivotal in these efforts, enhancing service delivery by integrating digital components such as sensors and leveraging IoT for seamless connectivity. These technologies enable manufacturers to gather and analyse data, enhancing visibility, transparency, and predictability across service operations.

Addressing large installed bases

Managing a large installed base can be overwhelming. Manufacturers should focus on assets capable of enabling remote services and conduct feasibility studies to make informed decisions about which assets to include in their service business.

Identifying critical components within product designs can help manufacturers develop proactive service strategies. This approach integrates sensors and data analytics to enhance service offerings and customer value.

Restarting service business growth

Manufacturers must adapt to current times, and customer needs by developing service portfolios focusing on outcomes and performance rather than just selling products. It starts with understanding the market, having strategic goals, and creating a roadmap that aligns with the ambition of delivering integrated product-service systems. By embracing digitalisation and transforming business models, manufacturers can unlock new opportunities and drive sustainable growth in their service businesses.

For a deeper exploration of these strategies and more insights into navigating the evolving manufacturing sector, tune into our Fluido Moments podcast. Discover firsthand discussions with industry experts, practical solutions, and in-depth analyses that can empower your journey towards service business excellence.