I recently bought a pair of running shoes. It occurred to me that there was a time when I would have simply wandered around the shop to check that they were comfortable and, if they were, I’d have bought them.
Nowadays when I buy running shoes, I’m sold on the technological advancements. I want to see gait analysis to ensure the running shoes will match my style of running and I want to be offered additional products and services to enhance my running.
As customers, we increasingly want more than just the product itself and this change in customer expectations is driving many manufacturers to look to servitisation as their business model of choice.
Servitisation is the process by which manufacturers find new ways to identify and respond to their customers’ needs. By doing so, manufacturers can then create new revenue streams and increase margin and profitability by adding value so that they retain their customers and boost market share.
However, the Barclays 2016 Annual Manufacturing Report found that only 30% of manufacturing businesses are implementing servitization. The main reasons for not pursuing servitisation included a lack of staff, materials and adequate resource. More positively the report also concluded 74% of businesses want to build more productive customer relations and 46% want to increase productivity by expanding their services.
Time will tell if servitisation is the future for manufacturing businesses; it’s obvious manufacturing businesses would like the benefits that servitisation can offer but as of yet most are not in a position to develop to make sure they realise those benefits.
Many will have heard the phrase ‘Internet of Things’ but, equally, many will be wondering what it is and why an increasing number of businesses are embracing this technology.
In the simplest terms the Internet of Things is a network of objects that will interact and talk to each other whilst gathering and sharing data. We have all encountered personal examples (albeit maybe unwittingly) of the Internet of Things in our day to day lives as smart thermostats, toothbrushes and pet finders are all examples.
Many business owners are now looking at this technology to help improve the efficiency, productivity and profitability of their businesses. Unsurprisingly manufacturing businesses are leading the way.
Smart manufacturing creates an environment whereby all information in a manufacturing process can be captured in real-time. It creates automated processes that can work proactively to ensure that disruptions are minimised, efficiencies are maximised and customers’ expectations can be exceeded.
In a world where businesses remain uncertain about the future – uncertainty not helped by concerns over how Brexit will finally play out - early adoption of and investment in the Internet of Things could very well prove to be a smart business decision.
Like our many manufacturing clients, we look forward to seeing how things develop during the next chapter of this exciting story.
For help and advice on how 'Servitisation' could develop your business, contact Richard at email@example.comContact Andrew
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