Key market trends like global competition, access to data and a growing focus on customer experience are driving a movement toward service-based supply-chain models.
However, these models can require changes to business strategy, product design, supply-chain operations and employee training and mindset — all of which can be blamed for slow adoption. Access to data needed to support service models is a significant challenge, too.
Determining which service-based offerings make sense for your company, and how to deliver those offerings, requires clear strategic and product alignment, critical capabilities development and an agile development cycle.
There are three servitization models to consider:
Four Steps to Servitization
By adopting this approach, the supply chain is a full partner to the development process and can help contribute to the success and benefits anticipated with servitization — including increased revenues, better production utilization, lower logistics costs and higher customer responsiveness.
Growing demand from customers for solution-based offerings — and greater access to data required to create them — will drive an increase in servitization business models. Companies looking to adopt will use systematic approaches to align offerings, develop capabilities and test services to successfully bring them to market.
Andy Prinz is managing consultant at PA Consulting.
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