In today’s hyper-competitive market it can be challenging for manufacturers to differentiate themselves from competitors. One strategic way to stand out from the crowd is by adding services to the product portfolio. And examples of this can be found in almost every industry.
Back in the 1990s, IBM moved from the manufacture of hardware and software to providing services. The company announced it with a famous ad: “We no longer sell computers.” The recent success of cloud computing has affirmed IBM’s logic. Hardware and software is no longer king. Flexible IT power is the next hot commodity, and we’ll be consuming it just like electricity and water.
Now consider the auto industry, where a similar services revolution is happening. Cars are hard to park and expensive to buy and maintain. Seeing a market need, many European cities are offering instant rental car services. You register with a credit card, take a small electric car at a station, drive, and then leave it 30 minutes later at another station. No hassle and your needs are met.
You may think this isn’t applicable to all products. Well, let’s take washing machines: Fred Bellio, Whirpool CIO, explained recently at PlanetPTC Live 2012 how his company integrates intelligence into appliances so that service people can call you and repair it, BEFORE it actually fails. What a value add!
Shifting the focus to services has several benefits for manufacturers: the portfolio is enlarged which improves cross-selling, each product gets better support from installation to end of life, competitive advantage increases, customers are more satisfied and stay loyal to your brand, and your profit margin improves drastically.
Yet to fully capitalize on the business benefits of service, manufacturers need to provide better service than their competition, and this is causing service leaders to think more strategically than ever.
Leading companies are looking at the entire serviceable life of their products to proactively plan for revenue opportunities and improve their service-oriented processes for greater results.
There are key Service Lifecycle Management best practices that can significantly help manufacturers achieve the results they’re looking for. These include maintaining a single source of product-centric service knowledge and delivering the right information at the point of service, as well as analyzing product performance while it’s in use.
Are services part of your portfolio?