Service Transformation, Top Manufacturers Weigh In

Service is the opportunity for manufacturers to differentiate and grab more market share. The race is on to beat competitors. An important distinction however, is that it’s not a sprint toward an end – it’s a journey of service transformation.

Leading companies, such as Caterpillar, Electrolux, General Motors, Renault, and Phillips Healthcare, are overcoming key service challenges as they advance through well-planned strategies.

Some years ago, Renault—the French car maker with a global footprint—positioned itself as a people-centric company, placing the customer at the heart of its business. To help ensure that customers consistently have the best experience with its products and services, it’s continually evolving the way it delivers information to dealers to improve service repair quality and efficiency.

As the global leader in appliances for households and professional users, Electrolux sells more than 60 million appliances annually in over 150 countries. It comes into contact with 12 million consumers a year – 50 percent of this contact happens in the service organization. Electrolux is leveraging service lifecycle management technology to help ensure customer satisfaction and to provide feedback to product development for continuous improvement.

Focus on the customer is key to any service strategy, but great service strategy extends beyond the customer, positively impacting innovation, competitive advantage, revenue, profitability, and ultimately shareholder value.

In his book “Made to Serve” Aston Business School professor Tim Baines describes a services-led competitive strategy being adopted by manufacturers around the globe called “servitization.” Simply put, it is the delivery of a service component as an added value when providing products.

“Servitization really represents the shift in our ideas about manufacturing,” Baines said at a recent PTC Live Service Exchange event. “We’re all very familiar with the idea that manufacturers produce products. But a lot of the organizations are moving their business model to focusing on their customers, and the experience that their customers are getting out of their products and services. We’re moving into a world where organizations develop products which deliver experiences and we’re selling the experience.”

“It’s really about understanding the consumer and what’s relevant in the here and now,” says Bill McCoy, head of aftermarket and consumer care EMEA at Electrolux. “It’s not about trying to force a future that’s not here yet. It’s about understanding what the need is today, and addressing your service business to cater to that – to bring additional value and to build that relationship with the consumer.”

For manufacturers today, innovation and new opportunity grow out of the service experience. But that isn’t to say that the product itself, its design and quality, is any less important. In order to develop a sound service strategy, your product has to be sound first says Sebastian Samuel, vice president of the after-sales engineering at Renault.

“If you want to innovate in service you have to be very, very strong in your fundamentals,” Samuel says. “If you have product quality problems in the field you don’t want to just look at service. A couple of years ago we worked on our fundamentals: having good cars with good designs with innovations, we started promoting some new services – but you have to have good products.”

Strong emphasis on both product quality and service quality is core to manufacturers achieving true product and service advantage. The most successful service executives are recognizing the need to provide the best customer experience and value possible from both the product and service perspective.

If you missed PTC Live Service Exchange, some of the recorded presentations, including the panel discussion with Electolux and Renault, are now available to watch online.

Where in the service transformation journey is your company?

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