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Servitization: An Introduction

From product to service - shift your business for added value.

By Shaun West, 20/6/2018

Servitization is a transformation journey - it involves firms (often manufacturing firms) developing the capabilities they need to provide services and solutions that supplement their traditional product offerings and provide new customer value propositions for their customers. Rolls-Royce's 'power-by-the-hour' is one of the best well-known examples, Hilti, Caterpillar and GE are all excellent examples also.

This training course will introduce you to servitization and inspire you to create new product service systems that provide your customers with higher value over the whole operational life of the equipment.

There are three levels of servitization:

1.) Base Services - conventional 'after sales services' both effectively and efficiently.

2.) Intermediate Services - providing a wider range of services that focus on supporting the owner to successfully operate and maintain the equipment they bought (e.g., product repair, condition monitoring, field service and help desk).

3.) Advanced Services - here, risks transfer and the customer outcomes become the focus. Typical examples are pay per use, fleet management, integrated solutions and upgrades.

Systems Engineering helps as it provides a framework allowing us to consider the whole operational life of the equipment or the asset rather than taking the normal manufacturers view of the project life cycle. Part of this is a complete understanding of the total cost of ownership from the owner's perspective. Systems Engineering provides a robust framework and considers the product within the operational environment of the owner. This helps us to understand the critical outcomes of the owner and to build solutions for the owner over the total operational life.

Sales, Product Managers, Field Service Leaders and Service Managers should attend. As part of the course, you will learn how to understand the cradle-to-grave operational life of the equipment and to understand what the owner is trying to achieve with it (and how). These insights will help you to improve existing services, develop new services with higher customer value and to provide product performance feedback to the product development teams.

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