Manufacturers and their finance partners can exploit an important opportunity for growth by embracing the potential benefits of servitization.
Servitization is the innovation of a manufacturer’s capabilities to compete through services rather than simply products alone, which enhances customer insights and generates long-term loyalty.
The potential benefits to manufacturers and their asset finance partners were analysed during the International Asset Finance Network conference by Tim Baines, professor of operations strategy and executive director, The Advanced Services Group, at Aston Business School,
He said that success in developing this new model depended on nurturing beneficial partnerships, such as with forward-thinking asset finance partners, and maximising opportunities for growth.
“If you are a manufacturer, services represent a real opportunity for growth,” he said.
He pointed to past successes of the model, including the “Power by the Hour” service developed by aircraft engine manufacturer Rolls Royce.
His analysis, taken from a new report called Focusing on Customer Outcomes Through Servitization, included a review of the essential components of the servitization model and how they differ from traditional manufacturing processes, including new approaches to finance.
The report says ‘pay-per-use’ models will generate a significant working capital requirement and create new opportunities for banks and specialist finance companies that have an appetite to take on this opportunity.
A summary of his presentation is available in this exclusive video. You can also learn more by downloading our latest report on servitization here.