1. Manufacturing services
Making sense of
the servitization
shift
Servitization is a hot topic for manufacturers as they
take on the Industry 4.0 challenge, but once you get
past the hype, what does ‘servitization’ really mean?
James Rickard reports.
Seizing the opportunity
In simple terms, servitization offers the opportunity to
create new business models while building meaningful
and long-lasting customer relationships. Recent well-
publicised examples include John Deere’s ‘Agricultural
Outcomes’ and Rolls-Royce’s ‘Power by the Hour’
business models.
Sensing the change
At the heart of servitization is the convergence of
multiple technologies; presenting a tremendous
opportunity for those that are ready, but a significant
threat to the unprepared. Often, the servitization
business case hinges on the use of sensors embedded
in products. As sensor capability increases and cost
per unit falls, the uptake and variety of variables being
monitored has risen dramatically. The challenge is how
to harness the value of captured data.
This is where discrete and process manufacturers
diverge. Discrete industries typically look to embed
remote operating sensors to increase data gathering
capability aimed at monetising through-life
maintenance, whereas high-volume process industries
tend to opt for ‘tagging’ to increase end consumer
product uptake. This can range from automotive
manufacturers providing ‘tyres as a service’, using data
capture to replace vehicle tyres before the driver knows
they need it, through to FMCG (fast-moving consumer
goods) manufacturers automatically re-stocking
product displays based on predictive demand.
To the cloud
Such data capture/analysis is all part of the IoT
(Internet of Things) with sensor data typically
communicated directly to the cloud – vastly increasing
the scope of data capture and the speed of processing.
This means that processes
such as service management
notifications or inventory
updates can now be triggered
in near real time, improving
manufacturers agility and
ability to deliver.
Platforms not databases
Thesecloudtechnologies
arefastdevelopingand
transformingfromold-school
databasestoPaaS(Platformas
aService)solutions.IoTPaaS
systemscanperformvaluable
servicesthatmanufacturers
canuseforpredictiveanalytics,
tokenisedsecurity,mobility
andgamifiction,ontheir
journeytoservice-based
businessmodels,whichinturn
createvaluableservicesand
alternativerevenuestreams.
Beyond the theory
Alongside industry-leading
partners, Atos has perfected a
raft of standardised processes
that, when coupled with
worldwide access to system
data enable manufacturers to
successfully make the move
to servitization.
For example, a world-
leading tyre manufacturer
has selected Atos to assist
with the transformation of
their business model from
‘just’ selling tyres to now
selling mileage. In their new
business model, rather than
purchasing tyres themselves,
fleet customers buy a certain
amount of miles per period
and receives a tyre renewal
automatically when needed,
with all equipment and the
entire process managed by
the provider. This helps to
extend revenue flows, make
production and materials
usage more predictable,
increase customer loyalty and
improve customer service.
Thanks to its long-term
presence and considerable
experience in manufacturing,
and being at the forefront of
technological developments
in the sector, Atos helped
their client transform their
business, reduce costs and
inefficiencies while increasing
flexibility to make the move
to servitization a success.
James Rickard
Solution Director, Atos
A T O S 6 0
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