Abstract

We know that UK manufacturers cannot compete on the basis of cost. They have to innovate to add value and survive. For many manufacturing firms this includes service innovation, identifying and offering services that complement and supplement their products. Enabled by technology, a particularly important form of service innovation is service and support, where manufacturers seek to offer extended lifetime support for their products in service. Other services might include financial services, consulting services, design and development services or installation services. In theory adding services offers manufacturers a new way of generating additional revenues and profits. In practice, however, the transition to services is rarely straightforward and recent research points to a services paradox – adding services should result in higher margins, yet it appears difficult to achieve these higher margins. In this presentation Andy Neely, Director of the Cambridge Service Alliance, will discuss global trends in the servitization of manufacturing, the services paradox and the reasons why servitizing might be difficult for manufacturers, as well as offering advice on how to overcome the challenges of servitization.