Manufacturing Executive - November 2008 - (Page 32) Turning Manufacturing into a Service In our latest Dialogue with a thought leader in European manufacturing, Cranfield Innovative Manufacturing Research Centre Director David Stephenson talks about a technology-enabled business philosophy for manufacturing service. h and the U.S., we now compete with the lower-cost, emerging economies. How do we do that? I think the only Q: What is PSS? way is on the basis of high value, rather than A: PSS looks at the cost. To be competitive, move by manufacturers you have to provide from simply being prosomething extra, someducers of manufactured thing nobody else can goods to becoming real provide. So we need to service providers. create high-value prodDavid Stephenson The focus is on Euucts with a range of ropean companies’ adopting new strateservices linked to them. gies of bundling products and services Q: How does that benefit manufacturinto integrated solutions to create more ing companies? sustainable competitive advantage. Manufacturers now need to offer fuller prodA: There are many benefits. Obviously uct packages, or bundles, with customera service approach provides an immefocused combinations of products, diate and important differentiating factor ser vices, suppor t, self-ser vice, and in the marketplace from traditional manknowledge in order to increase the value ufacturing approaches. It also tends to of their core offerings. be more difficult for competitors to imiAn effective PSS approach also retate and so helps lock the user into a quires the integration of multiple discilonger-term relationship. Customer feedplines and functions — for example, ow do you transform a manufacturing enterprise so that it also can be a profitable service company? David Stephenson, director of the Innovative Manufacturing Research Centre (IMRC) at Cranfield University in the United Kingdom, wants to find out. Stephenson tells Manufacturing Executive Executive Editor Paul Tate in an interview that he believes European manufacturing must become more service-driven to compete against low-cost global competition. He leads a groundbreaking IMRC research project, called PSS, exploring the critical connections among products, service, and systems. melding customer insight with engineering design and managing operations and supply chains that produce, deliver, and support the PSS. Clearly that has major implications for the technology that needs to be developed to assist this change in business philosophy. The technology also has an impact on service and the entire business process — so products, service, and technology are all linked together. back and insight can also improve the knowledge a company has about how its products are used. And because services tend to have higher margins than a one-off sale, PSS can provide a stable revenue stream throughout the life of the product. Put these together and PSS clearly gives companies the chance to increase revenues and build closer customer relationships for the future. Q: What are the main elements of the Q: Why the change? Why is service now so important for European manufacturers? PSS programme? A: In the U.K., Europe, A: There are a number of key challenges, so we are exploring what it means to manufacturing in terms of value, design, delivery, and internal structures. First we need to assess the overall value created by PSS, to understand the relationship between value “in use” and product design and development. Ultimately, we aim to create a tool to help companies quantify the value to the customer of a range of maintenance services. Second, we are investigating how a service network will directly affect the initial design stage and how customer knowledge and feedback about product use can be integrated into the PSS design process. Third we need to work out what the impact is for the company internally. What are the differences between production-centric and service-centric strategies, and how can companies configure service networks and provide effective service delivery and support? Finally we aim to define the practical transition paths and the implementation steps for organisations as they move from being a product-centric manufacturer to becoming a successful service organisation. 32 November 2008 Photo courtesy: David Stephenson
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.