2019 was an eye-opening year for manufacturing. Changes – from economic and political to environmental – have impacted the way the world interacts with its resources and technology, and those changes are reverberating throughout the entire manufacturing industry, completely altering the way manufacturing executives operate.
With priorities like sustainability and efficiency at the forefront of technical innovation, manufacturing executives are being forced to reevaluate the way their organizations will be run in the coming decade. But those who want to ensure they strike the right balance between both the optimization of their current business as well as the servitization of their future business need to make sure that they don’t tilt too far in either direction, putting their current performance at risk for the future (or vice versa).
5 Lessons Manufacturing Executives Learned in 2019
As with any major industry transformation, there have been significant challenges to overcome, but tremendous opportunities presented. And, as manufacturing executives rushed to solve the puzzle of how to provide the most value through business models like subscription services and Products as a Service (PaaS) while still turning a profit on new business, they’ve started looking to brands with exceptional after-sales service experiences for guidance. Here are five of the key lessons manufacturing executives learned in 2019:
- Optimized after-sales service is laying the groundwork for business transformation.
- Maximized product uptime and proactive maintenance are becoming major competitive differentiators.
- Sustainability is having a huge impact on manufacturing. Think: the share economy and the circular economy.
- Striking the right balance between service optimization and forward-tilted planning for new business models is an ongoing challenge.
- Navigating service parts pricing during a transition toward selling products as a service is a new frontier to be navigated in the coming decade.
Optimizing traditional service operations in parallel with deploying new business models will undoubtedly complicate manufacturers’ journey to the future. The repair and maintenance of products delivered via manufacturers’ traditional after-sales service operations must be continuously optimized to not only deliver increased value to customers, but also prepare for the inevitable shift from almost exclusively selling new products to instead selling PaaS.
What’s in Store for Manufacturing in 2020
2020 will kick off a watershed decade for manufacturing. Having an optimized after-sales service organization accelerates manufacturers’ journey toward a service-centered future, but also drives top- and bottom-line results, expands the company’s global leadership and accelerates the pace of change within the manufacturing industry as a whole. Servitization is an inevitable future, and manufacturing executives must begin to optimize their businesses now. In fact, we’re predicting these five factors will impact the coming year and decade:
- By 2030, the majority of manufacturers’ business will be centered on delivering PaaS.
- Manufacturers must transform to a subscription-based uptime business model to align with consumer preferences.
- The fear of change will be manufacturers’ biggest barrier to success in the shift to servitization.
- Technology will be the key accelerator of servitization.
- Governments and customers will push for manufacturing to be more environmentally sustainable.
2020 will require manufacturing executives to transform their service business operations to support new PaaS business models. Leading manufacturers have already recognized that accelerating this transformation can only be accomplished if the core of their current service operations – service parts inventory and price management – are fully optimized.
With the momentum behind this overall shift toward servitization, it’s clear that the tides could be turning any day – the question is no longer if it will happen, but when. That’s why it’s crucial for manufacturing executives to start getting their house in order today to prepare for a major change to the foundation of their existing business models. A service-centered revolution is coming, and those who fail to prepare will be the laggards, while the ones who embrace innovation will be leading the pack.
Interested in learning more about how to start your journey toward better after-sales service optimization for your organization? Reach out to us today to speak to an expert about how you can get started with an intelligent solution stack that meets the needs of your business today and will evolve with you into the future.