Transcript
Page 1: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation

Prof. Dr. Ir. Roland Van Dierdonck

[email protected]

Page 2: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation

•WHAT ?

•WHY ?

•HOW ?

Page 3: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

MOST PRODUCTS ARE A BUNDLE OF GOODS and SERVICES

100 % Goode.g. Base chemicals

100 % Servicee.g. consulting

Page 4: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: What?

-Redefinition of the “product offering”: from focus on the “hardcore” to a focus on “solving the problem of the customer”

-From the manufacturing core to the augmented products

-Servitisation is more than adding traditional service elements such as .

Page 5: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Colora: Selling Solutions

-Originally small firm produced paint sold in paint shops and DIY, but could not compete with large multinational companies

-Realized that customers are not just looking for paint; they are looking for help in solving a problem.

-Set up a chain of franchisee operated paint shops

-Sold paints, but employees trained to help:- advice on the best paint for your needs- if needed come to your home to give advise on the spot.

Page 6: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

The augmented The augmented productproduct

Hardware core

Traditional components of customer service:•delivery lead time and reliability•installation•after-sales service•repair•payment arrangements

Service in the broad sense:solution of the customer’s problem

Page 7: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: What

Fourth Stage: beyond manufacturing .

Page 8: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

The augmented The augmented productproduct

Hardware core

Traditional components of customer service:•delivery lead time and reliability•installation•after-sales service•repair•payment arrangements

Service in the broad sense:solution of the customer’s problem

Page 9: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

SERVITISATION

Page 10: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: Why

•Customers are more (service) demanding

•Servitisation helps to differentiate and build up

entry barriers .

Page 11: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven11

A mass customized barbie doll …

My Twinn: Personalized Gifts Including Twin Collectible Dolls

Page 12: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

THANK YOU FOR YOUR ATTENTION

ANY QUESTION ???

OR NOIR

Page 13: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

13

Or Noir

– Imagine that you can create your very OWN chocolate !

– Or Noir™ is a method allowing Artisans to create the taste profile of their dark or milk couvertures, by assembling/blending 2 or more pure Origin couvertures chocolate and/or cocoa liquor.

– Chocolate ‘tailor made’ – Exclusivity for 5 years

Page 14: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

14

Threadless: The Customer is the Company

– Small very successful company in Chicago designing and selling T shirts

– Community of 500.000 customers who may make their own design

– Members of the network submit their ideas and then voted on which ones they liked best.

– Site became a community center where they blogged, chatted about designs, and bought T shirts.

– Company realized high margins,; little/no overstock

– Threadless rethought the relationship with the customer. Customer end up playing a critical roleacross all its operations

– Or Noir™ is a method allowing Artisans to create the taste profile of their dark or milk couvertures, by assembling/blending 2 or more pure Origin couvertures chocolate and/or cocoa liquor.

– Chocolate ‘tailor made’ – Exclusivity for 5 years

Page 15: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Strategy development.

• Setting up a customer information system

• Organizing the service delivery system

• Human resources mgt: -Putting the right skills in place

-Empowerment

• The virtual factory

Page 16: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Strategy development .

– “In many companies services have not been sufficiently integrated into corporate competitive analysis and strategy design. It is seen as a part of the marketing effort and often an unpaid and expensive activity.”

Page 17: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Strategy development.

– Manufacturing competences are worthless if they do not add value to the customer.

– The strategic planning process to be meaningful should be about customers and employees, about external wants and needs, and internal capabilties and skills, and company’s capacity to link the needs of its customers with the capabilities of the employees.

– There is a need for tighter coupling of customer needs and organisational capabilities.

Page 18: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Strategy development.

– Servitisation affects the fundamental strategic questions such as:

• What business are we in?

• What business should we be in?

• What business do we want to be in?

Page 19: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Setting up a customer information system

- Need to know more about customers and be able to act on that information.

- Need to make the service concept explicit

Page 20: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

The service conceptMaking the intangible tangible

A service concept is a blueprint that communicates to employees what service they should give

and to customers what service they should expect to receive.

Van Looy, Gemmel and Van Dierdonck, Services Management: An Integrated Approach, FT Prentice Hall, second edition, 2003

A service concept is the mental picture that is held by customers, employees and shareholders

about the service provided by the organisation

Johnston and Clarck, Service Operations Management,FT Prentice Hall, Pearson Education, Second Edition, 2005.

Page 21: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Organizing the service delivery system

– Enlarged front office: four walls of a factory no longer limit the domain of manufacturing

– Customers participate in the production process

– Manufacturing operators become service providers and customers become part time employees

– Servitisation moves manufacturing firms from an impersonal market to a relational market

– Vertical lines and structures should be replaced by horizontal lines involving customers and suppliers.

Page 22: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: How

• Empowerment

– Should be enhanced so that personnel can make decisions and act in the interest of the customer at the spot

Page 23: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Servitisation: A Cure for All?

Page 24: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

an example for an industrial-resin manufacturer

Price of Product

On-time delivery

Consistence of product perfomance over time

Selection of products

Level of technicalsupport

Frequency of contactwith sales representative

Service-orientedcustomers

Product-orientedcustomers

Price-sensitivecustomersStrong positive

Deviation from average Source: Study mentioned in Forsuth et al., The McKinsey Quarterly, 2000

Handholders

Risk avoiders

Basic needcustomers

Design a portfolio of service products

Page 25: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

2. Design a portfolio of service products

Position service products according to response times and prices

level of service

Standard High

Volume of contracts

Handholders

Risk avoiders

Basic-need

customers

High

Low

Price

Low

High

Source: Bundschuh et al., The McKinsey Quarterly, 2003, number 4, pp.3-13

Page 26: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

Select a coherent model of servitisation to support service

products

Machine Supplier

Solutions Provider

Maintenance Partner

Value Partner

Performance Partner

Parts &Machinery

Operations Process Business

Customer's Purchasing

Customer's Operations

Customer's Process

Customer'sBusiness

Supplier CompetenciesF

oc

us

of C

us

tom

er R

ela

tion

sh

ipMachine Supplier

Solutions Provider

Maintenance Partner

Value Partner

Performance Partner

Parts &Machinery

Operations Process Business

Customer's Purchasing

Customer's Operations

Customer's Process

Customer'sBusiness

Supplier CompetenciesF

oc

us

of C

us

tom

er R

ela

tion

sh

ip

Figure Different models of servitization. (BestServ Feasibiity study 2003)

Page 27: Bbp 2. roland van dierdonck   vlerick leuven gent management school

the Autonomous Management School of Ghent University and Katholieke Universiteit Leuven

After Sales Services

Integrated Services Independent Services

Machine/Part Supplier

System Supplier

Maintenance Partner

Performance Partner

Value Partner

Ser

vice

Con

cept

Delivering a piece/machinery

which fits customer’s technical

requirements (functionality)

Delivering a ‘system’ (e.g.

production line) which is designed (to some extent)

for the specific

customer’s process

Expanding the focus to include

involvement during the

continuing life cycle of the

Machine/System

Expanding the focus to

include involvement within the operating process - Taking

responsibility for the

performance of the

system, i.e. securing

operations.

Supplier takes care of part of

the customer’s business through

operating and maintenance agreements.

Impl

ied

Ser

vice

s Installation &

Start Up Training Warranty

Repair Spare Parts

Project Engineering

Turnkey delivery

Rebuilding & Modernization

Helpdesk, Consultation

Maintenance Contracts – Outsourcing

Spare & Consumable

Contracts Financial Services (Leasing)

Performance Contracts &

Planning

Operational & Maintenance

Responsibility -

Development Partner

From Towards

Standardisation Customisation

Transaction Relationship

Overall Responsibility by Customer

Overall Responsibility

by Provider

Source: Bart Van Looy

Select a coherent model of

servitisation to

support service products

SOLUTION


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