From commodisation to servitisation in manufacturing

From commodisation to servitisation in manufacturing

Microsoft's Colin Masson explains how manufacturers are transforming the way they serve customers

Toby Ingleton |

This article first appeared in the Winter issue of The Record.

How is the manufacturing space evolving?
In the past, manufacturers naturally focused on sales of their products as standalone offerings. Servicing those products was considered a cost centre for those businesses – an expensive, back-end operation required when products failed in the field.

Today, servicing opens the door to better customer outcomes, decreased operational costs and even potential new revenues for manufacturers. As formerly offline tools become connected, and service moves from reactive to predictive, the manufacturing sector is moving towards services as a core business model.

Moving from standalone products to services creates a win-win situation for manufacturing organisations and their customers: organisations can rely on recurring revenue and customers benefit from greater reliability and lower risk. This evolution is known as ‘servitisation’, which covers the bundling of goods, services, support and knowledge.

How is this changing customer service?
Previously, once a product was sold, customers wouldn’t hear from companies except when it was time for an upgrade or replacement. Now, thanks to technologies like the cloud, and rapid, scalable and cost-effective deployment of remote monitoring solutions, products can be constantly connected to advanced analytics and rich dashboards, giving the manufacturer ongoing visibility into performance.

This rise in connected devices is what enables ongoing interaction between customers, assets and service organisations. By tapping into real-time data from products in the field, manufacturers are better equipped to preemptively service equipment before failures occur.

Which technologies are driving this?
Many forward-thinking companies are already using the internet of things, the cloud and advanced analytics to identify and create new service lines. The more they are able to create this contrast between themselves and their competitors, the more of the market they will capture.

What work is Microsoft doing in this space?
Microsoft has customers already seeing transformational results, including Rolls-Royce, an industry leader in the airlines market. Its TotalCare service range is being digitised by collecting and aggregating data on engine health, fuel usage and other data points using Microsoft Azure IoT Suite, and uncovering new insights using Cortana Intelligence Suite. TotalCare allows airlines to pay for the time they were able to fly their planes rather than for repairs. Under TotalCare, Rolls-Royce assumes the risk and responsibility for engine maintenance, providing engine health monitoring, overhauls and other service options.

Microsoft enablement of servitization goes well beyond the remote monitoring of devices, and predictive maintenance algorithms. Learn how you can expand your services and enhance customer relationships with Dynamics 365 for Field Service, and our Azure IoT Connected Field Service capabilities.   


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