Exploring Servitization Readiness in Manufacturing Firms

Abstract

For commoditised and mature markets, where consumer expectations are rapidly changing, manufacturers have increasingly begun to consider services as an integrated part of their offering. The shift from goods production to service provision affects the way offerings are created, exchanged and promoted. Servitization is more than adding services to products; it is a cultural and organisational phenomenon. This thesis is an exploration of servitization readiness within manufacturing firms. It combines two broad concepts: design and readiness for service. Longitudinal design cases were developed with three manufacturing companies who had expressed an interest in growth through the development of services. The selected companies have traditionally been involved in goods production, and have recently started engaging with services in different ways. Barriers and drivers for the transition from product to service were identified within the literature review and used to inform in-depth interviews with the companies. The data was analysed and informed the development of a semi-structured questionnaire to be deployed with the firms for further information gathering. This research was used to develop a readiness framework. The readiness framework is an assessment tool that allows manufacturing companies to understand where they sit in the servitization journey. In doing so, it raises awareness of the nature of change needed for service implementation. The deployment of the readiness framework and companies’ feedback showed that the firms are at different stages in the servitization journey. In discussing the potential of service within the ii organisations, the main barriers in implementation stem from the lack of fully grasping the notion and the benefits of servitization. The readiness framework attempts to bridge previous studies and models offering companies a tool to understand the nature of change needed to undertake servitization. It raises awareness amongst firms that undertaking servitisation is not just about adding services to an existing product offer, but can significantly affect the internal culture, structure and practices.