For several years, the onus has been on end-users to absorb the brunt and costs of regular maintenance and repairs. Resulting from the boom in servitization however, it is now the OEMs that have to take over the responsibility of making sure that equipment is up-and-running as much as possible — bringing about an increased focus on optimizing product uptime and pre-emptively repairing equipment before it ever fails.

 

This has evident upsides, as the OEM is in the best position to safeguard the products are designed and manufactured in the best way to optimize uptime. Unfortunately, this shift also means that OEMs are no longer making money on selling highly expensive spare parts — but rather that the equipment works and deliver its output. This means the whole business logic and incentive structure changes dramatically and will require OEMs to redefine the way they operate.

 

Here are three key things OEMs need to do as they shift to a servitization-centered business model:

 

Invest in workforce training.

Most of the companies have an inclination to gives importance to quick onboarding versus comprehensive workforce training. But, the companies that trade in hurried, one-off onboarding and focus on continuous training and development will have a competitive edge. People are a company’s best asset. Therefore, taking the time to provide good training simply makes sense to help them feel comfortable, thrive and achieve the results that a company is aiming to through this new business model.

 

Bring in far-reaching service technology.

Numerous after-sales service businesses still manage their service parts supply chain efforts through time and labor-intensive processes. In the shift to servitization, however, OEMs needs to take a lot more comprehensive look at their operations and invest in the proper technology that can help them manage the real-time service needs that arise in a servitization-centered world.

 

Always question.

Why are we doing things this way? Are the processes we have in place delivering the results we need? Are they helping us to be in the best position to tackle the problems of tomorrow? These are thoughts that leaders at global OEMs need to be questioning themselves every day. Mainly because a specific method has worked for years, doesn’t automatically mean it’s the right way today – or mainly for the future. It is relevant to always keep thinking critically about what can be done to improve and to empower other team members to question and deliver new, more effective solutions.

 

Servitization brings with it a variety of exciting opportunities, but that does not necessarily mean the transition is easy. Inspite of any apprehension to change, OEMs can begin taking small steps today to lay the foundation for a successful servitization-centric approach, and more importantly, situate their businesses for the next iteration of the manufacturing industry.

 

This article is originally posted on tronserve.com