Servicizing - WordPress.com€¦ · Business Customers are focused on core capabilities With...
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Dr. Guy Yogev Servicizing compiting by focusing on customer's utility 1
Transcript of Servicizing - WordPress.com€¦ · Business Customers are focused on core capabilities With...
Dr. Guy Yogev
Servicizing compiting by focusing on customer's utility
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Customer Centricity
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Customer Centricity
Culture & Org. Structure Intimacy Personalized Solutions
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Business Customers are
focused on core capabilities
With non-core elements businesses a sourcing for:
Value Goods Solution
Flexibility Fix cost Variable cost
Expertise Technology Knowhow
Cost Purchase TCO
Attention My headache Someone else’s
Products Services4
ם תי
רושי
בח
קול
הת
יוכז
רמ
ם
תירו
שיי ק
שמ
Servicizing Customer Centricity Transformation
Largest manufacture transforming into services companies
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35
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85 Services % of GDP
Developing Countries Developing Countries
We are living in a services world
Developed countries
Developing countries
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Servicizing Case Study
Servitisation, Servicization, Product-Service System
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- services company step by step
The Copier machine company
Digital Printing Business Development
Maintenance , Support, Upgrade, Leasing
The Document Company
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Value Proposition- Expertise
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Value-Value Proposition
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- services company step by step
The Copier machine company
Digital Printing Business Development
Maintenance , Support, Upgrade, Leasing
The Document Company
The Business Processes Company
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Xerox Propels Ready for Real Business Campaign; Adds Michelin
www.youtube.com/watch?v=SLq6k4jSZzs
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- services company step by step
The Copier machine company
Digital Printing Business Development
Maintenance , Support, Upgrade, Leasing
The Document Company
The Business Processes Company
half of our annual revenue
now comes from helping
other companies shed
business process burdens
and focus resources more
on what they do best14
Why Servicizing?
Growth, Margins, Relationship
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Why Servicizing?
Growth: Stimulating product sales by selling additional services
Gaining competitive advantage by differentiation
Setting barriers for competitors’ market entry
Protection against imitation or competitive lead in innovation.
Margins (financial): Increasing capacity utilization
Opening up service markets with superior margins
Avoiding price competition
Protecting against shocks in demand
Relationship: Increasing customer retention: high switching cost and
intimacy
Learning more about customer needs
Speeding up adoption of new technologies
A win-win mode 16
Servicizing Case Stady
Servitisation, Servicization, Product-Service System
35’’-2’42’’
17From drippers (products) to smart irrigation (solutions) to grow more with less (services)
http://www.youtube.com/watch?v=Iv0Hk_nNTY8
- services company step by step
Drippers company
Professional Services Consulting, Integration, Project
management
Managed Services for specific verticals:
Greenhouse, Mining
Expertise
Value18
When Servicizing?
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When Servicizing?
Positive relationship between Servicizing and :
Firm size
Innovation in physical products
Complexity of the main product: technology, operation, system
Challenges and threats in Servicizing:
Financial Investments
Full Solution Knowhow
Pricing, contracting and measuring performance
Establishment of a service culture
Competing with channels partners
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Servicizing Case Study
Servitisation, Servicization, Product-Service System
Case Study
Defense industry A Chemical Management Services
21 http://www.chemicalstrategies.org/pdf/case_studies/raytheon_case_study_full.pdf
Chemical Management ServicesScope of Service
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Chemical Management Costschemical management costs equal to the purchase costs
Chemical Management Costs (Excluding Chemical Purchase Price)
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Value in 5 Years30-40% cost reduction and payback period of 6 months
AfterBefore ItemSubject
-30%Chemical purchase price
96%82%On-time delivery Streamlined Operations /
Improved Service 2 days3-7 daysOrder cycle time
-93%Storage floor space
1 week4 monthsInventory turns
15Accounts payable
043,000# of P.O. per year
-75Full-time employees
-85%Over-purchase waste Reduced Chemical Waste
and Use -71%Paint waste
Reclamation of precious metals Process Efficiency
Improvements Substitution for toxic chemicals
Transportation cost reductions for alcohols and acetone24
Implementation Challenges
Difficulties
The third attempt to implement a CMS
Much skepticism at Raytheon about the potential utility
Cultural bias at Raytheon - “we know best”
Lack of an upper management champion
Union labor was generally opposed to the idea
Merger between Hughes and Raytheon: lack of continuity in program
management, cultural differences between the two legacy companies
Elements for Success
Cost analysis
Initial successes
Support of the new CEO of Raytheon
External pressure for cost reduction
The merger created an atmosphere of change
Competitor who was already engaged in chemical services25
How Servicizing?
Whole product servicesValue creation services
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1. Whole product servicesproduct centric - extracting more utility from the product
Product
Spare parts & disposable
Maintenance & repairs
Support
Training & certifications
Testing & audits
Inventory Mng.
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2. Value creation servicescustomer centric – providing expertise, resources, alliances
Customer
Customization
Consulting
Business development
BOT & Financing
Integration & turnkey projects
Outsourcing & Managed
Services
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Servicizing in this
specific environment
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“Servicizing” within KLA-Tencor Service
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