Wed, July 06, 2022

business

Move to service creation yet to take hold 

  • Home
  • »
  • business
  • »
  • Move to service creation yet to tak...

IFS RESEARCH reveals that 32 per cent of manufacturers are yet to gain from what the consultancy calls servitisation. 

 
Majority of manufacturing firms now beginning to utilise data-driven insight to drive time-to-innovation, according to global study
 IFS, the global enterprise applications company, announces the manufacturing industry-specific results of its Digital Change Survey. The study concludes that the industry is using a wide range of digital technologies to drive commercial growth as servitisation efforts take hold, but that skills shortages, aversion to change and reluctance to collaborate externally remain key challenges.
 This survey was commissioned by IFS to assess maturity of digital transformation across industries on a global scale. The cross-industry report can be found here. It was conducted as in-depth interviews by the research company Raconteur, who took in the views of 750 decision makers in 16 countries in the oil and gas, aviation, construction and contracting, manufacturing, and service industries. Within manufacturing, 150 respondents participated in the survey. Countries surveyed were USA, Canada, the UK, Sweden, Germany, France, China, Japan, Australia, Norway, Denmark, the Netherlands, Spain, Poland, the Middle East (as a region), and India.
According to the survey shows that the strategic shift from manufacturing products towards creating new services through 'servitisation' is a key factor behind the imperative for digital transformation. 68 per cent of respondents claim that servitisation is either 'well-established and is already paying dividends' or 'in progress and is receiving appropriate executive attention and support'. However almost one in three manufacturing companies are still to derive value from servitisation.
 “The servitisation of the manufacturing sector is being driven partly by competitive pressures, but also from customers who are demanding more and wanting everything faster,” said Antony Bourne, VP of Global Industry Solutions at IFS. “The manufacturers that have not yet adopted a service-centric business model are missing out on revenue streams and new ways to develop their offerings. To be successful in their response to customer needs and increasing demands, manufacturers must compress time to market, taking an idea through from design to a saleable item as quickly as possible. New digital technologies can help with this.”
 Unlike those in other sectors, who view digital change primarily as an efficiency play, manufacturers see it as a key to unlocking commercial growth. Some 37 per cent identified 'accelerating innovation' as a driver for change – more than in any other industry – while competitive differentiation (32 per cent) was also a top five factor. In fact, these two can be seen as almost comparable with more common organisational drivers: ‘internal process efficiencies’ (40 per cent) and ‘cost savings’(33 per cent).
 The manufacturing sector is taking full advantage of a range of new technologies to accelerate growth, with 83 per cent of respondents identifying themselves as ‘enabled’, ‘exploratory’ or ‘enhanced’ and not a single one in the ‘nascent’ stages. North American firms are at the vanguard with 55 per cent identifying as ‘enhanced’ or ‘optimised’; much higher than EMEA (29 per cent) and APAC (21 per cent) respondents.
However, 84 per cent of manufacturers said they think funding is ‘adequate’ or ’advantageous’, the lowest of any sector. Furthermore, 12 per cent described funding as 'excessive', something not seen in any other industry. It is clear that manufacturing firms are not always allocating budget effectively, or getting value for money. 
 
 

Published : November 28, 2017

By :   THE NATION