I came across this exceptional diagram that illustrates the evolution of a servitization model. This diagram succinctly demonstrates how a manufacturer who is product focused can evolve their portfolio into an outcome-based model. The authors divide the evolution into three steps:

1. An outcome focused on product provision
2. An outcome focused on maintenance of a product condition
3. An outcome focused on capability delivered through performance of the product

In a market where digital services have become a strong focus, the authors state, “when a product is capable of generating data, which, when properly analyzed, is capable of being the basis on which to build digital services that add value to the customer.”

Servitization continues to be a topic for manufacturing in industry 4.0.

References

Baines, T. S., Lightfoot, H. W., Benedettini, O., & Kay, J. M.: The servitization of manufacturing: A review of literature and reflection on future challenges. Journal of manufacturing technology management, 20(5), 547-567 (2009).

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