UK manufacturer Baxi Heating has secured funding from Innovate UK to develop a ‘Digital Servitisation Demonstrator’ as part of the Manufacturing Made Smarter initiative.
The award is part of a £300m UK government initiative to boost manufacturing productivity by 30%. Baxi is working on the project with the Advanced Services Group, part of Aston University Business School.
Servitisation is the strategy of creating value by adding services to products or even replacing a product with a service. At a time when customers want to buy a complete service, rather just a commodity, the development of a servitisation business model will become more and more important, it said.
A good example of servitisation was Rolls-Royce’s airplane engine programme, where customers pay a set amount of money based on the number of hours the airplane is flown. In return, Rolls-Royce will repair, replace broken parts, modify and monitor the engine remotely.
Karen Boswell, newly appointed managing director of Baxi Heating, pictured, said: “This is just the sort of innovation strategy that UK manufacturers should be looking at if they want to continue to grow their businesses. Customers are demanding much more than products with a maintenance programme now – they want complete peace of mind, a ‘fit and forget’ service, knowing that everything will be taken care of for them.
“This project could be ground-breaking, not just in manufacturing, but in other sectors too, boosting productivity and facilitating logistics, supply chains and service. We are very excited to be at the leading edge.”