Last year, in conjunction with our launch of the Servigistics Business Unit, PTC established the Service Executive Advisory Council, a group of senior service leaders dedicated to discussing service transformation strategies, challenges, and opportunities.
I had the privilege to attend the first of this year’s EAC meetings last week in Phoenix, Arizona. EAC members and guests discussed some compelling concepts, three of which stood out to me:
Leslie Paulson, the GM of the Servigistics Business Unit, discussed the life-like nature of free-scale networks, analyzing the similarities between power grids, transportation systems, and other networks. According to Paulson, networks tend to emerge of their own volition.
“When you apply this principle to your network of connected products, you realize that you didn’t plan that network’s composition,” said Paulson. “Sure, you do things to influence it, but it changes every day – you add new products, capabilities, and processes to it as your business needs evolve.”
The main takeaway? The more connections across your network, the more valuable it is to your business. Ian Boulton, Senior Director of FA&D Pre-Sales, touched on this concept in his article about how IoT-connected aircraft will change service supply chains.
Leslie Paulson, General Manager of the PTC Servigistics Business Unit, discusses the science of free-scale networks.
The idea of adding features and capabilities to a product and releasing it to the market is, from Wolfgang Ulaga’s perspective, an anachronistic manufacturing go-to-market strategy. The Co-Executive Director of Arizona State University’s Center for Services Leadership maintained that the most effective way to engage customers is to extend a product’s value through service.
Conventional thinking views service as a necessary evil, but not as a strategy. Recognizing service’s strategic value and developing it is largely based off what Ulaga viewed as “the razor-blade problem.”
“If you add seven blades to a shaving razor, they might increase the product’s value and differentiate it among competing razors, but there may come a point when adding such features may not increase the value of the original product in a monumental way,” Ulaga stated.
Ulaga then discussed two stages within his 12-step process for developing sound service strategies: identifying the business case for service, and pricing aftermarket offerings to ensure profitability. Ulaga plans to expand on this concept during the Service Track Keynote address at LiveWorx 2018.
One company’s service strategy may not be feasible for another. EAC members from Komatsu, Cummins, and Philips Healthcare demonstrated as much during their own presentations.
For example, to Cummins and Komatsu, selling and pricing service parts is a key component of their businesses. But to Philips, parts aren’t profit-drivers. Instead, Philips' goal is to ensure care providers can utilize equipment with zero unplanned or disruptive downtime.
Our client presentations were a key point of focus for the Servigistics team. Such perspectives provided valuable insight into how our software can better help our clients reach their aftermarket service goals.
In addition, PTC will continue to collaborate with researchers to better understand how manufacturers are developing service strategies. You can access our latest insights from IDC on product-service systems below: