The Advanced Services Group at Aston Business School have secured funding to deliver a 3-year business programme for manufacturing companies in the Boroughs of Dudley, Sandwell, Walsall and the City of Wolverhampton.
Following on from a similar programme in the Greater Birmingham area, companies in the Black Country will benefit from a wealth of experience and support to revamp their business model by adding services to their products, identify new revenue streams and improve their revenues.
This new business support programme with its focus on services and servitization is timely, as across the globe, services are gaining ever more importance and they are here to stay. According to the United Nations between 2005 and 2016, growth in world services exports outpaced goods exports in value terms. This trend in the consumption of services exceeding products has had a profound impact on the way that manufacturing firms do business.
Where in the past manufacturers sold products and service companies provided services, today’s manufacturers increasingly add services to their products, in order to gain the competitive edge. We call this process, whereby a business, usually manufacturing and technology based, innovates its capabilities to compete through services, not just products alone, servitization.
Servitization is gaining traction and certainly becoming more widespread as a business strategy. In 2013, Oxford Economics surveyed almost 400 senior executives from large organisations worldwide, and found that three-quarters of those surveyed anticipated a major shift from competing on the basis of product sales, to services. This is being driven by changing customer demand, reinforced by rapid developments in digital technology such as sensoring and data analytics. These new technologies are making it easier for manufacturers to monitor, analyse, and manage their products in use, thus further driving this trend.
The trend towards and demand for services is not reserved for large multinationals. For SMEs in particular, we see this changing business landscape having a significant impact on business models in supply chains. Yet, many SMEs seem unaware of this significant shift in the market and risk missing out on opportunities for growth.
Our business support offer in the Black Country will help to address this by offering support through in-depth, longitudinal engagement, business model innovation, organisational transformation and new technology adoption.
SMEs will be able to access help to capture untapped value from their customers through the adoption of services-led strategies, as well as support by a community of practice and specialised financial and legal expertise.
We are looking to bring real growth opportunities to the Black Country and build on the success of our Birmingham based programme, the results of which have been impressive: based on financial data provided by the firms, adopting a servitization model led to growth totalling £30 million across the 150 companies.
One company that has benefited from the programme is Nicklin Transit Packaging, manufacturers and suppliers of packaging products. As a result of taking part in the programme its workforce has increased from 80 to 125. Before working with the Advanced Services Group, its core services included bespoke product specification, design and validation, ISPM15 compliance, vendor managed inventory, waste packaging removal, and packaging repair and repatriation.
Danny Harrison, Head of Business Development, says:
“As a business, we have always looked to provide additional services to add value and gain competitive advantage, so this mindset was embedded into our company culture and approach to a certain extent”
Nicklin’s leadership team recognised that as profit margins on products continue to be squeezed, the business needed to broaden its service provision.
Since starting the programme, the company has developed a remote asset monitoring service, providing customers with the capability to monitor their packaging (and packed products) throughout their logistics process in real-time. Nicklin can monitor acceleration in 3 axes to measure and alert to product shock, drop and tilt, monitor relative humidity and temperature, measure moisture content of the packaging and provide real-time global positioning.
“Working with a business school that is a leader in servitization has been hugely beneficial. It has added credibility to our offer in the eyes of our customers and given us direct access to a research team and academics with a wealth of practical knowledge and experience.”
Manufacturing and technology-innovating companies are invited to the launch of the Black Country Advanced Services Growth Programme for SMEs on 22nd May from 2pm – 4pm at Wolverhampton Science Park. Please register for this free event today
This programme is part-funded by the European Regional Development Fund.
Advanced Services Group