Knowledge Institute Podcasts

Podcast
  • Servitization with Ramachandran S

    September 25, 2021

    Ramachandran S, Lead for Manufacturing and Engineering at the Infosys Knowledge Institute, explains what servitization is, introduces an upcoming book on advanced manufacturing, and describes the "flavors" of servitization that exist in business today.

    Hosted by Jeff Kavanaugh, VP and Head of the Infosys Knowledge Institute.

    “Companies need to invest upfront in the technology, and be ready for a monthly cash flow in case of servitization. ”

    “Digital technologies are a key enabler for servitization, starting from the internet of things to make products connected.”

    “Servitization impacts every stage in the product life cycle from conceptualization of a product to its end of life and environmentally safe ways of handling and disposing of it.”

    - Ramachandran S

Insights

  • Servitization is the bundling a product and necessary services, like support and operation knowledge, into one consolidated offering. It is the equivalent of SaaS or software as a service in the IT world. Instead of developing an application and deploying it on a server, it is consumed as a service on a central cloud. Servitization is the equivalent of SaaS in manufacturing.
  • Asset intensive industries are the early movers in servitization adoption. They have complex, bulky products that are difficult to operate and maintain. Products like aircraft engines, turbines and locomotives. In servitization, the operation and maintenance risk of these products shifts to the equipment maker, who knows the product the best, instead of the customer.
  • Today, almost every major automotive maker has an ongoing program for servitization, or they have tried pilots for specific models in specific US and European cities.
  • Servitization, as a business model, has significant impact on the aftermarket or the post-sale stage. In a traditional sale model, once a car is sold, there is no guarantee of post-sale revenue from the sale of spare parts and services for the original manufacturer. However, servitization ensures that post-sale revenue. It bakes this revenue into the subscription fee that a customer pays. Servitization changes the automotive business from a transactional business to one of ongoing engagement with customers.
  • Servitization impacts every stage of the product lifecycle, from conceptualization of a product to its end of life or environmentally safe handling of waste and disposal. But the biggest impact of servitization on the lifecycle of a product is in the aftermarket segment.
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Show Notes

  • 00:41

    Ram talks about his professional career and background

  • 02:00

    Ram defines servitization in manufacturing

  • 03:16

    Ram talks about an upcoming book on advances in digital manufacturing systems and the chapter that he authored on servitization

  • 04:04

    Ram talks about industries that adopted servitization

  • 05:15

    The auto industry has not been as successful adopting servitization as some other industries, at least not in the large scale, what are the barriers that's holding automotive back?

  • 06:50

    How servitization impacts different stages of a product lifecycle?

  • 08:20

    What are the different flavors or varieties of servitization that you see in business today?

  • 09:10

    How do digital technologies enable the adoption? The servitization?

  • 09:58

    What do you think is the biggest barrier once you get past the technology with process or people or financials?

  • 11:07

    Ram shares recommendations that leaders can do to make servitization successful for their company?

  • 12:10

    Ram says when the book will be ready for release and how people can find a copy

About Ramachandran S

Lead for manufacturing and engineering, Infosys Knowledge Institute

Ramachandran S

Ram is the lead for manufacturing and engineering in the Knowledge Institute. He was an analyst in IDC Manufacturing Insights before Infosys. He is a frequent blogger and speaker on Industry 4.0, servitization, digital transformation and reskilling. Ram is a mechanical engineer with a master’s in production engineering and an executive MBA (PGPEM) from IIM Bangalore.

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