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 £300 million UK government initiative to boost manufacturing productivity by 30%. The Manufacturing Made Smarter initiative is dedicated to the innovation of digital technologies in UK manufacturing. 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. A good example of servitisation is Rolls-Royce’s airplane engine programme. 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.
The Baxi Heating Digital Servitisation Demonstrator will be developed by combining advanced services and digital servitisation technologies, including sensors, software and other technologies, often referred to as the ‘internet of things’ (IoT) to create a digital model of Baxi's manufacturing and service business. The customer wouldn’t be just purchasing a boiler, they would be buying a complete ‘comfort’ package, which includes the monitoring, maintenance and servicing of all their heating requirements. Our installer customers would be a vital part of this service.
The digital model will be converted to a neutral digital platform that can be used as a wider, all-industry adaptable servitisation model. It can be transferred between sectors and developed as a bespoke model for individual companies. The model will enable a range of manufacturers to use digital technologies to manage contracts, supply chains, customer contacts and all aspects of their business.
The winning bid was announced at the three day World Servitisation Summit, hosted by the Advanced Services Group. Representatives from companies including Rolls-Royce, Goodyear, Alstom and Tetra Pak joined the virtual event to see presentations, take part in discussions and share their tips on driving business growth and resilience through services as businesses look at recovery options in the post-pandemic economy.
Karen Boswell, newly appointed managing director of Baxi Heating, 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.”