We take it almost for granted now that devices, from mobile phones to industrial equipment, evolve through software updates long after they are released, in order to meet changing needs. Yet while the software can be customised and updated, the hardware stays the same. Manufacturers continue to sell the same products to all customers for many years. What if not only the software, but also the hardware could be updated, to keep products relevant long after they leave the factory? By combining Servitization with additive manufacturing, this could soon be in reach.
Servitization is the transformation of an organisation from transactional sales to long-term relationships with customers that deliver outcomes. These outcomes are achieved by aligning the incentives of customers, suppliers, and manufacturers around long term, sustainable value creation. Achieving Servitization requires a manufacturer to update its design capabilities and how it develops new products.
New products typically take years to reach market. Designers start by examining previous models, competing products, and alternative technologies to understand what works and what is missing. They listen to what customers say and try to figure out what customers don’t say. They feed technical and market data into design iterations, using drawings, computer models and physical prototypes, before preparing for manufacturing. And then they start to think about the service…
Compare this with software products, created using agile methods. Developers may start by understanding customers, examining how they interact with products, and often drawing on data from customer interactions with previous products. They create prototypes, or minimum viable products, to get continuous feedback. And they prioritise features, even after launch. For example companies as diverse as Microsoft and Fitbit ask customers to suggest new features and vote for which ones to launch next. In short, the product is never finished, the design does not have to be frozen, and the service can come first.
Here is where additive manufacturing (AM – also known as 3D printing, or rapid prototyping) comes in. This is a set of technologies that produce physical objects, in layers, directly from a digital design model. For large volumes of standard parts and products, AM is not useful. Yet the possibility to produce customised and high-value parts, in a few hours, anywhere in the world, with very little waste, means that updates can be launched during the lifetime of the product. Consider a long-term agreement that gives the manufacturer responsibility for maintaining performance and an incentive to improve the outcome delivered. The manufacturer monitors product performance, using data to allow preventive maintenance and, once a year, performs a full service on the product. Now consider using the data to design a new component that would optimise performance, based on this particular customer’s usage patterns, to be installed at the annual service. Since manufacturing typically depends on economies of scale, the cost would traditionally be prohibitive. With AM, however, the benefits could outweigh the costs. Variations in customer usage patterns can mean a customised design for critical components which might reduce energy consumption, prolong product life, or improve output. And if the manufacturer is paid for helping the customer improve output, or reduce downtime, then this could enable a new, more competitive value proposition to be created.
AM offers four key benefits, which can form the basis of an innovative value proposition.
- Designers benefit from the possibilities to make more complex shapes that are harder to make by traditional means. A part that would typically be assembled from components made by 10 to 15 suppliers, is now made in a single part by General Electric – making it 40% lighter and 60% cheaper.
- Since one-offs are possible, products can be made that better meet the individual requirements of customers. For example, Align Technology receives scans from dentists, and produces over 200,000 customised dental braces per day.
- AM can also help make product innovation and servicing faster. While refurbishing aeroplane cabins, Airbus found that printing plastic panels, although more expensive than injection moulding, saved a lot of time – an additional benefit is weight savings, which are critical for applications including aerospace.
- Finally, as COVID has shown, supply chain disruption is always a possibility – lockdowns closed factories, leaving customers waiting months for products. Across the world, AM was used to produce protective equipment for local use, rather than waiting for delayed deliveries. AM allows production to be nearer to the demand, helping to offer a better service.
While many have focused on the implications of AM for logistics, and spare parts in particular, evidence suggests that for spare parts, AM is more costly than storing inventory. The true value of AM comes in the ability to make product design flexible. Manufacturers can keep a step ahead of competitors by evolving their product designs even after production. For customers, this means products can be updated through physical design changes as well as software updates, as new requirements emerge. To make all this possible you need two things: Servitization, to create the incentives for continuous improvement of products in use – and AM, to offer the means.
About the author:
Dr. Ahmad Beltagui is a lecturer at Aston Business School and a member of its research centre The Advanced Services Group. His current research interests include design, innovation and supply chain management, with a particular emphasis on Additive Manufacturing (also known as 3D Printing) and its innovation potential. In this blog he looks at how product manufacturers can adopt the principles of updating and innovating in-use products, that we see much more commonly with software, and how Additive Manufacturing can achieve this, in order to better serve customer needs and support Servitization.