Servitisation: Preparing the Manufacturing Industry for What’s Next

Servitization is not a particularly new phenomenon. The term was defined in the late 1980s in an article in the European Management Journal1, but the concept of bundling service packages with products to add value goes back to the 1960s and the innovative, ‘power-by-the-hour’2 concept of Bristol Siddeley, a British aero engine manufacturer later acquired by Rolls-Royce. It offered a complete engine and accessory service that enabled operators to forecast service and replacement costs more accurately and eliminated the need for them to purchase stocks of engines and spares. Yet despite being around for 50 years, it’s only relatively recently that servitization has become a talking point, especially in the manufacturing industry.