UK-based HVAC solutions provider, Baxi Heating has secured funding from Innovate UK, to develop a Digital Servitization 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%.
Manufacturing Made Smarter
The Manufacturing Made Smarter initiative is dedicated to the innovation of digital technologies in UK manufacturing. Baxi Heating is working on the project with The Advanced Services Group, part of Aston University Business School.
Servitization 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 servitization business model will become more and more important.
A good example of servitization is Rolls-Royce’s airplane engine program. Customers pay a set amount of money, which is based on the number of hours that the airplane is flown. In return, Rolls-Royce will repair, replace broken parts, modify and monitor the engine remotely.
Digital Servitization Demonstrator
The customer wouldn’t just be purchasing a boiler, they would be buying a complete ‘comfort’ package
Baxi Heating's Digital Servitization Demonstrator will be developed by combining advanced services and digital servitization 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 just be purchasing a boiler, they would be buying a complete ‘comfort’ package, which includes the monitoring, maintenance and servicing of all their heating requirements. Baxi Heating’s installer customers would be a vital part of this service.
All-industry adaptable servitization model
The digital model will be converted to a neutral digital platform that can be used as a wider, all-industry adaptable servitization 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, in order to manage contracts, supply chains, customer contacts and all aspects of their business.
World Servitization Summit
The winning bid was announced at the three-day World Servitization Summit (World Servitization Convention), 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 program now, they want complete peace of mind, a ‘fit and forget’ service, knowing that everything will be taken care of for them.”
She adds, “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.”