Use of Professional Services as an Essential Tool In The Manufacturing Industry
Services are used throughout the manufacturing process and the manufacturing value chain. Some services are needed early in the chain e.g. research and development; some are needed at the end e.g. retailing, maintenance and repair; and some are needed at every stage for example telecommunications and financial services. The service production in a manufacturing company is essential for adding value and creating a competitive advantage.
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Many manufacturers have prioritized product quality and efficient business practices over service, especially companies that do not sell goods or services directly to consumers. But with an ever-expanding selection of brands and products available, the growth of social media platforms, and product reviews on nearly every e-Commerce platform, manufacturers no longer rely on the products to speak for themselves.
Changes in the pattern of manufacturers’ use of services are likely to reflect how firms respond to a variety of business and economic factors. Moreover, there are several key drivers that are identified by these manufacturing companies that force them to embrace the use of service.
How essential are services to manufacturing companies?
- Services enable the geographic distribution of global value chains; Better services provision, particularly in ICT, logistics, and financial services, has reduced the trade and coordination costs associated with the greater geographic distribution of global value chains.
As a business owner, with more services components you are likely to strengthen the competitiveness of an entire value chain, including both production and services activities, because more people are able to specialize in certain tasks along the chain and coordination will be more effective.
- Services supported by new technologies help companies to lower costs and improve efficiency; technology enables services to provide direct benefits to producers in terms of improved processes, greater efficiency, and increased customization and customer interaction. ICT services are seen to be central in helping companies develop better products and get these products to market more quickly.
- Services are increasingly part of manufacturers’ product offerings, helping to differentiate and customize goods; In addition to using services in the production process, as a manufacturing firm combining goods with services to differentiate their products from those of other suppliers and to provide a more customized product offering is great step to make. In so doing, you become more appealing to shoppers and you build a stronger relationship with your customers.
- Services Help Customers Purchase and Use Products; integrating your company’s services into the final stages of the manufacturing value chain and facilitating the purchase and consumption of the goods is a great effort you could do as a business owner.
Several findings admit that manufacturers are now combining the sale of their goods with complementary services that enable purchasing firms to source and integrate the goods into their business or help final consumers make their purchases. Examples include financial, transportation, and shipping services.
In order for the above benefits to be seen, leading manufacturing companies create a service value system to carry out a certain task or respond to a particular situation. These are specific combinations of activities and practices each designed for a particular purpose.
The central element of the service system is the service value chain. This is an operating model which outlines the key activities required by a company to respond to demand and facilitate value creation through the making and management of products and services.
The service chain activities are; planning, engaging, designing & transitioning, obtaining & building, delivering & supporting improvement. They represent the steps the organizations take to create value.
- Plan; ensures a shared understanding of the vision, current status, and improvement direction for all products and services across the organization.
- Engage; to provide a good understanding of stakeholder needs, ensure transparency and maintain recurrent engagement and good relationships with all stakeholders
- Design and transition; to ensure that products and services continually meet stakeholder expectations for quality, cost, and time to market.
- Obtain and build; to ensure that service components are available when and where they are needed, and that they meet agreed specifications.
- Deliver and support; to ensure that services are delivered and supported according to agreed specifications and stakeholders’ expectations.
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Improve; for continual improvement of products, services, and practices across all value chain activities and the four dimensions of service management.
By mapping out your company’s value chain and specifically the service value system, you will be better able to assess where true value is created and where improvements should be made.
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