Honorary doctor Tim Baines: Servitisation provides competitive advantage

– Production is often standardised and can be moved to where production costs are lowest. That's why Western manufacturing companies should focus on advanced services that will benefit their customers and help them win against the competition, says Professor Tim Baines.

There are three aspects to service outsourcing, says Professor Baines. Firstly, it can mean that manufacturing companies provide services for the products they make. 

Secondly, it can mean that customers no longer own the product but use it as a service. Thirdly, it can imply that a company does not just focus on providing products, but ensures that the customer gets the desired outcomes and benefits.

Baines further differentiates services by levels. At the lowest level are basic services related to the product, such as spare parts. At the middle level are services that ensure that products work, such as maintenance and repair. The third and highest level is advanced services. 

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Baines is a professor at Aston University. He leads the Advanced Services Group and works with both international and local manufacturing companies to understand servitisation in practice and help companies transform.

Marko Kohtamäki, Professor of Strategy at the University of Vaasa, told the seminar about the research of the Strategic Business Development research group he leads. The research group has been working with Professor Tim Baines for several years, including two edited books and the Servitisation Spring Conference 2023 organised by the University of Vaasa. They are currently building joint international projects to help leading European manufacturing companies to servitise their business models particularly from the perspective of digitalisation. 

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