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Defining business model in a servitization scenario: a Spanish case study from a manufacturing company International Conference on Business Servitization Bilbao, 13 th November 2014 Izaskun Jiménez- Tecnalia

Servitization Izaskun Jimenez

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3rd International Business Servitization Conference 13-14 November 2014 Bilbao

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Page 1: Servitization Izaskun Jimenez

Defining business

model in a

servitization scenario:

a Spanish case study

from a manufacturing

company

International Conference on

Business ServitizationBilbao, 13th November 2014

Izaskun Jiménez- Tecnalia

Page 2: Servitization Izaskun Jimenez

CONTENTS

1. Background and context

2. MSEE project approach and main assets

3. Case study- Defining a business model in a

servitization scenario

4. Conclusions

Page 3: Servitization Izaskun Jimenez

Background and

context

Page 4: Servitization Izaskun Jimenez

Background and context

Why servitization in the manufacturing domain?� Increased competition from emerging countries� reinvent strategies and re-think value

propositions.

� Other authors mention

• Higher profit margins.

• Delivery of integral solutions.

• Reduce resource consumption.

Why collaborative networks (CNs) in the manufacturing domain?� According to Camarinha-Matos & Afsarmanesh (2006), CNs show a high potential:

• Survival capability

• Innovation needs

• Uncertainty

• Competition

� Complementarity and convergence of competencies.

New ways of value creation� New offerings � consumer-centric services

� Closer customer relationships

� Integration of new business partners

Page 5: Servitization Izaskun Jimenez

MSEE project

approach and

main assets

Page 6: Servitization Izaskun Jimenez

MSEE project overview

Project Full Name: Manufacturing Service Ecosystem

Duration: 36 months

Start date: October 1st 2011

Partnership: 19 partners, 9 countries

Strategic Objective: FP7 FoF-ICT-2011.7.3

Virtual Factories and Enterprises

Total Eligible Cost: € 15,200,000

EC Contribution: € 9,870,000

Industrial partners: Indesit

Bivolino

TPVision

Ibarmia

http://www.msee-ip.eu/

Page 7: Servitization Izaskun Jimenez

MSEE- objectives and scope

VISION: By 2015, novel service-oriented management methodologies and the Future

Internet universal business infrastructure will enable European virtual factories and

enterprises to self-organise in distributed, autonomous, interoperable, non-hierarchical

innovation ecosystems of tangible and intangible manufacturing assets, to be virtually

described, on-the-fly composed and dynamically delivered as a Service, end-to-end

along the globalised value chain.

Collaborative service innovation

Service orientation Business collaboration

Page 8: Servitization Izaskun Jimenez

MSEE- main assets: Business collaboration- Manufacturing Service Ecosystem

1- Definition of ecosystem from MSEE project approach and requirements

A Manufacturing Service Ecosystem is a non-hierarchical form of collaboration where various

different organisations and individuals work together with common or complementary

objectives on new value-added combinations of manufactured products and product-related

services.

2- Definition of Conceptual Model for MSE 3- Methodology for MSE set-up and governance

Page 9: Servitization Izaskun Jimenez

MSEE- main assets: Service strategy and business model

1- Pre-analysis

Implementation of MSE Servitization

Transformation of

company’s strategy and

business model

2- Current strategy and business model

3- Identifying new opportunities for new strategies and

business models

4- New strategy and business model

Page 10: Servitization Izaskun Jimenez

Case study- Defining

a business model in

a servitization

scenario

Page 11: Servitization Izaskun Jimenez

Case study- Ibarmia’s context

� Family company founded in 1949.

� Started its activity producing universal drilling machines� nowadays

manufactures special and customised machine-tools (multitask

machines, 5 axes machining centres and machines for circular

pieces).

� 80 employees and exporting 85% of their production to Germany,

France, China, Brazil, etc.

� Currently 94% of revenues from machine-tool

sales.

� Services offered:

- Phone & e-mail support

- Tele-assistance

- Physical intervention

Growing competition from low-cost manufacturing

countries

Need to differentiate from competitors

Need to reduce warranty costs

Offer new value-added services

Page 12: Servitization Izaskun Jimenez

Case study- Service strategy and environmental influences

1- Ibarmia’s current strategic profile

+ customisation level

+ branding/reputation

+ price

- service quality

- availability/reliability

2- STEEP analysis

Page 13: Servitization Izaskun Jimenez

Case study- Ibarmia’s servitization and collaboration level

Page 14: Servitization Izaskun Jimenez

Case study- Ibarmia’s Intelligent Maintenance Service for machine-tools

Intelligent MaintenaceServices

Machine-tool Maintenance

Ecosystem

Business model innovation New service strategy requires:

� Monitoring Ibarmia’s machines in any part of

the world.

� Integration of IT artefacts in Ibarmia’s

machines.

� Detecting or predicting machine failure.

� Designing value-added services

� Network of highly specialised maintenance

technicians.

Lack of in-house resources and knowledge

Creation of a Machine-tool Maintenance Service

Ecosystem

IT tools allowing monitoring machines

+

Automatically triggering maintenance

operations

+

Appropriate resources and alliances

Intelligent Maintenace

Services

Page 15: Servitization Izaskun Jimenez

Case study- Machine-tool Maintenance Service

Ecosystem

Strategy definition

• Mission definition

• Definition of

ecosystem

objectives

“Machine-tool Maintenance Services ecosystem aims to identify,

design and deploy innovative services related to the

maintenance of machine-tools worldwide”

�Identify new business opportunities related to intelligent maintenance

services for machine-tools.

�Foster the collaboration among the members of the ecosystem to

address such business opportunities.

�Create and deploy worldwide new services able to address customers’

needs.

Page 16: Servitization Izaskun Jimenez

Strategic partner

selection and

recruitment

• Criteria for partner

selection

• Analysis of current

supply chain

• Formalisation and

recruitment of

partners

Case study- Machine-tool Maintenance Service

Ecosystem

Page 17: Servitization Izaskun Jimenez

T/I assets mapping

and virtualisations

• Analysis &

Identification

• Formalization &

Population

• Definition of IPR

rules & Constraints

• Deployment &

Operation

Case study- Machine-tool Maintenance Service

Ecosystem

Page 18: Servitization Izaskun Jimenez

ICT infrastructure

implementation

• Business Process

Management

• Ideation Process

Management Tool

• T/I assets

Repository

• Performance

Indicator

Management

Case study- Machine-tool Maintenance Service

Ecosystem

Page 19: Servitization Izaskun Jimenez

Case study- Business model innovation

Distribution channels

Value proposition Customer relationship Customer segments

Revenue streamsCost structure

Key activitiesKey partners

Key resources

Customisation/Problem solving

Page 20: Servitization Izaskun Jimenez

Conclusions

Page 21: Servitization Izaskun Jimenez

Conclusions

� On-going process, Ibarmia is in the process of further developing and implementing IT solutions and

testing them on machines.

� However, Ibarmia has the necessary information and tools in order to complete and refine the work

carried out.

� Competitive advantage of servitization and of working collaboratively is more evident for Ibarmia

after going through the process described.

� Additionally, the company is now more aware of the implications of having a well-defined and

oriented business model.

� Analysis of the organisational and managerial implications of the new business model is being

developed.

� Organisational changes pose a challenge for the company: integration of new IT solutions in

production process and resources needed to address those transformations in the production

process.

Page 22: Servitization Izaskun Jimenez

Thank you for

your attention!

[email protected]

[email protected]

[email protected]

Stefan Wiesner- [email protected]

Page 23: Servitization Izaskun Jimenez