The prevailing mindset among manufacturing business leaders is they are designers and producers of tangible products rather than providers of integrated solutions that meet customers' overall needs. Too often, service operations are viewed as ancillary businesses—separate from, and by no means equal to, the "core" product business. That mindset is as risky as it is outdated.

Our research shows that there is an unmistakable migration toward service offerings—a shift sparked by the rapid commoditization of products and by the growth in the number of customer "touch points" over the lifetime of a manufactured product. This shift is as applicable to consumer goods as it is to industrial products—as appropriate for a complex industrial machining center as it is for a vacuum cleaner. Today, the sales transaction is just one touch point on a continuum of potential interactions between producer and customer.

Fundamentally, the basis of competition is shifting toward service excellence—the ability to drive business performance through superior service and parts management. Companies leading this service revolution—we call them service champions—are moving the service business to the boardroom agenda and making service excellence a litmus test for competitiveness. Indeed, with profitability and growth levels on the service side often exceeding those in the main business, it is abundantly clear that the service revolution in global manufacturing is well underway. For most manufacturers, it is now a matter of embracing the service revolution or risk being left behind. Read the full Supply Chain Management Review article in the PDF attachment below.

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