SLab debates servitization strategies in the Portuguese industry

Martin Spring

The seminar “The Future of Manufacturing” took place on May 28th at Católica Porto Business School. The seminar had the contribution of external guest speaker, Martin Spring, Professor at Lancaster University Management School and Rui Soucasaux Sousa, Professor at Católica Porto Business School and SLab (Service Management Lab) Director. Professionals from several best practice companies in Portugal also attended the seminar.

Martin Spring presented the conclusions and recommendations from a study conducted by the British government on the future of the UK industry. Rui Sousa presented the results of the 6th Edition of the “International Manufacturing Strategy Survey” (IMSS), study under his coordination in Portugal, that aims to identify the best practices in the industrial sector. The database derived from the survey should be a valuable benchmarking tool.

The IMSS project, is the result of the joint coordination of about 45 of the most respected Business Schools and Universities around the World (http://www.manufacturingstrategy.net/). As for 2013 IMSS had the participation of 843 companies from 19 countries, allowing the participant companies to compare themselves with other similar best practice companies both at a national and international level. In Portugal, 34 companies integrated the study, allowing them to compare their performance through the questionnaire results with companies in Europe and other continents and countries.

Several topics from the survey were discussed in the seminar, such as workforce flexibility, the investment in strategic initiatives and R&D, and new product and service knowledge and development.

Rui SousaAlthough Portuguese companies presented high levels of adoption of best practices and seem to be keeping up with their international competitors in several areas, study results show lower levels of adoption of servitization practices (i.e., offering services associated with products sold), when compared to the overall sample. This gap was most evident mainly in the areas of product training, customer support, product upgrade, rental/leasing products and installation services. Additionally, the study showed that only 5% of sales of Portuguese industrial companies come from service activities, compared to 11% on the overall international sample. High value-added servitization practices (e.g., performance-based contracting, product training, product upgrades, and customer support) represent opportunities for competitive differentiation and increased profitability.

SLab, among other areas, studies models to organise and manage service-related activities in manufacturing firms, and provides companies business support in the shift from selling products to selling solutions.