From manufacturer to service provider to the manufacturing industry

Services start shifting center-stage

Traditionally, machine and equipment makers focused on selling the primary product. Classic after sales services were run as a sideline, in fact many companies deemed it no more than a necessary evil. But times have changed. These days the machine engineering industry is looking forward to a healthy hike in sales of up to 35 per cent of total company turnover, fuelled by business rooted in services.

VOLLMER is an international machine engineering company based in Biberach south of Stuttgart. Almost 100 years old, it specializes in tool processing and is the global leader in its field. Vollmer focuses closely on its customers and maximizing product benefits.

These days, many customers perceive product quality as a “given” – not necessarily a key criterion. So companies are often forced to differentiate themselves by offering a comprehensive range of services to match the product itself, tailored to customer needs. This also allows them to demonstrate how well they know the customer. But maintaining close relationships with the customer does sometimes run against the grain of maximizing service efficiency. This was the challenge facing VOLLMER. So Oliver Friz, MBA student at the School of Management and Technology at Steinbeis University Berlin and manager of the VOLLMER subsidiary in Dornhan, took a look at the issue as part of his studies.

The aim of Friz’s “VOLLMER Services” project was to show in simple and comprehendible terms, how, and with which methods, the company could make the difficult transition from a manufacturer to a manufacturing service provider. Working with colleagues, Friz mapped out what was coined a “service control loop” (SCL) aimed at solving conflicts in terms of efficiency and effectiveness and providing a template for developing services. The cornerstones of the SCL: the company vision, strategy and overarching goals. The team also pinpointed further potential services, categorized clearly by unit and integrated into the global VOLLMER service and support organization as market-ready products.

A business plan was derived from the service strategy, tying into an environmental analysis, customer classifications, market segmentation and market potential, and forming the basis of the goals defined by the control loop. The work involved in providing the services would be intensive in terms of human resources, so the company’s ability to raise sales would depend on its ability to find the right people. In the meantime, the company has initiated a program to provide people with the right training, offer apprenticeships and recruit new personnel. And Oliver Friz is looking forward to the results of the litmus test: how his project is working in practice.  

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