Data driven servitization for SMEs in manufacturing

Purpose: This paper discusses approaches that are specific for manufacturing SMEs (small and medium-sized enterprises) to leverage data in the servitization process. Advanced services are based on output performance guarantees with complex risk and revenue sharing mechanisms. For this type of services, the ability to manage, process, and analyse data of the installed base is considered essential. Therefore, with the increasing degree of servitization of manufacturing, leveraging data for the development and the provision of services becomes a key asset and represents a key challenge. Design/Methodology/Approach: An SME-specific analysis of these challenges and approaches for developing data-driven services is presented based on a combination of theoretical insights and a case study with several SMEs. The concepts derived from the literature are validated and enhanced with the insights gained from the SMEs in practice. Findings: First, the drivers pushing the SME towards providing output-oriented advanced services are discussed. These drivers are related to the customer needs and the market position of the manufacturer. Second, the data-specific challenges of SMEs in the servitization process are elaborated, which are related to the SME’s position in the value chain as well as to its access to the required skills and resources. Third, approaches for the SMEs to tackle these challenges are presented in order to enable the data-driven servitization process. Originality/Value: This paper provides a new perspective on servitization of manufacturing by a focus on leveraging data and analytics for servitization. The research is relevant in order to address the challenges and solution approaches which are specific for manufacturing SMEs