Editor’s note: This is the first of three posts covering the five megatrends identified by the Advanced Services Group at the Aston Business School and Noventum Service Management in a recent study about how big changes in our society, politics and environment can present new opportunities to manufacturers of all sizes.

It is widely recognized that manufacturing practices, technologies, and the broader markets manufacturers operate in are going through a period of significant change. Assessing and understanding the implications of these changes can be a challenge as change itself can seem sudden and unpredictable as we peer into the future.

If we look around in society and the world, we can see political, social and environmental changes, which taken together can be described as ‘Megatrends.’ A megatrend is a long-term change that affects governments, societies and economies permanently over a long period.

Our recent research with manufacturers explores how these megatrends provide opportunities for business growth and how it will impact their futures.

In a series of three posts, we will discuss our findings on five key societal megatrends that are having, or will have, significant implications for manufacturers, as well as ways these megatrends provide opportunities for growth for manufacturing companies of all sizes.


Megatrend #1: Value Change

In the consumer world, major social and demographic changes are underway and altering the way customers define value; we are becoming more tech savvy and less wedded to ownership of products, in favor of experiences delivered by service providers operating new business models, like Airbnb.

Consumer habits are changing and expectations of a personalized experience are higher, which means companies must respond to customers faster. This is passed back through the supply chain by B2C customers towards their B2B suppliers and partners. For manufacturers, this means staying alert and being proactive. As Anders Mossberg of Scania Trucks stated in our study, “Talk to your customers’ customers because they are the ones that will drive the trends in the future.”


Manufacturers are recognizing that they need to find new ways of offering value to customers. Their value propositions (or offerings) are changing from a product focus to a service focus, which emphasizes providing the customer with the capability to achieve their business goals, instead of emphasizing product features. They are now competing through a combination of products and services, enabled by technology, tailored to meet the customer’s needs.

As services become more advanced, they change from being focused on the product (base services such as spare parts, and intermediate services such as break-fix) towards being focused on supporting the customer’s key processes through the capability the product enables. Rolls-Royce, for example, sells hours of flight time for its jet engines rather than a more traditional purchase of the engine. These are more sophisticated, higher-value contracts, based on outcomes. They are also higher risk for the manufacturer but with higher potential to create a competitive advantage.

Delivering such advanced service requires fundamental changes in the manufacturer’s operations, relationships, organizational structures and potentially a change in their culture. Denis Bouteille of Fives addressed this in our study by saying, “Talking to the customer, we need people who can really develop the empathy, the listening and the deep understanding.”

Read the full whitepaper on the five megatrends conducted by the Advanced Services Group and Noventum Service Management, and stay tuned for parts two and three where Chris will discuss the other four megatrends.

ABOUT Chris Owen

Avatar photoChris is a Teaching Fellow at Aston Business School. He trained originally as an aerospace manufacturing engineer and held a number of roles in operations and supply chain management, before joining PwC as a senior consultant in operations competency. During his seven years at PwC, he helped clients in Europe and North America with cost reduction, performance improvement, and procurement. Chris joined Aston University Business School in 2011. He has a particular interest in applying the principles of lean and servitization to improve business performance in a wide range of situations.