It’s not always easy for a new idea to take flight. No company knows that better than AE Aerospace, a successful manufacturer of precision-machined parts with customers across the aerospace and marine industries. The company’s ambitious new plan? Shifting away from production to become a fully servitized business.
Servitization has been gaining traction among many manufacturers as of late: Rather than simply selling equipment, businesses are aiming to become more actively involved in monitoring and maintaining it. Ultimately, the goal is to offer tailored products and solutions that deliver outcomes customers need and value. The result is better service for those customers and increased revenue for the manufacturer..
But it wasn’t as clear a path for a company like AE Aerospace. “We can’t go and service a product. We can’t guarantee its life particularly, so it was not immediately obvious that servitization fit,” says Peter Bruch, managing director of the small UK-based company.
It took a long time for the realization to take shape, but working with Aston Business School’s Advanced Services Group changed the way Bruch thought about the company and how it could grow. They do, in fact, have more to offer than just components:
“What we actually do is sell our expertise on machines and machine tools that manufacture or metal-cut and make these parts,” Bruch says. “So our IP (intellectual property), if you like, is that we use our skill set on those machines.”
Bruch’s aim is to monetize those skills. For example, he hopes that rather than use existing prototypes to produce components (as they do now), AE Aerospace’s engineers will one day be able to use their know-how to suggest design improvements to customers.
The long-term vision for AE Aerospace is to become a “glass factory,” where customers control their own dedicated cells and have access to machining by the hour. By shifting more—or, in some cases, all—of their production operations over to AE Aerospace, clients would ideally save time and money thanks to less overhead and in-house labor expenses.
But how could Bruch make this grand customer-focused plan a reality? Before servitization could begin in earnest, he knew a considerable amount of groundwork would be required to prepare AE’s equipment and facilities.
Phase one focused on improving efficiency on the factory floor: The company rolled out a robust, automated Capacity Planning and Production Scheduling System to keep closer track of parts, allowing workers to better spot potential bottlenecks and areas of improvement.
Following this streamlining of operations, phase two will involve implementing an intuitive dashboard with real-time production updates. Once this happens, customers will have access to estimated dispatch times and be able to change running orders as they see fit.
In the final phase, customers will be able to run those aforementioned production cells remotely and take advantage of machining-by-the-hour.
Throughout this thoughtful evolution, Bruch plans to loop in clients on what this new model—and the smart technology around it—could mean for their business (and bottom line). “We are trying to attract our customers with a variety of different service ideas so that, hopefully, when the time comes, they will say why wouldn’t we machine-by-the-hour. It will be almost by accident rather than a Big Bang change,” Bruch says.
In the meantime, he realizes he’s only at the beginning of AE Aerospace’s servitization adventure. But that doesn’t mean there’s not plenty to be proud of.
“Servitization is a wonderful goal that we may or may not fully achieve,” he admits. The journey to get there is obviously worthwhile for us—and is improving the business dramatically.” It also happens to serve as high-flying inspiration for other manufacturers looking to upgrade their offerings.