Kimberly Clavin, executive consultant, Pillar, part of Accenture’s Industry X.0., explains how mobility-as-a-service will provide ample opportunities for product service offerings within the vehicle interior, ahead of her presentation at the Future of Automotive Interiors Conference.
Servitization is the art of creating mutual value by shifting from selling a product to selling an integrated product-service offering, otherwise known as a product service system (PSS). In order to sell a product and derive value in a PSS context, one needs to understand how consumers think and personalize in real-time. Consumers don’t necessarily want a product; they want the outcome the product brings.
Up-front considerations in user experience, revenue models and manufacturing are key to the design and development of a sustainable ‘digital twin’ of the product after the initial sale. As stated in Reinventing the product by Eric Schaefffer, “Digital products that are fully instrumented with sensors, data processing capacity and connectivity, and that are also backed by a digital twin and digital thread, allow multiple streams of data, from feature usage to performance, to be sent back to the product development and engineering teams.”
As a digital twin is connected effectively with the real-world twin, the list of potential use-cases and benefits multiply. Leveraging this continuous relationship allows for consumer insights, behavior and preferences to be gathered. As a result, the product can be improved.
However, the biggest derived value comes when products and services can be developed in a customer and data-centric way, resulting in personalization, and ultimately new ways of product innovation combined with service changes. The consumer is no longer the end of the road in the creation process, but instead, involved in the product creation establishing an environment of co-creation.
In co-creation, the customer and the company discover value together. Making this transformation poses many challenges. Business strategy and value is based on usage and interactions rather than the product itself. A simple analogy of this transformation is visible within the ‘printing’ industry. The traditional product model revolves around consumer purchases of photocopier machines, where the consumer dictates the product selection, orders the maintenance, and ultimately ‘owns’ the machine. However, in the rapidly evolving servitization model, the consumer pays a monthly fee in exchange for the desired outcome – a printed document in hand – and as Xerox’s rental brochure professes, “Get the support you need, when and where you need it.”
In order to achieve this, the printing industry has had a major shift in the design process and company structure. Upfront sustainable service design is now key to the product design – including retrofits and performance add-ons. Sales representatives are replaced by customer relationship managers. Value is generated not just by orders of copier and toner, but by services and the personalized relationship. The result is higher delivered value to the customer with ongoing revenue sources for the company.
Foresight into risk becomes a requirement. PSS contractual agreements must be well managed to account for shared risks, as well as define usage terms and behavior. This is already emerging in the automotive industry. Michelin Effifuel operates its business model not through the selling tires, but by selling fuel reduction. The consumer is reimbursed if the promised fuel reduction target isn’t met. In its contracts, Michelin Effifuel sets boundaries for the driver. The usage of sensors and advanced technologies provide information to Michelin about that driver’s behavior, determining if the customer stayed within contractual agreements.
Mobility as a Service (MaaS) is the future. Key to unlocking the value of MaaS is through optimizing the customer experience, which is readily associated with the automotive interior. In fact, automotive interiors represent a largely untapped and exciting frontier for PSS. It is a means to enable collaborative consumption of both products and services within the automotive interior to create new forms of value, with the potential for pro-environmental outcomes. To start the journey, architecture needs to evolve into strategy.
To accomplish this, the PSS provider needs to create a perpetual loop, in which engineers and designers are able to continuously gain new insights; are able to develop new ways of viewing the product and its possible uses; and are able to leverage digital twins to develop a greater understanding of the customers and interactions within the environment. To achieve this, a new engineering design cycle consisting of an up-front focus on business strategy, user experience and data collection must be adopted.
Don’t miss…
Kimberly Clavin, executive consultant, Pillar, part of Accenture’s Industry X.0, will deliver her presentation ‘Servitization in automotive interiors’ at 9:30am on Day 1 (October 22), at The Future of Automotive Interiors Conference 2019 in Novi, Michigan.