Digital business models: Oxford Brookes joins new servitization project
As part of a £300 million government initiative to boost manufacturing productivity by 30%, Oxford Brookes University has joined a consortium of industrial and academic experts partnering with Baxi Heating to develop a ‘Digital Servitization Demonstrator’.
Servitization is the strategy of creating value by adding services to products or replacing products with services; which can positively impact productivity.
Changing business model for Baxi Heating
The project, which has secured £1.7 million funding from Innovate UK, will develop a new service-centric model for customers, moving Baxi Heating away from a product-centric model. This involves linking up sensors, software and other technologies to create a digital business model - and will mean customers buy a complete heat as a service package, including monitoring, maintenance and servicing, rather than just purchasing a boiler in isolation.
Often called the ‘internet of things’ this integrated digital model will be converted to a platform which can be adapted to other companies and industries.
Servitization models can help grow business and boost productivity
Tim Vorley, Pro Vice-Chancellor and Dean at Oxford Brookes Business School said: “This project will bring servitization into mainstream UK manufacturing, and brings huge opportunity for other sectors too. It could boost productivity and help facilitate logistics, supply chain and customer contact. We plan to apply the model to a number of different sectors as part of the project; including food, health and technology. The possibilities are extremely exciting.”
Karen Boswell, Managing Director of Baxi Heating, said: “This is just the sort of innovation strategy that UK manufacturers should be looking at if they want to continue to grow their businesses. Customers are demanding much more than products with a maintenance programme now – they want complete peace of mind, a ‘fit and forget’ service, knowing that everything will be taken care of for them."
Dr Cristian Gherhes, Research Fellow at Oxford Brookes Business School is also part of the project team and said: “We are delighted to be part of this project, working with a range of leading academic and industrial partners to explore the transformative potential of digital servitization, and more specifically what this means for the development of business models."
Baxi is working on the project with the other project partners Advanced Services Group at Aston University Business School, University of Exeter, Koolmill Systems (foods),UV Light Technology(health), Tactile Technologies(technology), and the Digital Catapult.