Q&A with Charlotte Horobin, Region Director – Midlands & East of England, Make UK
Make UK champions engineering and manufacturing across the UK, giving businesses an opportunity to connect, share, and create opportunities. As Regional Director, Charlotte Horobin works to engage companies and help them thrive through bespoke introductions, providing industry insight, hosting events, facilitating networking, and ensuring their voice is heard on the national stage.
In 2021 Charlotte joined the Advanced Services Group at Aston University as Senior Industrial Fellow. Her manufacturing industry insight and expertise will be a valuable asset and we’ve taken the opportunity to sit down with Charlotte to learn more about what servitization means to her.
Why are you such a strong advocate of servitization?
It is an absolute privilege to be awarded the role of Senior Industrial Fellow. I was very grateful for the recognition of the close working relationship I have developed between Make UK and the Advanced Services Group.
I’ve seen first-hand the huge benefits servitization brings to manufacturers – it has the power to be truly transformative. The work of the Advanced Services Group impacts on every facet of the business, from procurement to design, marketing to technology in production. Unlike other support programmes, it takes a holistic approach and there has never been a better time for businesses to explore advanced services.
Is there enough understanding about what servitization means amongst businesses and how challenging is it to get traditional manufacturers to think beyond products?
Covid has helped manufacturers wake up to the fact that you can’t just rely on selling specific components to specific sectors. You have to be more agile and explore other opportunities. Manufacturers may not be familiar with the term “servitization” but once you explain the concept of adding value by selling services, they are generally very open to the idea. In fact, for many, that initial conversation is a light bulb moment as they recognise just what it can do in opening new avenues.
Exploring advanced services is not a growth strategy many traditional manufacturers are focused on but once they start exploring it, a lot acknowledge that this is something they are already doing to some degree. They are just not marketing the fact or charging for it. It doesn’t take much to make them see the benefits of generating new forms of revenue and getting the most out of what you already have.
When you go out and speak to businesses, what are the indicators that exploring servitization might be good for them?
It is never a good idea to be too reliant on the sale of one particular product to a limited customer base. When I talk to a business where the majority of their order book is coming from a particular sector or indeed from a particular customer base, then servitization is often a good avenue to explore. It lends itself to diversification, helping companies to build resilience and develop new revenue streams.
Can you give any recent examples of members who are embracing advanced services to drive growth?
There are plenty of examples of Make UK members who’ve benefited from working with the Advanced Services Group. Birmingham-based precision component manufacturer AE Aerospace has been very successful adopting a glass factory approach, providing customers with their own machining cells, and developing a business model of ‘machining-by-the-hour. Another Midlands company, Koolmill which is moving on from just selling machines to offering its customers Milling-as-a-Service.
What are the key challenges facing the manufacturing sector at the moment and how can advanced services help address them?
One of the big challenges as I see it is how to embed digitisation within our manufacturing sector and improving connectivity. Embracing technology to deliver advanced services will have far reaching benefits in helping businesses become more innovative and find more effective and efficient ways of operating.
Cash flow is also a big issue for many of our members and if advanced services can open new regular revenue streams, then that could provide a real lifeline. It then makes it easier for them to plan ahead and invest in future growth.
How can these service offerings help boost competitiveness and build resilience on the global stage?
UK manufacturing contributes around 11% of GDP but is responsible for over half of all our exports. Adding value through advanced services will boost our global competitiveness and bring major economic benefits. It is critical that we look beyond cost and compete on added value. Those businesses prepared to invest in new technology, innovations and different business models are then more resilient and able to adapt to changing customer demands and market conditions.
I see servitization as a great enabler, allowing businesses to become more agile and transform their offer. UK manufacturing has an amazing heritage with world class engineers and thinkers. Sadly though, much of the commercialisation has gone overseas. Servitization could be key to helping us address that.
What can be done to influence UK policy on support for firms to embrace servitization?
One of the barriers to businesses adopting servitized business models is access to finance. It is important that the right financial structures are in place to support manufacturers offering advanced services, enabling them to do things like offering alternatives to ownership. For instance, the new capital allowances super deduction only applies to equipment that has been purchased rather than leased. The government needs to be more forward thinking and do more to make these new business models viable.
It would also be a big help if businesses could understand the government’s long-term vision. What are UK policies going to be over the coming years and how will that impact on decision making? The Industrial Strategy has moved onto the Plan for Growth and things keep changes which makes it difficult for manufacturers to plan ahead.
Servitization Live is the business event solely dedicated to servitization and advanced services. Taking place 4-6 October 2021 at the ICC Birmingham and Online, it brings together the global community of leading industry executives and servitization researchers for sharing real servitization strategies and journeys, showcasing the technologies that enable advanced services and presenting the latest research on servitization.
For more information and to register visit: https://www.servitizationlive.com
The three-day event is sponsored by Servitly, Capgemini, Senseye, Allsee Technologies, DEAS+, IFS, Xait CPQ and DLL, and supported by Field Service News.