Developing Life-Cycle Solutions

The seminar titled “Co-creating value-adding solutions” was organized by Fimecc Future Industrial services (FutIS) on 2.6.2015. FutIS is internationally one of the most ambitious research and development initiatives to promote industry transformation based on service competence.

FutIS is organized by the Finnish Metal and Engineering Competence Cluster (Fimecc). SKF and MacGregor  were used to showcase the insights. The session focused on two key areas in developing life-cycle solutions:

  • Understanding business opportunity over the life-cycle
  • Harnessing learning for solutions design

Understanding business opportunity over the life-cycle

The session demonstrated how industrial companies can use insights about their customers’ business logic to identify business opportunities over the life-cycle, and how to use those insights to develop productivity-boosting life-cycle solutions. Understanding the customer starts with initial learning and customer segmentation. Customer segmentation here means the way of allocating company’s customers into clusters pertinent to a specific organization. The purpose of segmenting customers is to come to a decision how to interact with customers in each segment with the aim of boosting the value of each customer to the business.
SKF makes the most of a segmentation approach, based on an initial learning, into separate lifecycle stages. For example, the customers of SKF might be segmented into six lifecycle stages: ownership, routing, fuel management, performance management, upgrading and scraping. Next, solutions are developed based on learning through interaction with customers and customer knowledge.  This demands that the supplier match the offering to the customer’s business logic. Supplier must have a deep insight into how customers can benefit, in terms of productivity enhancements or cost reductions, by leveraging product management and customer process data. In turn, customers provide specific solution-based customer knowledge.

Harnessing learning for solutions design

The session illustrated how companies can use a systematic learning process to boost their solution design. Learning and understanding the customer are central to the life-cycle solution development. Solution design brings together elements from the customer’s business logic and features in the supplier’s value proposition in a way that creates a solution from which parties mutually benefit. Solution design is also co-creative, strategic and negotiated.  In the practice, it stands for the ability to ensure cost-effective and consistent technical solution to the customers. In terms of the life-cycle this would require the ability to fit the supplier’s value proposition into the customer’s value-chain, and to realize how to add value to the customer’s business logic.


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