THINGS+ for Small Companies: The Impact on Business
Globalization is making the world smaller and more cross-connected. The European Union is one or many global players and unfortunately, the speed of development is not as promising as it was in the past. New technologies are opening more doors and the global competition is becoming harsh.
Good 3 years and 1,8 € investment into THINGS+ project brought one of “best cases” inside of Interreg Central Europe funded projects. It focused on manufacturing SMEs eager to gain value in customer's eyes and strengthen their market position using a different strategy than improving their manufacturing capability or product value. We offered them to empower their entrepreneurial skills, make them re-think their business model and put in place service innovation strategies.
As a result, THINGS+ project helped 100+ SMEs which are now regional motors of innovations, proving that improving customer value is possible even without investing into high-priced manufacturing equipment and gear, but rather adopt the servitization methodology that was designed within the THINGS+ project by a consortium of European innovation agencies.
The project started on 1st June 2017, where the lead partner Friuli Innovazione, Research and Technology Transfer Centre from Italy, guided nine consortium members from 9 countries (Italy, Austria, Croatia, Czech Republic, Hungary, Poland, Slovakia, Slovenia, and Germany).
In three years project partners trained more than 220 entrepreneurs, managers, and business innovation experts. All that in more than 100 manufacturing SMEs. When looking at results, there have been more than 90 new service concepts developed, 30+ new commercialized services, and 8 new foreign markets reached as a direct result of the implemented service.
The results of the SMEs servitization pilot projects are collected and described in a e-catalogue of best practices. On one hand, there are 30+ companies coming from traditional manufacturing-related industries, like the casting industry, water treatment industry, 3-D printing, wood processing, machine vision, etc. On the other hand, there were several companies coming from a more diverse types of industries, such as baby products and textile industry, but all reported that the servitization methodology helped them achieve a higher value on the market. By reading the catalogue one can understand by means of real-life up-to-date examples that service innovation might be a powerful strategy for a wide range of industries. Reading the entreprenuers experience can inspire other companies and innovation providers and demonstrate to policy makers how much servitization can push territorial economic growth, even despite pandemic negative consequences.
Indeed, companies from different industries developed new product-based service ideas and prospects to strengthen the relationship with present customers and attract new ones in the domestic market, while at the same time finding a foot on foreign markets.
For example M.G.S. GRUPA Ltd. from Croatia benefited from the methodology. To quote the CEO Edo Seifried:
- “Servitization helped us precisely identify our potential customers and carefully design a service that will increase the safety of the people enjoying our sea, as well as the safety of their valuable property.”
They developed a new service for the nautical and yachting sector, called “Boat Hotel” which is yacht storage designed as a service for installation and maintenance of firefighting equipment and systems for boats and leisure crafts. They included the servitization methodology in their business model and are expecting to see results by the end of 2020.
Company MODULMEC INGRANAGGI Ltd. from Italy, Friuli Venezia Giulia, pointed out, that THINGS+ program:
“Helps us to think about offering additional services that could increase the value offered to our customers and improve our position on the market.”
The company is already known to be very innovative and technologically advanced with producing and selling personalized products in Italy and North Europe. However, through the program of servitization, they developed new solutions which address the problems of their whole industry. Through SIM methodology they implemented customer stock management and IoT devices on high-value gears or critical components of the industrial system. Lowering costs, better customer relationships and crucial market advantage, are the benefits gained by developing own servitization pilot project within the THINGS+ frameworks, claimed the company.
An SME from the baby products industry also participated, with their basic product being sold globally – INNOVAT PRO d.o.o. from Slovenia with their product Sleepy Bottle. In a global high competitive market, their basic product is already highly innovative and the team was very motivated to upgrade their present business model with servitization. As stated by Rok Colarič, CEO:
“Servitization makes our lives easier because we can envision new products more naturally.”
It is interesting how SIM methodology helps a company in lowering the long-term cost of developing new solutions. Every company dealing with product development knows, how risky it is to develop a new product which can fail at the market in the end. INNOVAT PRO developed an idea of developing an accompanying app to their product, through which parents will be able to monitor the care of a newborn. This will bring higher customer satisfaction, customer value on the market, and as already mentioned, data for the company in developing new products.