Success factors for achieving high service revenues in manufacturing companies

Abstract

PurposeDespite the proven benefits of an extended service business, most manufacturing companies find it extremely difficult to increase service revenues successfully.Design/methodology/approachAn extensive benchmarking project was conducted with a variety of firms in order to gain a better understanding of success factors aimed at increasing service revenue in manufacturing companies. By reviewing the first benchmarking findings with companies that struggled to achieve a high level of service revenue, additional insight into how service revenue is influenced by the success factors was gained.FindingsThis paper attempts to provide a better understanding of the necessary changes in a firm's activities, organizational structure and culture, and to demonstrate the impact of these factors on service revenue increases.Research limitations/implicationsThe findings have some clear limitations. The main focus was on the German and Swiss machinery equipment manufacturing industries, and remarks are limited to these sectors. However, it is recommended applying the findings to other industry sectors which are confronted with similar problems.Practical implicationsThe analysis and conclusions have significant implications for both researchers and managers. For service management theorists, this paper suggests that increasing service revenue in manufacturing companies is influenced strongly by several factors. All factors seem to be the right triggers for increasing service revenues in the desired manner. Monitoring these success factors and gaining an understanding of their impact, provides some guidance for managers seeking to create strong growth in service revenue.Originality/valueThis paper offers practical help to achieve high service revenues in manufacturing companies.