Promoted content: Why ‘as-a-service' models could be a manufacturer’s key to success

cannot happen without experimentation, cross-company collaboration, and dialogue with customers. Industry 4.0 week sponsor Accenture explains. 

As-a-service offerings are already standard in many industries. Take aviation, where aircraft companies don’t always purchase the engines they install outright. Instead, they increasingly opt to ‘rent’ them as-a-service and pay based on miles flown.

These pay-as-you-go models offer the ‘renter’ manageable usage fees (instead of high capital costs) and the flexibility to only pay for what they ‘consume’. What’s more, because renters don’t own the underlying technology, they don’t carry the depreciating goods on their balance sheet, with the manufacturer also responsible for service and repair.

But what’s in it for the manufacturer?

The business case for the rental model

There are two strong arguments for extending as-a-service approaches. First, manufacturers can work more closely with customers, finding new ways to add value or use the products. Second, it makes them more competitive. Most companies are looking to cut costs and make processes more efficient, which risks a race to the bottom if capex remains the only purchase option. A pay-per-use approach offers customers a beneficial pricing and payment structure, making the manufacturer more attractive.