The paradigm of servitization in mill roll maker

The competition in Chinese manufacture has intensified in recent years, partly due to the economic transition and the international competitiveness improvement. To cope with this challenge, it is important for Chinese manufacture to provide service provision which is conceptualized as servitization. The servitization of manufacture is responded by innovating and creating products and services that meet customers´ needs. This paper provide a perspective on the nature of service infusion in manufacturing companies based on a case analysis in the context of a solution for Sinosteel Xingtai Machinery & Mill Roll Co., Ltd. A new paradigm of servitization that has the potential to minimize the price competition of mill roll industry is emerging. The mill roll maker has implemented the new servitization paradigm called “function pricing” which realized the transformation for service supplier. The servitization of the mill roll maker shows the innovation capabilities of the transition from selling products to selling integrated products and services. This case presents that the company with significant manufacturing capabilities possesses the advantage of integration between manufacturing and service. The main finding is that the successful servitization of manufacturing requires advanced technology, human resources and organization layouts, in order to get economic benefits. The mill roll maker benefits for the innovation, encouraging the optimum development of the enterprise. Therefore, the transformation of manufacturing is a concept of significant potential value, providing routes for them to exploit higher value business activities.