I have often talked about the changing nature of manufacturing and the fusion between “manufacturing” and “services.” For example, I noted in an earlier posting about Rolls Royce selling thrust out of back of a plane, not jet engines and Germany Mittelständler companies selling their knowledge, not machine tools. As part of my description, I have made the point that there will always still be commodity, economy of scale production of standardized things like light bulbs.
Turns out I may be wrong about light bulbs. A story in this weekend’s Washington Post points out the changing nature of the industry – “Companies strive to build a better (more expensive) light bulb”. Federal energy saving regulations are phasing out the old incandescent light bulbs causing companies to invest more in R&D to come up with new products. But some companies are going beyond just the new product:
Philips’ strategy is also about more than just selling light bulbs. The company owns many brands of lighting fixtures and lamps, and it employs teams of designers who consult with big customers on lighting for office buildings, art museums and sports stadiums.
One executive at Philips said that the company looks to Wisconsin-based bathroom fixture maker Kohler for inspiration. “Kohler didn’t sell toilets,” he said. “It sold bathrooms.”
On a side note, here is also an example of innovation forcing regulations — something that often gets lost in the debate (see earlier posting).