The strategic importance of industrial services will increase considerably in Germany. Already in 2008, sales in this sector amounted to EUR 29 billion

• Survey of companies that use external industrial service providers, creating a market model and expert interviews
• Significance of industrial services increasing: Goals are greater production efficiency, flexibility, reliability and quality
• Total market volume for industrial services in Germany is approx. EUR 29 billion (2008) – more than 50% of which are maintenance services
• Growing tendency toward outsourcing: Already today, 32% of the market volume comes from third party service providers
• Trend toward consolidation among service providers

The importance of industrial services when optimizing production processes will continue to increase in the future. The advantages of this for companies are greater efficiency, flexibility, reliability and quality. For its study "Industrial services in Germany – Status quo and future development", Roland Berger Strategy Consultants interviewed decision-makers from companies that use industrial services, simulated a market model and mirrored the lessons with providers of industrial services. The study showed that total market volume will remain stable in the future at around EUR 29 million, but the trend is clearly toward outsourcing. The (surveyed) companies today spend between 3 and 7% of their revenue on industrial services, varying depending on the industry they are active in. The share of these services rendered by external service providers is around one-third (32%) of the total market, with the trend pointing upward. At the same time, the provider landscape for industrial services is characterized by consolidation – through acquisitions, joint ventures, cooperations and new companies.

"In the fields of industrial installation and cleaning, external service providers already take care of about half the order volume in Germany," says Roland Berger Partner Dr. Kai-Stefan Schober. Third-party providers account for about one-third of the maintenance segment, which makes up more than half of the market for industrial services. In the field of production support and internal logistics, this figure lies between 12 and 20%. In all areas, the trend toward third-party providers is on the rise: "Driven by the trend of not having services of this kind taken care of within the company anymore, the market for external industrial services will rise by about 4% per annum," Schober continues. Parallel to this there is also a trend toward consolidation on the service provider market: "We have observed an increase in the strategic activities among the providers in recent years, with the aim of improving their position on the market, for example by buying companies or founding joint ventures to consolidate functionally and regionally."

Quality and reaction times are key when choosing a service provider

The surveyed companies say that crucial criteria when deciding on which industrial services should be bought externally are that these services can be clearly separated from others, that they have a certain distance from the core business and that the quality of the services can be measured easily. When selecting a service provider, the companies consider quality and reaction times to be more important criteria than price, know-how or punctuality. The picture is different when it comes to changing providers: "Although quality is seen as a critical success factor, charging a higher price compared to the competition does have a big effect on the willingness to change providers," says Roland Berger Principal Peter Greppmair. "At the same time, a service providers who does not always meet targets are seldom punished by losing orders." The study also mentions reasons not to change provider. Most important here is fact that the work processes within the partnership are well-rehearsed, followed by the fear of losing know-how and mutual trust in the new relationship.

The efficiency of the entire industrial service process depends on how the costs for these services develop compared to the production output. Active industrial service management can help reduce the costs and improve efficiency levels. Most companies use target-actual comparisons and tools such as benchmarks, cost comparisons, tenders or Kaizen.