From Chemicals to Clean Gold — Servitising the Mining Supply Chain

Executive Summary

This case study explores how Company X, one of the world's top chemical manufacturers, transformed its business model from selling chemical reagents to mining companies to providing a comprehensive gold delivery service. Facing shrinking margins in a commoditized market, Company X partnered with Xiaoyu Group to leverage our Business Transformation Platform in redefining their role in the mining supply chain. By shifting from product sales to outcome-as-a-service, Company X not only escaped the "red ocean" of price competition but also established itself as a strategic enabler for mining operations globally, achieving over $1 billion in revenue within three years of launching their servitised model.

Problem: Trapped in the Commodity Squeeze

In the competitive world of mining supply, Company X, one of the world's top chemical manufacturers, found itself in an increasingly untenable position:

• It sold chemical reagents to mining companies.
• But as downstream players grew in power and upstream materials became commoditised, Company X's margins shrank.
• They were stuck in a "red ocean", competing on price, and detached from the ultimate value: clean gold.

The real issue wasn't the product—it was the business model. Mining companies didn't want chemicals. They wanted outcomes. They wanted gold—delivered faster, cleaner, and more reliably.

Solution: Servitisation at Supply Chain Scale — Enabled by Xiaoyu Group

With support from Xiaoyu Group's Business Transformation Platform, Company X redefined its identity—not as a chemical supplier, but as a gold delivery service.

"What if we don't sell chemicals at all? What if we deliver clean gold—as a service?"

This bold reframing triggered a full-stack business model transformation, impacting the entire supply chain.

Phase 1: Discovering the True Value Proposition

We helped Company X shift its lens from:

• "What we sell" → "What the client actually values"

Through deep value chain analysis, we uncovered the client's priority wasn't raw input—it was hassle-free, regulatory-compliant gold output. Company X already had the tools:

• Technical expertise
• Laboratory infrastructure
• Chemical logistics
• Site experience

They didn't need to invent a new product—just repackage their capabilities as an outcome-based service.

Phase 2: Building a Servitised Operating Model

Instead of selling chemicals, Company X now:

• Began with on-site consulting at the mine
• Designed custom chemical usage plans per stage of gold recovery
• Managed delivery, scheduling, and inventory logistics
• Coordinated in-house production and local fulfilment
• Took end-to-end responsibility for delivering clean gold outcomes

This was not just service wrapping—it was supply chain servitisation, where every part of the ecosystem was realigned to support a customer-centric outcome.

To support this shift, Company X:

• Acquired key local operators and service partners
• Standardised a network delivery model across regions
• Maintained control over customer experience, while leveraging external execution

Phase 3: Scaling into a Global Service Enterprise

Just three years after launching the servitised model, the results were staggering:

• Revenue exceeded $1 billion
• Expanded operations across Europe, the Middle East, and the United States
• Earned a reputation as the "gold partner" for major mining firms worldwide

What was once a vulnerable commodity player became a blue ocean innovator, delivering high-value outcomes with defensible margins.

Outcome: A Blueprint for Whole-Supply-Chain Reinvention

This transformation is more than a product pivot—it's a reinvention of the role a manufacturer plays in its market.

How Xiaoyu Group Helped

Xiaoyu Group provided the strategic capabilities that made this transformation possible:

Key Learnings

This case study demonstrates the power of servitisation at supply chain scale:

• Value Redefinition: Success comes from understanding what customers truly value, not just what you traditionally sell.
• Capability Leverage: Many manufacturers already possess the capabilities needed for servitisation—they just need to be repackaged and repositioned.
• Supply Chain Orchestration: True servitisation requires coordinating multiple elements of the supply chain to deliver a seamless outcome.
• Margin Defense: Outcome-based services create defensible margins in markets where product commoditization is inevitable.
• Strategic Elevation: Servitisation elevates a supplier from vendor to strategic partner, creating deeper, more valuable client relationships.

"The Golden Lesson: This is not a story about a product upgrade. It's about redefining what you are to your customer. Company X didn't just sell better chemicals—it became a strategic enabler of mining operations. That's the power of servitisation at supply chain scale—when every part of your operation exists to deliver what your customer really wants."— Dr. Sarah Johnson, Chief Strategy Officer, Company X

Long-term Impact

Five years after the initial servitisation transformation, Company X continues to build on its success:

• The company has expanded its servitised model to other mining operations beyond gold, including silver, copper, and rare earth elements.
• Revenue from outcome-based services now accounts for over 75% of the company's total income, compared to 0% before the transformation.
• The company has established innovation centers focused on developing new service offerings that further enhance mining efficiency and sustainability.
• Company X has been recognized with industry awards for its innovative approach to supply chain servitisation.
• The success of this model has inspired similar transformations in adjacent industries, creating a ripple effect of business model innovation.

This case demonstrates how the Business Transformation Platform can help manufacturing businesses escape commoditization by fundamentally redefining their role in the value chain, focusing on outcomes rather than products.