Manufacturing firms are increasingly moving from product-centric logic to service-centric and digitally enabled solution logic. This shift is commonly discussed as servitization. Recent studies show that servitization is no longer limited to after-sales support, spare parts, maintenance, and repair. It now includes data-driven services, platform-based solutions, predictive maintenance, outcome-based contracts, artificial intelligence-enabled product-service innovation, and ecosystem-based value co-creation. This review synthesizes peer-reviewed work published during the ten-year period 2016-2025. The paper examines three questions: what capabilities enable servitization, what challenges restrict the transition, and how servitization changes manufacturing business models. The review identifies six capability groups: strategic service orientation, digital and data capability, customer co-creation capability, ecosystem orchestration capability, organisational change capability, and sales and value communication capability. It also provides a list of challenges, including the servitization paradox, value-capture difficulty, digital complexity, organisational, and cultural challenges. resistance, lack of sales force alignment, data-governance risk, and poor performance measurement. The paper suggests a framework for an integrated capability challenge-business model. It argues that to achieve success in servitization it is essential that there is alignment between the value proposition, value delivery and value capture. and ecosystem governance. The paper adds to the literature by summarizing the last decade of papers. From the practical research perspective, it provides a framework to be followed and a future research agenda for management and operations, Marketing, and innovation research. The authors emphasize that the term servitization is not synonymous with digital servitization, nor is it the same as addressing the product-service system in manufacturing companies. The three key concepts are dynamic capabilities, business model transformation and advanced services...