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Mar 27, 2019 • Features • Advanced Services Group • Aston Centre for Servitization Research and Practi • Data Capture • Future of FIeld Service • manufacturing • Monetizing Service • Professor Tim Baines • Servitization • tim baines
Digital technologies, IoT and digitalisation have been big topics in the manufacturing sector. Combined with services, digital seems to be the answer for a multitude of manufacturing questions, if you take the hype at face value.
But for many manufacturers, digital actually raises more questions than it answers, with one particular question at the centre: how to capture the value of digitally-enabled services?
The Advanced Services Group at Aston Business School has recently released a whitepaper on performance advisory services, which aims to cut through the hype and provide clear information and insight into how manufacturers can make the most of digitally-enabled services.
Real business insight
In this whitepaper, we wanted to reflect real business insight and real business challenges. We invited senior executives from a range of manufacturing companies - from multinationals such as GE Power and Siemens to local SMEs – for a structured debate on digitally-enabled services.
The discussion and its outcomes formed the basis of the research for the whitepaper and helped crystallise the three areas that are most important to manufacturers:
1. Performance intelligence and data as a service offering;
2. How to capture value from these services;
3. How to approach the design process to achieve success.
What are performance advisory services?
The process by which a manufacturer transforms it business model to focus on the provision of services, not just the product, is called servitization. Generally, we distinguish three types of services. Base services, such as warranties and spare parts, are standard for many manufacturers and focus on the provision of the product. Intermediate services, such as maintenance, repair and remanufacturing, focus on the condition of the product. Advanced services take a step further and focus on the capability that the product enables.
In this framework, performance advisory services are situated in between intermediate and advanced services. Typically, these are services that utilise digital technologies to monitor and capture data on the product whilst in use by the customer. These insights can include data on performance, condition, operating time and location – valuable intelligence that is offered back to the customer, in order to improve asset management and increase productivity.
Why are they attractive to manufacturers?
Performance advisory services are attractive to manufacturers because they allow the creation and capture of value from digital technologies that are likely in use already. Take the example of a photocopier - with the addition of sensors that monitor paper and toner stocks, it can send alerts when stocks are getting low. This kind of data is valuable to the customer, as it will help improve inventory management and avoid service disruptions or downtime, but it is also valuable to the manufacturer in helping them understand how the product is used, providing data that they can use to re-design products or to develop and offer new services.
Making money from performance advisory services.
Performance advisory services offer the manufacturer the potential to capture value either directly or indirectly and there is a strong business case for either. Whilst charging a fee directly for data or a service provided is compelling, the potential indirect value for the manufacturer should not be underestimated, as it can yield not only greater control and further sales, but also new and innovative offers, as well as improved efficiencies.
"Performance advisory services are situated in between intermediate and advanced services..."
In the photocopier scenario, the data generated could be sold to the customer as a service subscription, thus earning money directly.
Alternatively, the manufacturer could use the data generated for maintenance programmes or pre-emptive toner and paper sales, thus earning money indirectly. In reality, however, direct and indirect value capture are likely to go hand in hand. A prime example of this is equipment manufacturer JCB, whose machines are fitted with technology to alert the customer if the equipment leaves a predefined geographical area.
For the customer, knowing the exact location of the equipment is valuable – as it may have been stolen. But it also greatly improves efficiency for the manufacturer when field technicians are sent out for maintenance work and do not lose time locating the vehicle.
Performance advisory services - just one step on the journey to servitization
Performance advisory services present a compelling business case for manufacturers looking to innovate services through digital technologies, in order to improve growth and business resilience.
With the immediate opportunity to capture value, these digitally-enabled services are a first step for many manufacturers towards more service-led strategies and servitization.
But that is what they are – just one step on the journey to servitization. Manufacturers looking to compete through services should not stop with performance advisory services.
In the environment of a more and more outcome based economy, it is imperative to understand the potential of taking a step further to advanced services and to recognise performance advisory services as a step toward this.
The full whitepaper Performance Advisory Services: A pathway to creating value through digital technologies and servitization by The Advanced Services Group at Aston Business School is available for purchase online here.
The use of powerful mobile data capture devices and software can make a huge difference to delivery companies and their customers, particularly if the devices offer facilities such as image and signature capture. These can be used to...
The use of powerful mobile data capture devices and software can make a huge difference to delivery companies and their customers, particularly if the devices offer facilities such as image and signature capture. These can be used to streamline proof of delivery operations. Leading parcels carrier, XDP,has installed a large number of Motorola devices sourced by Spirit Data Capture Limited, as well as specialist software developed by Spirit. These have already brought benefits of increased accuracy, time and cost savings, and higher customer satisfaction levels.
XDP was formed in 1995 and is the largest privately owned parcels carrier in the UK. It has a network of franchises throughout the UK and Southern Ireland, comprising 80 depots. The company’s IT department provides 24x7 support to all depots and customers, which includes the provision of ‘out of hours’ telephone / remote support.
Over the past three years, XDP has developed and implemented a web-based system (XSYS) for its customers, depots and Head Office. This system now covers all aspects of the company’s day-to-day business operations, providing real-time, centralised information to all levels.
Implementing a solution to improve efficiency:
Some time ago, the IT department conducted a search for suitable hardware to streamline its operations. It contacted independent specialist Spirit Data Capture Limited, which sources, installs and supports both hardware and software for mobile enterprise solutions.
In the early stages, Spirit recommended the MC70 rugged PDA from Symbol. After Symbol was acquired by Motorola,XDP also bought over 200 MC55 rugged PDAs from Spirit. To add to these, XDP is now deploying the Motorola MC65 rugged PDA.
The M65 is the most rugged Enterprise Digital Assistant currently available. It enables mobile workers to have instant access to applications and information from the office. It also enables them to capture and process almost any kind of data whilst in the field, including photos and signatures. It is therefore ideal for delivery companies that need proof of delivery.
Spirit also offered XDP a software solution that complemented the hardware and integrated with the company’s own system. This was particularly useful, as XDP had experienced a number of problems with its existing software, which connected the mobile devices with its back-end system.
Chris Bailey, XDP’s IT Manager, explains: “The changes we’ve made have been largely driven by the commercial benefits involved. We had the confidence to make them because of our relationship with Spirit. The devices that Spirit has recommended have an overall better quality than those of other competitors, and they fit well into the hand. “A major factor in their purchase was the Comprehensive Service Contract provided by Motorola. We use this regularly as it ensures that we can keep all of our devices operable regardless of any damage they sustain in an often tough environment. I’m sure that the overall cost of this optional service would have been far exceeded by any repair bills over the years.”
The devices are used for barcode scanning within the depots to confirm the receipt of freight early in the morning and then later in the day when the drivers collect from local customers. The Motorola units are also used to capture an image for proof of delivery, which is made available to all parties through XSYS. Chris continues: “In the early stages of implementation, the devices were used solely inside a depot, with drivers capturing the proof of delivery information as they returned each afternoon.
Over time, we’ve acquired more devices and issued them to the drivers, who now perform the same operation during their deliveries.
“The Motorola units enable them to provide near-time information online, including the signed proof of delivery. This includes an image of a paper signature, rather than asking a customer to ‘sign on the screen’ - so it is a more accurate record of the signature.”
He adds: “Customers can now get near-time tracking information, particularly the proof of delivery images, which used to take up to 48hrs from delivery. The drivers have also received some benefits, because when they return to the depot they don’t have to enter all of their proofs of delivery onto a computer - they now capture them as they progress through their route during the day.
“Depots which input freight to the network now get far greater visibility of consignments and the administration need is reduced, as customers can see the same information. The depots can highlight areas to follow up and can concentrate their efforts on consignments that need attention.”
Chris concludes: “The Motorola devices have always proved reliable and the service we’ve received from Spirit has always been very professional. We experienced one issue which the operating system, but Spirit helped us with this and liaised with Motorola to identify a solution. Although we’re not making use of all of the other services that Spirit provides, it’s great to know that they are available if we need them. We look forward to any additional benefits that they are able to bring to our business in the future.”
In the first of this two-part series, learn how the Professional Golfers' Association (PGA) deployed the Intermec CN50 and Intermec CK71 rugged mobile computers with the help of Scan Read Technologies to boost data capture capabilities at high...
In the first of this two-part series, learn how the Professional Golfers' Association (PGA) deployed the Intermec CN50 and Intermec CK71 rugged mobile computers with the help of Scan Read Technologies to boost data capture capabilities at high stakes tournaments. As a result, they expect an excess of $3 million in savings by 2016.