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Experts from Accenture, Daimler Trucks North America, Spartan Motors, Carlisle & Company, Bocconi University and Syncron share strategies to succeed in the years ahead...

To help manufacturers navigate one of the most transformative times in history, Syncron^TM, a provider of cloud-based after-sales service solutions focused on empowering the world’s leading manufacturers to maximise product uptime and deliver exceptional customer experiences, today published “2019 After-sales Service Predictions: Powering the Journey to Servitization Through Maximized Product Uptime.” Service experts from Accenture, Daimler Trucks North America, Spartan Motors, Carlisle & Company, Bocconi University and Syncron shared insights on the time, resources and technology manufacturers will need to win in 2019 and beyond. 

Servitisation – where organisations transition from selling one-off products to selling the outcome or value those products deliver – is leading manufacturers to evolve their after-sales service operations from reactive, break-fix models focused on repair execution, to a new paradigm focused on dynamic repair prevention and maximising product uptime. In this new white paper, Syncron unveils how manufacturers can succeed in this shift to servitisation. 

“In this new era of servitisation, the responsibility for ensuring maximised product uptime is shifting from the end-user to the manufacturer,” said Gary Brooks, CMO at Syncron. “This new business model will require manufacturers to find ways to increase cost efficiencies throughout the entire value chain, ultimately driving them to completely transform business logic, company cultures and product development strategies. Today’s global manufacturers are at a pivotal point in their storied histories, and those that adapt to the changing climate will be the ones to come out on top.”

The key predictions included in the white paper include: 

1. The time for manufacturers to begin shifting to servitisation is now
2. Manufacturers must intelligently allocate the resources behind an evolving industry
3. Adopting the right technology is crucial to making servitisation a reality

In addition, the white paper includes a foreword by Syncron CEO, Anders Grudén, plus further details about the future of after-sales service and immediate next steps for manufacturers to take as they begin 2019.

“We interviewed multiple industry experts – the best-of-the-best around the globe, to compile this expert advice,” continued Brooks. “This white paper will serve as an ultimate guide for manufacturers to establish business plans for not only 2019, but also several years down the road.”

Key contributors to “2019 After-sales Service Predictions: Powering the Journey to Servitization Through Maximized Product Uptime” include: Kurt Ranka, Principle Director, Accenture; Carlo Alberto Carnevale Maffè, Professor of Strategy, Bocconi University; Nate Chenenko, Manager, Carlisle & Company; Jay Johnson, General Manager, Daimler Trucks North America; Jon Dickinson, Director of Aftermarket Sales, Spartan Motors; Anders Grudén, Chief Executive Officer, Syncron and Gary Brooks, Chief Marketing Officer, Syncron.

Click here to read “2019 After-sales Service Predictions: Powering the Journey to Servitization Through Maximized Product Uptime” in its entirety. To learn more about Syncron and its suite of after-sales service solutions, visit syncron.com.

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Syncron™, a provider of cloud-based after-sales service solutions focused on empowering the world’s leading manufacturers to maximise product uptime and deliver exceptional customer experiences, has recently announced a $67 million minority investment from global growth equity firm Summit Partners. The partnership with Summit Partners will support Syncron’s continued development of its category-leading enterprise SaaS solutions and further expansion of its global operations.

Servitisation – where organisations transition from selling one-off products to selling the output or value that products deliver – is leading manufacturers to evolve their after-sales service operations from reactive, break-fix models focused on repair execution, to a new paradigm focused on dynamic repair prevention and maximising product uptime.

Syncron offers a fully integrated SaaS platform to optimise the performance of the after-sales service supply chain and enable global manufacturers to evolve to subscription-based uptime service models, which is critical on the journey to servitisation. The Syncron Service Cloud applies machine learning to multi-echelon logistics and IoT data designed to deliver predictive insights and drive enhanced customer experiences, greater efficiency and brand loyalty.

[quote float="left"]Syncron powers the after-sales service organisations of many of the world’s leading manufacturers, including Electrolux, Hitachi, JCB, Mazda, Siemens and Toyota[/quote] Headquartered in Stockholm, Sweden, Syncron powers the after-sales service organisations of many of the world’s leading manufacturers, including Electrolux, Hitachi, JCB, Mazda, Siemens and Toyota. Syncron has more than 330 employees across 10 global offices and is a recipient of the Great Place to Work^® award.

“We are delighted to partner with Summit Partners to support Syncron’s next chapter of expansion and our path to IPO readiness,” said Anders Grudén, CEO of Syncron. “Summit’s deep experience collaborating with high-growth, enterprise SaaS companies will add valuable support to our vision of leading the transition from reactive, break-fix after-sales service to intelligently maximising product uptime and customer loyalty.”

“We believe Syncron is uniquely positioned to support global OEMs on their journey towards servizisation,” said Antony Clavel, a Principal at Summit Partners who will join the Syncron Board of Directors. “Across automotive, industrial machinery, high-tech, aerospace and many other industries, sophisticated manufacturers are working with Syncron to drive after-sales service excellence.”

“Syncron is an impressive technology company serving some of the world’s most respected manufacturing brands,” added Han Sikkens, a Managing Director with Summit Partners who will also join the company’s Board of Directors. “The Syncron team has delivered strong, profitable growth on a global scale and we look forward to supporting the company’s continued market leadership.”

Summit Partners manages over $14 billion in capital and has invested over $2 billion in European-headquartered growth companies. Syncron represents Summit Partners’ first investment in Sweden.

 

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Gary Brooks, CMO, Syncron talks to Kris Oldland, Editor-in-Chief, Field Service News about how the discussion around uptime has shifted from how to why...

“Time is something that is incredibly perishable, it’s finite, we never seem to have enough of it and we always wish for more of it in dire times.”

This eternal maxim, that translates across all cultures in all corners of the world, was at the heart of an excellent keynote presentation given by Gary Brooks, CMO at Syncron at the Field Service USA Conference in Palm Springs earlier this year.

Time is something that is incredibly perishable, it’s finite, we never seem to have enough of it and we always wish for more of it in dire times“It is interesting to apply that thinking to our business of field service,” Brooks explained when I sat down with him to catch up over a coffee a little later in the day.

“Let's look at it through the lens of time being a cruel mistress and then imagine you're a farmer. Not just any farmer but a very excited farmer because it is the first day of the harvest season. You’re deploying your new half a million dollar combine to go out and harvest at a fantastic new rate - but then it fails.” “It is a Sunday morning and your 200 miles from the dealer and can’t get someone out to fix it - then shift your thinking from that scenario to a question around uptime.”

It is an important shift in thinking and one in which the manufacturer bears more of the burden of failure in return for greater profit and a stickier relationship with the customer.

“At Syncron we’re obsessed with coming up with solutions that help manufacturers improve their uptime levels,” Brooks continues.

“We recently worked with WBR to launch a research project that is looking into uptime. How important is it for the OEM? Do they consider it a strategic advantage? How important is it for the customer of the OEM? 

Do they consider it something that can make their business more competitive? How much are the end users willing to pay for maximised uptime? Are they even willing to pay at all for maximised up time?”

An overwhelming majority of OEMs believe that maximising uptime is a strategic advantage for them“The preliminary research findings have identified that an overwhelming majority of OEMs believe that maximising uptime is a strategic advantage for them. An overwhelming majority of the customers of the OEMs believe it would be a competitive advantage for them. Executives are demanding it from the OEM side. End customers are even willing to pay more for it but the OEM is not ready to maximise uptime.”

It seems clear that the conversation has moved somewhat beyond whether the shift towards uptime was the right path to follow - the question many organisations are now facing is how they make that shift. Although case studies are beginning to surface as Brooks alludes to himself.

“I came to my first field service event three years ago, there was very little mention of the product becoming service, of servitization. Last year there was a tiny bit, but this year we are seeing companies that have now gone out and done it. We’re seeing companies who have now fully evolved to that model.”

Just how important a factor within the move towards servitization is the industry that an organisation operates withinHowever, one consideration I have recently been discussing with the likes of Prof. Baines at Aston University and Ross Townsend of Ishida Europe is just how important a factor within the move towards servitization is the industry that an organisation operates within?

“I think you're absolutely right that it is industry specific,” replies Brooks when I put this to him.

“For example, there are lots of articles on how the automotive industry is transitioning to a new norm where rather than buy a vehicle customers now want to buy access to a vehicle - the end result of which is that the customers no longer become the end-user but a fleet owner whether that be an internal or external operator.”

“And of course a fleet manager will be far more demanding in terms of uptime, than a single end user, so the market disruption really is felt on numerous levels,” Brookes concludes.

Whilst this is a specific example of a vertical being disrupted there could be wider learnings for other industries in how a shift to servitization could impact there own sectors as some business models evolve and other new models that have yet to be considered emerging.

What is holding some sectors back, whilst others drive forwards to embrace advanced services?But what is holding some sectors back, whilst others drive forwards to embrace advanced services?

“Part of the reason for the lack of full adoption could be a mindset, the preliminary response that we are getting from the research suggest that an overwhelming majority of the OEMs view their ability to deliver maximum product uptime or a type of service that guarantees maximum uptime - it was almost 80% that said they would view that as a competitive advantage,” Brookes muses.

“So when things have words like competitive advantage and revenue maximisation tied with it you would think that it would be accelerated implementation - so there is some barrier. The desire exists both on the OEM and the customer side, the opportunity to differentiate your product exists, the technology exists so what are the other variables?”

It is an important question that many companies in many sectors are trying to grapple with and when whoever discovers the answer will hold the keys to the future of field service.

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Having been widely touted as a technology that wouldn’t just improve service delivery but would completely revolutionise the way we even approach field service operations the Internet of Things has rapidly become an ever-present discussion topic amongst field service companies - but has the IoT revolution finally happened or is it still just the realm of those at the leading edge of adoption?

We ask three experts to give us their opinions on IoT in field service...

What are the core benefits of IoT for field service organizations?

Mark Homer, Vice President Global Customer Transformation at ServiceMax from GE Digital: One of the biggest challenges in field service is having advanced warning, visibility and insight into the equipment assets configuration, operational health and state, verification of location – before turning up onsite.

IoT is extremely beneficial in this regard.

It can tell you all of the above, as well as its environment, its connected to an echo system its configuration – including factory settings and as installed, localized configurations, additions, configuration changes, software and firmware settings or modifications as it’s currently operating and maintained).

IoT can also provide you with the current maintenance build, MBOM history of what parts have been changed, swap-outs, inspections, prior faults, diagnostics and lubrication, wear and tear process flow counters etc.

Using connected field service, IoT enables field service organizations to see visibility to all these and many other operational aspects of the installed asset/equipment prior to an engineering visit.Using connected field service, IoT enables field service organizations to see visibility to all these and many other operational aspects of the installed asset/equipment prior to an engineering visit.

The ability to see an asset’s health, performance, usage, RCM data, and access to a unique digital twin of this physical asset are all now possible in the field.

This empowers predictive, condition-based maintenance, as well as saving time and money, increasing first-time fix rates and customer contract renewals, and decreasing costs, overheads and streamlining supply chain issues for service call outs.

Gary Brooks, CMO Syncron: With the Internet of Things (IoT) becoming more mainstream – the market is expected to reach $267B by 2020 – companies across industries and verticals are starting to prepare for the impact this game-changing technology will have on their business.

Leading manufacturers like Caterpillar are investing heavily in connected machines to allow equipment to pass information from one to another, ultimately pro-actively repairing equipment before it fails.

This shift in thinking from a reactive, break-fix service model to one focused on maximizing product uptime is a fundamental change to how manufacturers handle service today, and IoT is at the core. Major benefits of incorporating IoT data into field service include:

• Quicker resolutions. IoT data can provide more diagnostic information, so a technician can arrive to a job site and immediately know the steps necessary to make a repair. IoT can identify what part needs to be replaced, and trigger action to either pre-emptively replace the part before it fails, or take immediate action if downtime does occur. Using IoT data effectively ensures that technicians are equipped with the correct parts, and can make a repair on their first visit.
• Happy customers. Customers are happy when their equipment is up and running, and any unnecessary downtime leads to dissatisfaction and frustration. Service parts availability is the linchpin to any successful service organization, and IoT data can help service organizations better manage their service parts inventories to ensure downtime is rare or completely eliminated.
• Increased revenue. When technicians are stocked with the appropriate parts and are able to repair issues on the first time, quickly and correctly, not only are customers content, but technicians are able to make more visits to more customers each day – ultimately resulting in more business and ROI for the manufacturer.

Mark Brewer, Global Industry Director for Service Management, IFS: The Internet of Things (IoT) and so-called “digital twin” technologies are poised to have a huge impact on the service sector; reducing costs, maximizing data analytics, and extending the lifespan of products.

IoT allows field service organizations to become proactive and predictive by identifying equipment issues and mitigating the problem before it cascades into dreaded unplanned failureIoT allows field service organizations to become proactive and predictive by identifying equipment issues and mitigating the problem before it cascades into dreaded unplanned failure that impacts business performance and safety.

When embedded into the right field service management software, service organizations can analyze and visualize real-time operational data from connected machines and devices and automatically turn the information into immediate and predictive actions. This, in turn, delivers service level improvements and drives better business intelligence and flexibility.

Another core benefit of IoT for not only service organizations, but any asset-intensive company wanting to optimize their service offering is the ability of predictive maintenance. The Predictive Maintenance report forecasts a compound annual growth rate (CAGR) for predictive maintenance of 39 percent over the time frame of 2016–2022, with annual technology spending reaching £7.96 billion by 2022.

Has IoT become prevalent amongst field service organizations as yet, or are those now utilizing IoT within field service delivery still leading edge? 

Mark Homer: It’s a hot topic. We see that most CSO are aware of IoT, and many prospects and customers are activating in IoT as well as the Industrial Internet of Things (IIoT), participating in one or two pilot or POC projects.

As an industry many service technicians have been collecting data from machines for years, typically through interface cables (e.g. RS232, Bluetooth collection of binary OT data, or early telematics).

Many Technicians are also used to reading meters and process counters, sampling lubrications and collecting photographic and thermography imaging as part of their work order completing debrief process.

IoT makes this process real time.

Gary Brooks: While many manufacturers are collecting data from sensor-equipped products in the field, few are actually using it to improve their service operations.

As the cost of sensor-equipped parts decreases and more data becomes readily available, it will become more important than ever to invest in human capital and technology that support a service model focused on maximizing product uptime.

Companies that do this in the next 12 to 24 months will be equipped to succeed.

Mark Brewer: Whilst IoT solutions are not yet prevalent in the majority of field service organizations, those utilizing IoT solutions and rolling them out at scale will be the winners over the next few years. Sensors are increasing in sophistication and are transmitting increasing amounts of data. With IoT sensors, the asset or machine becomes “smart” and is placed at the centre, sending data back to the service centre and enabling diagnostics to determine issues that may arise in a day, week or months’ time.

It’s this predictability that will enable field service organizations to deliver next-level customer satisfaction.

However, any IoT driven business requires data acquisition (communications and networking), analytics and business software to work in unison.

The problem is that very few companies have all the skills in-house to do this on their own. As such, savvy field service organizations will look to seek out IoT experts and form partnerships with them to take their business to the next level.

What steps are needed to introduce IoT processes into a field service delivery workflow?

Mark Homer: I am a great fan of using IoT education kits that are widely available and brilliant for educating technicians through practical and fun training labs - for example, the GE Predix IOT kit which you can find @ http://fs-ne.ws/1CJ730iXfcT

Mark Brewer: Firstly, companies need to be careful of integrating IoT for IoT’s sake.

By 2020, more than seven billion business devices are expected to be connected, but smart tech does not always add value. Misuse can lead to security vulnerabilities, with the network chain becoming more exposed to cyber threats. Organizations, therefore, need to first consider the business case for IoT.

A lot of IoT solutions mostly focus on a single element of IoT; for example, connecting the devices, or big data analytics - rather than providing a complete end-to-end IoT solution.Once this is understood, companies must start small - ideally by trialling a proof of concept. Before globally rolling out IoT solutions as part of their business, organizations need to check that the equipment, gateways and sensors work; that they are capturing the right data, and that they have all of the correct business applications in place to make sense of that data.

Next up is choosing a best-in-breed software application that can be easily integrated from inception with enterprise resource planning (ERP) software, or whichever management software the business has implemented. It’s important that the solution is completely mappable to the back end, closing the loop from device to business application.

A lot of IoT solutions mostly focus on a single element of IoT; for example, connecting the devices, or big data analytics - rather than providing a complete end-to-end IoT solution.

Field Service organizations need solutions that make the critical connection between analytics and transactional applications, which turn analysis into action and then into value.

Is adoption of IoT essential for a field service company to remain competitive?

Mark Homer: Yes, obtaining more accurate data from your connected assets will provide deeper understanding and insight into how your customers use and operate the equipment and assets you provide and thus enable you to derive a clearer understanding as to the value of that provision to your customer and their end customer or the upstream or downstream supply chain.

By understanding the asset performance, availability, and its RCM (condition and status), the asset true through life cost (cost of the asset throughout its whole life and its ultimate replacement) the servicing costs of inspection, maintenance, breakdown in the event of unplanned downtime is all critical as it allows for future innovation to improve future profit, performance and efficiency of the assets and the workforce maintaining it.

Connected products are also able to provide R&D with amazing data to give deep visibility into how a customer truly uses the equipment you provide.

This, in turn, is assisting the product development lifecycle in designing easier to use and maintain products.

Gary Brooks: As more products are equipped with smart sensors and complete autonomy becomes a reality, it will be more important than ever to shift from a reactive, break-fix service model to one focused on maximizing product uptime, or preemptively repairing equipment before it ever fails.

The best way to achieve this is to leverage IoT data to ensure parts are pre-emptively replaced before they fail.

Manufacturers must reinvent their service organizations, adopting sophisticated solutions and new business processes to optimize service parts inventory levels and prices while maximizing product uptime, which not only leads to improvements in revenue, gross profits and operational efficiency but also the overall customer experience.

Mark Brewer: By 2020, around 25 percent of asset-intensive companies will adopt IoT and digital twins to optimize service.

Whilst this doesn’t seem tremendously high, with the general shift towards servitization and the demand from consumers to have an all-encompassing customer service experience, more and more organizations in industries like manufacturing and construction, and logistics companies, in general, will be utilizing IoT technologies to expand their service offerings.

IoT technologies have the potential to enable companies across all industries to measure aspects in a detail and quality that has never been possible before; empowering businesses with assets’ performance indicators.

Leveraging IoT solutions can help organizations measure essential key metrics, such as availability, reliability, maintainability, supportability, cost of ownership and end-result, allowing them to operate more like service industries.This enables companies to find the most profitable models - turning service into opportunity.

Leveraging IoT solutions can help organizations measure essential key metrics, such as availability, reliability, maintainability, supportability, cost of ownership and end-result, allowing them to operate more like service industries.

For example, previously, the manufacturer’s knowledge of a product stopped once it left the factory. But now, via the feedback made possible through IoT, manufacturers can start to learn the usage, behavior and performance of these products in the real world, and can even make engineering changes to improve them over time.

Another example is construction machine manufacturer Caterpillar. The company has been able to fit its equipment with smart sensors to measure tire pressure, temperature, oil levels, and so on. It is a win-win for customer and service organization alike; minimizing equipment downtime and enhancing product development and improving service efficiency.

The approach is said to have saved Caterpillar millions of dollars already.

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What will the impact of servitization and the move to preventative maintenance that it entails have on parts and inventory management? Erik Kjellstrom, Pre-Sales Manager, Syncron tackled this question at the Aftermarket Conference in Hamburg last October. Kris Oldland followed up with him after the event to find out more more...

As Erik Kjellstrom, Pre-Sales Manager, Syncron, stepped down from the stage having just given a presentation at this year’s Aftermarket Conference, I was looking forward to the opportunity to catch up with him for a number of reasons.

His organisation has been something of an anomaly in our sector of recent years. A pioneering lone voice that often were seemingly single-handedly trying to bring a dedicated solution to what was often the unloved piece of the field service puzzle – parts management.

Whether, it be pricing, inventory management or stock ordering, Syncron have successfully over the last few years been one of few brands to be associated with taking this part of the aftermarket conversation seriously. We’ve seen Syncron a lot at various conferences over the last 24 months and almost each time they’ve been armed with case studies and hard data that revealed just how much (and how easily) their solution has improved their clients P&L both in terms of top line revenue and bottom line profit.

However, this time around there was a twist to their approach. Having recently brought a new in module into their offering that is focused on predictive maintenance and based on IoT, were they shifting their focus - or was this development just a natural evolution that reflected the changing dynamics of the industry?

The central thrust of Kjellstrom’s presentation was that essentially there are a number of interesting trends appearing in the aftermarket industry – covering a lot of the ground that regular readers of Field Service News will be familiar with.

We are seeing futuristic concepts such as Drones, 3D Printing, Augmented Reality and Autonomous Vehicles all of which have all been on the horizon offering the promise of industry revolution for a while but are now really starting to come into the mainstream conversationTo begin with, coming from the technology perspective we are seeing futuristic concepts such as Drones, 3D Printing, Augmented Reality and Autonomous Vehicles all of which have all been on the horizon offering the promise of industry revolution for a while but are now really starting to come into the mainstream conversation. Alongside this with have already seen wide adoption of Mobile, Cloud and increasingly the Internet of Things amongst manufacturers and service providers.

However, the changes we are seeing in our sector are not just driven by technology alone.

Sweeping demographic change within the workforce, accelerated by the ageing workforce crisis being faced by companies across the globe and being exacerbated by the unprecedented differences between the incoming Millennial generation and the outgoing Baby Boomers, is of course another factor driving industry evolution forwards.

Finally, add into this mix our shift to a much more service and outcome orientated society as a whole - arguably itself the result of the generational shift alongside the technical advances referenced above and we are seeing companies turn their entire business models on their head.

Servitization has gone from fringe concept to buzzword across the last eighteen months or so as talk of ever decreasing SLAs and increasing First-Time-Fix rates has morphed into discussions around guarantees of uptime and the financial impact of unplanned downtime.

As such our industry is in a fascinating and exciting state of flux at the moment and it was this rapid development and the various drivers behind it that were at the heart of the Kjellstrom presentation in Hamburg.

Of course, such dynamic changes within the sector need to be reflected within the solutions provided and it is the shift towards preventative maintenance (itself a major stepping stone on the way to servitization) that Syncron have focused their latest efforts on.

“We have been working very much to support more reactive service models in the past in terms of inventory management and pricing but what we are now doing, both from a product stand point but also from a service offering standpoint, is we are working towards an uptime supporting module.” Kjellstrom explained when we caught up.

In brief, Syncron are integrating a new module into their current service network optimisation capabilities.

These capabilities in the past had all been centred on the parts management area of the Aftermarket sector – pricing, inventory management, and ordering. However, their new module is a predictive maintenance module they call Uptime (makes sense), which Kjellstrom explains is intended to ‘blend together the aspect of inventory management and pricing etc with an understanding of the actual assets that use these parts.

It seems a natural alignment to bring the asset and the parts management together in the preventative management worldIt seems a natural alignment to bring the asset and the parts management together in the preventative management world. Indeed, much of reasoning behind this development from Syncron echoes a similar line of conversation that ServiceMax put forward when they announced their integration with GE Digital’s technology Asset Performance Management (APM).

Essentially both Syncron and ServiceMax are approaching the same central maxim - just from two different angles. In a world of IoT and sensor-led preventative maintenance the asset is King and everything else should fall in line around and work back from that one premise.

However, where one does feel that viewpoints will change between the two organisations is in how the ecosystem is built. Through their recent acquisition list including Servicemax, it is clear that GE Digital have their eyes set on building a comprehensive and all encompassing new platform for age of the Industrial Internet.

For Syncron however, the focus for the time being at least, appears to be in line with their best-of-breed heritage.

“I think that a product such as ours and a Field Service Management (FSM) system are complimentary products.” Kjellstrom explains.

“We have many instances where we will see a FSM system or a maintenance system that runs in compliment to the more Aftermarket focussed, parts oriented solutions such as ours. Perhaps what makes Syncron a little bit unique is the way we work and how we blend together the aspects of network optimisation and parts optimisation which is often natively something that belongs in a FSM tool.”

With so many technologies evolving at once a clear case could be made for establishing a comprehensive technology ecosystem across a service orientated business and Syncron is set to be an important part of that ecosystem.

Yet, in a world that seems to be in constant Beta, not all developments are equal and Kjellstrom believes it is important to understand how different technologies can impact the way we work when building out your own tech strategy.

Certain technologies will bring refinement whilst others offer revolution.

“We definitely see more potential impact from some types of the technologies than others,” he comments.

“What we are really interested in are the questions like will 3D printing totally replace a need for service part inventory management – and the answer is no it will not, it may enhance it but it will not replace it.”

Does the development of autonomous vehicles mean that we will begin to see car sharing across a team of engineers“How about autonomous vehicles? Does the development of autonomous vehicles mean that we will begin to see car sharing across a team of engineers” he asks rhetorically before outlining that such technology could lead to servitizing the fleet at which point automotive manufacturers concerns about spare parts really begin to truly change and evolve into an entirely new set of thinking and processes.

“These are the types of questions that we are interested in, in terms of the emerging technology.” He explains.

“What we are seeing is that some of these new technologies are really pushing towards a more uptime related world, whereas some technologies are more likely to become tools for us to simply improve existing processes.”

However, whilst he believes the shift to Servitization and outcome based solutions will continue to grow, Kjellstrom also insists that the traditional break-fix market and the aspects of pricing, parts management and inventory which that function drives forward, will never fully disappear.

“I am sure that the shift in focuses to uptime guarantees are growing rapidly and eventually break-fix is going to become less significant but there is always going to be the type of customers where uptime critical assets are not relevant.”

Indeed, whilst we wait for the weighting between the old and the new to do a 180 flip, one thing is clear, for the short-term at least we need to be able to accommodate both – which means looking to the future today – something Kjellstrom and his colleagues have embraced which is clearly evident by their introduction of the new Uptime module.

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SyncronTM, a leading provider of cloud-based after-sales service solutions focused on empowering the world’s leading manufacturers to maximise product uptime and deliver exceptional customer experiences, have recently announced the launch of the After-sales Excellence Forum, a complimentary, half-day event aimed at helping manufacturers unlock hidden revenue opportunities and achieve new levels of customer satisfaction through optimised after-sales service.

It’s no secret the world is changing, and it’s changing fast. Multiple demographic, economic and social trends are pushing manufacturers to transform their after-sales service organisations, and shift from a reactive, break-fix model to maximising product uptime. This event aims to help companies embrace this change to achieve new levels of financial performance, customer loyalty and competitive differentiation.

The agenda specifically includes:

• How to leverage after-sales service as a growth and profit lever
• A deep-dive into how optimised service parts inventory greatly improves service operations
• Challenges facing after-sales service professionals, and how to overcome them

“We are thrilled to welcome the UK’s leading manufacturers to the After-sales Excellence Forum,” said Gill Devine, VP of Sales, EMEA at Syncron. “We are bringing together some of the top after-sales service experts to share strategies and tactics for how to successfully navigate today’s changing world. We aim to give manufacturers the confidence to take their after-sales service operations to the next level, increasing both financial performance and customer loyalty.”

The complimentary event will be held at The Icetank in London on 12 Oct. Representatives from Syncron, Servispart Consulting and IAAF will lead the day’s discussions.

To learn more about the event and register, click here.

 

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The management of parts has been for a long time a little unloved in terms of field service technology. Kris Oldland talks to Gary Brooks, CMO, Syncron to find out how and why that is changing...

KO: There finally seems to have been a quite perceptible shift in the number of companies beginning to pay attention to the importance of good parts and inventory management. Are you feeling this?

For example every-time I come across your team at various different events I see you having a lots and lots of conversations at busy, busy booths.

Are you finding that whereas, perhaps a few years ago you were having to evangelise the importance of tools like yours, today people are actively looking for them?

GB: You’re absolutely right. There are so many things going on socially, politically, demographically, economically that are really putting pressure on the field service organisation to not only deliver maximum uptime - we are really moving away from the traditional break/fix aftermarket model, towards moving towards being much more proactive and preventative, and technologies are enabling us to do that.

Manufacturers around the world are waking up to the fact that the market has changes - from the volatility in the orders of durable goods, to millennials taking over the workforce, to the movement to ‘power by the hour’, so a lot of them are looking for low hanging fruit.

They’re asking “what can I do to my service organisation to increase revenue” because a lot of companies now view the product that they sell as something that can they can put in the field to leverage high margin service revenue for an extended period of time - in heavy equipment we’re talking 25 years.

 

So they are looking at this, they’re saying how can I improve revenue? How can I improve margin? How can I have a more predictable service business and then how can I deliver a wow level of service - or prevent that service call from having to actually take place over time because of the use IOT, machine learning and smart parts.

Our friends at The Service Council established that 50% of service attempts fail because of not having the right part, and even if the right part is available then companies are not maximising the revenue correctly because they are not pricing correctly. 

So, for a lot of organisations they are saying lets get the parts side of the business right - because the financial gain that can be harvested is significant. 

When you look at the inventory side, we see companies increase service parts revenue by up to fifteen percent, increase gross profit margins up by as much as forty percent and taking forty percent of inventory whilst taking their fill rate up above ninety percent.

So, mathematically, the financial value creation really works and then if those parts are priced appropriately- we are seeing companies take up their service parts revenue by as much as five percent and gross profit margins by as much as seven percent.

If you have several hundreds of millions of dollars, or even close to a billion dollars if you’re in a sector like Aerospace, five percent here and seven percent there suddenly becomes a very sizeable figure.

So in Answer to your initial question, yes we are now seeing a much bigger customer pull, and I think whilst it may be partly due to the Syncron being much more visible in the sector, but it is also a matter of demand from the market - increasingly companies are now coming to us.

KO: You mention outcome based services as a significant shift that is happening within field service across multiple regions and verticals.

What impact is that having on the spare parts/aftermarket and consumables markets - is there a direct adverse impact on this?

GB: Yes, I would think that it is very much having an adverse impact on this side of the market.

Manufacturers will increasingly sell service level agreements much like you would see in high tech.

In high tech there is not a lot of sales of parts. If your servicing a piece of high tech equipment whether it be in medical or whether it be in the IT space, you have a service level agreement and you have certain requirements whereby it needs to be back on line within an hour or two - so there is no buying of parts.

I think as more industries begin to adopt the service level agreement approach rather than buying a part it will have an impact on parts revenue as having that part available to perform that repair or maintenance in advance of the asset failing becomes even more critical.

 

In my car for example, I have an app that tells me when there is something going wrong with my car.

Today, it doesn’t tell me when a part is about to fail but in the future I imagine that it will and so when I do have to bring the car in for service it will say well this part, this part and this part are all close to failing so why don’t we replace these all now?

It becomes preventative maintenance, we prevent the failure from ever happening. This is changing the way businesses approach the value of parts and indeed service. It is certainly an exciting time to be in the field service business because of all these economic, social and political changes that are driving the attention on the service business but also the emergence of all these new technologies.

KO: Given this new wave of interest in Field Service as a something more than mission critical, but also fundamental to revenue streams - are you seeing more companies you work with getting involved with such conversations from board level?

GB: Yes, I absolutely think field service is really garnering executive level attention now.

I think a lot of that is driven by the demand and the shift that we are seeing amongst the customers. Customer-centricity has always been a bit of a buzz word in the industry but I think it is becoming hot again and I think that’s because by 2030 around 75% of the workforce will be comprised of Millennials.

Their service expectations have been informed by the likes of Amazon, Uber and TaskRabbit. Their mindset is “What do you mean I can’t have it fixed now?” And that is definitely driving the demand side.

[quote]Service expectations have been informed by the likes of Amazon, Uber and TaskRabbit. Their mindset is “What do you mean I can’t have it fixed now?” And that is definitely driving the demand side.

But then also when you look at the margin side and at the revenue side, I think a lot of executives that are in the C-Suite came up from the manufacturing or sales side - so they sometimes have a biased view of their business. I call this the street light effect - they can only see what is in the light and that for them is looking at the product side of the business.

 

But for many of them, they’re starting to look beyond the street light and are saying wow - this service business is pretty darn exciting.

And in a lot of cases it’s often just held together with bubble gum and banding wire. So the thinking goes “if we make some upstream investments, we can deliver some pretty healthy downstream dividends.”

So I think that executives are just beginning to expand there point of view. For many years it’s been a case of “it’s [service] kicking up great margins, it’s not broke, let’s not fix it.”

But now companies are seeing with declining lures on the product base side of a business. They’re faced with dwindling margins and if they put even more effort on this side of the business they can only get a limited return.

I think companies are starting to see that similar investment in time and resources on the service side now is going to deliver a lot better returns.

 

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Gary Brooks, CMO, Syncron outlines some of the key technologies set to have a significant impact on field service in the not so distant future... 

Regardless of industry, emerging technologies like autonomous vehicles, wearable devices, the Internet of Things (IoT), 3D printing and drones, will have a significant impact on how after-sales service, the service delivered after the initial sale of a product, is performed. For manufacturers of long lasting durable goods specifically, these new and evolving technologies will enable them to respond to the increasing demands of today’s consumers.

After-sales service is now one of the biggest opportunities for manufacturers to generate revenue, increase margins and improve customer loyalty. For field service repairs, emerging technology used correctly could become a huge source of competitive differentiation and improved service levels.

 Below, I outline five emerging technologies and how manufacturers can use them to positively impact their field service organisations.

Driverless cars:

According to Juniper Research, by 2025 there will be 20 million driverless cars on roads around the world, with them becoming most popular in North America and Western Europe by 2021. For manufacturers, this emerging technology could be especially beneficial to field service. Driverless vehicles mean technicians can multitask – something that they can’t (or at least shouldn’t) do behind the wheel today.

Multitasking allows technicians to use their field service app to ensure the upcoming appointment is as efficient as possible while en-route to the call – reading up on customer history, service part inventory and equipment data – so that the technician walks into the appointment ready to make the repair quickly and successfully. The possibilities are endless – if a vehicle is not stocked with a needed service part, it could self-drive to a warehouse to retrieve it while the technician is working on other aspects of the repair. This emerging technology could provide new and easy ways for technicians to do their jobs more efficiently and effectively, and for manufacturers to create that competitive edge with their service organisation.

 

Wearables:

Gartner anticipates smartglasses, like Google Glass, could impact the field service industry by $1 billion in 2017. The biggest impact wearables could make is in efficiency – if technicians can diagnose and fix problems more quickly without bringing in additional experts, both the cost savings and improved customer experiences could be monumental.

The augmented reality associated with smartglasses provides on-the-job training to technicians, and enables them to more easily repair goods, especially those they have less experience repairing. Additionally, the hands-free nature of smartglasses allows technicians to complete tasks without having to start and stop to read or view instructions. Video collaboration with remote experts could also add to efficiency.

While adoption of wearable technology has been slow due to the dependence on apps and services targeted to field service, companies like KPIT have already deployed smart glass technologies for field service specifically. As barriers to entry become lower, brands will be forced to adopt ‘smart’ devices to meet demanding customer expectations.

Internet of Things (IoT) 

Forrester foresees IoT as a means to create more valuable customer interactions and improve the customer experience. And, this holds true for field service, which oftentimes serves as the ‘face’ of manufacturing brands.

The intertwined network of physical goods with sensors and software allows manufacturers to freely exchange data between the products they sell and their internal systems in place. This helps both the manufacturer and end-customer – products built with ‘smart parts’ can send a signal to both the manufacturer and customer to alert them a repair is needed and to schedule a service appointment soon. With the appropriate service parts management technology in place, the manufacturer proactively ensures the needed part is available and sends a technician to repair the product quickly, alleviating any downtime, and delivering the amazing experience customers expect.

3D Printing

3D printing has long been used in manufacturing to create part prototypes. Now, with the advances made to the technology, they can print parts in metal, which means 3D printing can be used to create actual replacement parts.

As the technology continues to advance, the impact 3D printing could have on parts inventory levels, warehouse needs and the logistics of moving parts from one location to another could be monumental. These factors will lead to reduced cost and faster repair times – meaning more revenue for the manufacturer and better experiences for the end-user. And, it might not be in the too-distant future that driverless vehicles could be equipped with printers that can print parts on the spot!

 

Drones

Drones are becoming increasingly common for personal use. You’ll oftentimes see them at high school sporting events, outdoor concerts or being used for personal photography. For field service specifically, there are both immediate and long-term benefits of drone technology.

More immediately, drones can be used as a means of diagnosing issues on large-scale equipment like oil rigs. This means less risk for the field service technician, as drones can help them survey large or hard-to-reach areas without putting themselves in dangerous situations. Or, they can be used in warehouses to retrieve parts, making the process much more efficient.

In the future, drones could even be used to deliver a part in the field. If a technician is on-site making a repair but doesn’t have the necessary part, a drone could bring it to him or her, eliminating the need to make an additional service call.

 These emerging technologies are beginning to impact businesses today, and manufacturers must consider adopting them to meet the needs of today’s customers, while simultaneously driving revenue. Soon, everyone will be able to say they’ve received exceptional customer service, as long as manufacturers embrace these new tools.

 

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Giacomo Squintani of parts management specialists Syncron looks at the challenge of ensuring your supply chain is not the weak link in your field service delivery...

As the overall experiences customers have with durable goods manufacturers become more critical to company success, the strides made in field service management to ensure these positive brand interactions have been remarkable.

Field service technicians not only are the ‘face’ of a company – the individuals interacting with customers on a regular basis – but also key stakeholders in improving performance for the business as a whole.

As a service manager, you must put yourself in both your customers’ and your technicians’ shoes. Your customers’ experiences have improved greatly in recent years. You’ve reduced response times and improved the accuracy of the timing of your technician’s visit while improving first time fix rates. You’ve empowered them with the guidance to fix many problems without visiting them in-person, saving everyone time and money.

For technicians, you’ve reduced their windshield time, turned them into trusted advisors and empowered them with access to all the required knowledge at a click. And, you’re already thinking about the new world that augmented reality could open up.

 

But, what’s the classic problem that frustrates your customers, your technicians and you as a manager?

That’s right. The technician is on time, highly knowledgeable and determined to help, but isn’t stocked with the correct part.

So your brand’s main ambassadors are all too often left sinking in unsatisfactory excuses as unhappy customers stare and shake their heads. And suddenly, that value you’d created through field service management technology investments is compromised by insufficient part availability.

The problem

Many OEMs have successfully grappled with the age-old parts:people challenge, and are reaping its many benefits.

In 2013, AberdeenGroup established that only 45 percent of the companies they interviewed had “increased their focus on service parts management as a result of the added demands from customers to improve service-issue resolution”[1]. Why are so many organisations failing to address a problem that impacts technicians’ effectiveness, brand reputation and customer loyalty, tying up cash in vans and warehouses in the shape of unnecessary, often obsolete stock – ultimately harming profits?

Furthermore, Aberdeen found that only 48 percent of those organisations leveraged “service parts management to increase collaboration across business functions and service,” in spite of the unassailable notion that “the value that other functions can glean from valuable service parts data is immeasurable.”[2]. Highlighting the efficiency losses of a disconnected service ecosystem, the report concluded that “the success of field service is very much dependent on the parts and vice versa”[3]. And yet…

 

In a separate report, WBR established that, when establishing the criticality of future investments, only 8 percent of executives were considering inventory management.

Yet, when they examined the sources of customer complaints, the biggest contributing problem was parts unavailability, cited by 55 percent of service executives. Failure to fix the issue on the first visit, the engineer’s arrival time and their lack of experience generated far fewer complaints, with rates of 35 percent, 29 percent and 12 percent respectively[4]. These negative experiences leave your customers baffled and frustrated with a negative perception of you brand.

The solution

Resolving these types of customer issues and experiences is perfectly feasible.

Technologies exist for this very purpose – service parts management and scheduling solutions interacting together to ensure that when your technician arrives to the right place at the right time, they have the right part to keep your customers happy and encourage repeat business.

Solutions specifically built for the service business, with all of its challenges around low-volume, ‘just-in-case,’ intermittent availability, rather than for high volume, predictable, ‘just-in-time’ throughput.

 

Service parts management can make your technicians’ lives easier, and in turn positively impact each customer’s experience with your brand.

As outlined previously, technicians’ responsibilities are broadening: their job no longer ends when the issue is resolved, it entails acting as trusted advisors, identifying opportunities for further business and potentially maintaining other vendors’ equipment. And, most importantly, are the ones interacting face-to-face with your customers.

Room for improvement

Service part inventory networks are complex – a part may go through central warehouses, distribution centres, regional stocking locations and secure local collection boxes along its journey to a technician’s vehicle. Oftentimes, technicians will end up being over-stocked, causing unnecessary restocking at the warehouse.

Hurt by online shopping, brick-and-mortar retailers are providing spare part stocking locations to bridge the physical gap between technicians and end customers.

These scenarios should be embraced by service teams: the greater the complexity, the greater the potential for efficiency improvements in the service part supply chain. Once routing and scheduling have been optimised, further benefits can only come from other processes within the service ecosystem, and service part inventory management, with its potential to reduce costs across multiple echelons within the supply chain, can deliver quick gains.

 

With switching barriers lower than ever, in a competitive landscape where you are not only fighting rival OEMs but also independent service providers, you owe it to your technicians to empower them with the right tools for the job.

You owe it to your customers, too. And, having established fantastic efficiencies in field service management, there is far greater scope to drive value and ROI by optimising your service part supply chain. Enable your techs to drive an awesome customer experience at every interaction by ensuring the right part for the job is at hand when and where they need it.

 

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[1] AberdeenGroup, “Service Parts Management 2013: Align Planning and Forecasting with Efficient Resolution”, p. 1

[2] AberdeenGroup, op. cit., p. 3

[3] AberdeenGroup, op. cit., p. 7

[4] WBR, “Where Service Meets Sales: Automating for the Future of Field Service”, p. 10

 

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For manufacturers, parts supply and management has a major role in their aftermarket service operations. This event, led by aftermarket software experts Syncron, will show delegates how smarter inventory management can deliver greater customer experience.

Do you have all your inventory challenges under control? Great availability, no redundant or unnecessary stock? Shipping costs minimised, profits on part sales maximised? Happy clients, dealers and colleagues?

If you feel there is scope to improve your organisation's performance in any of the areas above, this Syncron Connect UK event is for you.  It takes place on 8th June, at the famous Belfry Hotel and Golf Resort, Sutton Coldfield, West Midlands.

Delegates will be able to hear about strategies to unlock profits through smarter inventory management, by more accurately estimating your spare parts requirements, better distributing them across your network and maximising profits on their sale

Mike Toms, Business Development Manager, JCB Service, will tell delegates about his company's journey, while Aston Business School will provide insight into how manufacturers can compete through Servitization and Advanced Services. Giacomo Squintani, Syncron, will explain the Best-of-Business v. ERP challenge for manufacturing service operations.

 

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Click here to see the full agenda and to register for Syncron Connect UK

 

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