AUTHOR ARCHIVES: Chris Mitchell

Is investing in service execution solutions enough to improve first-time fix rates and achieve high levels of equipment uptime? Chris Mitchell from PTC explains more...

Improved asset uptime, first time fix rates, repeat visit avoidance; all are undoubtedly some of today’s OEM’s most relevant metrics and challenges: revenues from service offerings, whether it be PBL contracts or more traditional service models, are too significant to be ignored.

Not least through industrial applications of the IoT we see an abundance of applications and use cases relating to operating and servicing equipment, whether in the field or in the factory. The way we can now easily connect to assets and operate, monitor and diagnose them remotely is simply fantastic.

Many also focus on applications of augmented reality to not only improve the way equipment is maintained in established markets, but also how it can be maintained in emerging markets, where experience and training is simply lacking.

The trap many OEMs fall into, however, is the notion that investing into the improvement of such service execution challenges is sufficient.

Improving asset uptime in this way has certainly never been easier to accomplish -  all the enabling technology is here today! Adopting these new technologies to improve the service experience are essential. However, there is a huge aspect to servicing assets, which is still widely ignored: Spare parts inventories are not optimised – so the right part is too often not available at the right time, place and cost: Companies’ investment in their spare parts inventories are simply too high.

Balance sheets are laden with huge amounts of cash that are tied up in incorrect inventories and need to be freed up to be spent in other areas of the business or to simply improve operating margins. Bills for expediting shipments and cannibalising production inventory are largely too high.

The challenge is that unlike production inventory planning, spare parts demand, and therefore inventory, is much more difficult to predict. Too often historical demand is used to forecast but, in most cases with low levels of accuracy.

Not often enough is spare part demand forecasted by employing causal factors, where forecasts are calculated based on your equipment usage rates and average values for casuals, such as meantime between failure rates. OEMs would now able to use real-time usage data and predicted failures of the asset to further improve forecasts and therefore optimising parts availability further.


"Too often historical demand is used to forecast but, in most cases with low levels of accuracy..."


Regrettably the required information is often not provided by other parts of the organisation, the negative consequences of which are not addressed in the organisation. Levels of equipment uptime and part availability are far lower than they should be. Brand loyalty suffers, customers buy parts (and equipment) elsewhere and revenues are impacted.

So how do we solve the conundrum of keeping inventories low whilst exceeding customer expectations in terms of equipment uptime and part availability?

The approach needs to be all encompassing if you really want to offer first class service to your customers at the lowest possible cost and should incorporate the following:

1. Improve parts availability by improving forecasting, inventory optimisation and supply planning - this will drive immense value within a few months of implementing and will drastically reduce inventories, equipment downtime and improve first time fix rates. You now have a parts supply chain, which perfectly supports an optimised service and repair network.

2. Automate field service operations by ways of a connected optimisation solution wherever possible, by leveraging exception monitoring and failure prediction from connected assets - let the asset tell you it’s failing rather than the customer when it’s too late - this will further reduce downtime and speed up repair time frames.

3. Enable the field technician (or customer) in the most effective way, by leveraging digital service content delivery through phones, tablets or VR, AR or MR headsets, leveraging augmented and virtual reality technologies. This will speed up repair or maintenance steps and ensures technicians operate effectively and based on the most up to date information available, information that is delivered from downstream CAD and PLM solutions.

4. Ensure service contracts and parts are priced correctly. This way you ensure sales are profitable and customers return to you time and time again for repeat business. This is also the ultimate way to combat the threat from copy pars.

There are many more applications of the above technologies, not least training and enablement, but hopefully it becomes clear that implementing one technology without the other will only unlock some of the value.

So in summary: the key to an optimised field service operation is not just the use of best of breed execution tools such as AR, Field Service Management and Service Parts information. The technician visit can only be successful first time if the correct spare part is made available, i.e. if the demand for the spare part has been predicted as accurately as possible and has been made available to the technician!

Chris Mitchell is Director Business Transformation - Servigistics Business Unit at PTC.