AUTHOR ARCHIVES: Kris Oldland

As we continue our new series we are delighted to bring you a selection of articles taken from the recently released and highly informative, limited edition of Mobile Resource Management for Dummies, which is presented by Verizon Connect. 

 

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What Is Mobile Resource Management?

The traditional approach to handling business growth is to focus on meeting increased demand – more workers, more vehicles and more warehouses. This can also mean an increase in administrative and management staff and higher overheads.

This linear strategy is fine while the work is there, but in a market filled with increased competition and fluctuating customer demand, committing to fixed expenses can leave a company exposed if business stops booming.

Clearly, saying no to new business is not an option. Fortunately, there is another solution.

Mobile resource management (MRM), or enterprise fleet management technology, helps mobile workforces and the people who manage them to get smarter about how they use their assets.

 

"Mobile resource management (MRM), or enterprise fleet management technology, helps mobile workforces and the people who manage them to get smarter about how they use their assets..."

 

This allows them to improve productivity while saving money by avoiding the financial risk of prematurely acquiring additional employees, vehicles or equipment.

MRM refers to a broad suite of hardware and software technology solutions that are used to monitor, track and optimise mobile assets, from tools and heavy machinery to vehicle fleets, employees and more. MRM is focused on making the best use of a business’s existing assets – vehicles, equipment and employees – to maximise its capacity; connecting the vehicle, the people and the work.

Most businesses have untapped potential that could be converted into a revenue-generating activity, but they don’t know it exists, or how to leverage it. You want to find your underutilised or inefficient assets and/or staff, and this can only be highlighted by monitoring them.

That’s where MRM technology comes in. It monitors each of your assets and allows an owner or appropriate stakeholder to see what, where and when resources are being used.

Using the data supplied by location-based technologies fitted to the vehicle or equipment (including phones and tablets), an MRM solution can easily show a range of productivity metrics.

Information that can be reported includes:

• When vehicles arrive at and/or leave a worksite or customer location.
• If the vehicle is anywhere other than where it should be.
• When equipment is being used (engine on).
• Which vehicles or assets have been sitting idle.
• Vehicle travel time (to determine time spent between jobs).
• Whether drivers are taking the quickest and most efficient routes.

 

Modern MRM solutions increasingly leverage the ubiquitous connectivity, unlimited scale and low-cost advantages of the cloud (discussed in the previous article here).

Some examples of technologies, applications and uses that might be found in a complete MRM solution include:

• Telematics
• Route optimisation
• Mobile technologies
• Data connectivity
• Work order management

Let's explore the first of these, i.e. telematics in closer detail...

 

Telematics

Telematics integrates vehicular technologies, road transportation and safety information, sensors, instrumentation, wireless communications and more. Telematics is sometimes referred to as ‘GPS (Global Positioning System) vehicle tracking’. However, that doesn’t begin to cover the breadth of capabilities under the telematics umbrella.

 

"Aside from simply tracking vehicle location, a robust web-based telematics solution offers customisable reports, near real-time vehicle and driver alerts, vehicle health, dashboards, custom map overlays, geo-fences and other tools to help companies manage and optimise fleet operations..."

 

Aside from simply tracking vehicle location, a robust web-based telematics solution offers customisable reports, near real-time vehicle and driver alerts, vehicle health, dashboards, custom map overlays, geo-fences and other tools to help companies manage and optimise fleet operations.

A comprehensive telematics solution empowers businesses to monitor and understand a broad range of operational factors, including:

Fuel consumption.

Fuel is one of the largest fleet operating expenses. Finding new ways to reduce fuel use provides immediate benefit to any company’s bottom line. With a telematics solution, fleet managers gain detailed insight and visibility into several key areas that have a big impact on fuel use, such as:

• Speeding – According to Commercial Fleet, a van driving at 80 mph uses 20 per cent more fuel than one driven at 70. That adds up quickly when you multiply that by any size fleet over the course of the year.
•  Idling – Unproductive idling is another fuel drain. For example, Figure 2-1 shows that the average yearly idling cost for a fleet of just 15 Transit vans is more than £11,000.
• Vehicle maintenance – It may not be as obvious as speeding and idling when it comes to wasting fuel, but proper vehicle maintenance plays a big role in fuel efficiency. Proper maintenance, including proactively addressing diagnostic trouble codes (DTCs) and maintenance alerts, as well as maintaining proper fleet operational levels, help to reduce costly downtime.
• Tyre pressure – According to the UK’s Department for Transport, underinflated tyres lower fuel. For example, four tyres that are just 25 per cent underinflated increase fuel consumption by about 0.2 per cent. Additionally, properly inflated tyres are safer and last longer.
• Unauthorised use – Unauthorised vehicle use equals unauthorised fuel use. Corporate fuel cards can be tied to specific vehicles via telematics to identify if a fuel card has been used without an accompanying work vehicle. Also note the fuel capacity of your vehicles, in case an employee purchases 45 litres of fuel for a company vehicle that only has a 40-litre capacity tank!
• Route optimisation – Are drivers taking the most efficient routes throughout the day? Added miles burn fuel and put unnecessary wear and tear on the vehicle itself.
• Utilisation – Understanding how much of a vehicle’s time is engaged in productive work can provide valuable insight that may allow some companies to perform the same work in the same amount of time with fewer vehicles on the road – which means less fuel use.

 

FIGURE 2-1: Average idling costs for Transit van and HGV fleets (source: Fleetmatics).

Safety

Any company that has a fleet of mobile workers considers the safety of their drivers and the public to be a top priority. Fleet vehicle accidents are costly on multiple levels – injury claims, repairs, employee morale, loss of productivity, company reputation and government interference, just to name a few.

According to the UK’s Department of Transport, an accident claim can cost an employer over £23,000 in medical care, legal expenses, lost productivity and property damage. That cost can exceed £216,000 when someone is injured, or £1.8 million when a fatality occurs.

 

"Two big contributors to accidents are maintenance issues and driving behaviour. A telematics solution can provide near real-time alerts on both vehicle maintenance issues as well as driving behaviour..."

 

Two big contributors to accidents are maintenance issues and driving behaviour. A telematics solution can provide near real-time alerts on both vehicle maintenance issues as well as driving behaviour. These alerts help to ensure that a vehicle is safe and roadworthy. And they provide business owners and fleet managers with solid data on driver performance that helps them better coach that driver to be safer on the road.

According to a National Highway Safety Administration (NHSA) study in the US, speeding is a factor in nearly 23 per cent of all at-fault large truck crashes. The same agency also reports that a tyre 25 per cent below its recommended pressure is three times more likely to be involved in a crash.

Telematics is also a natural companion for driver compliance factors – such as Hours of Service (HOS) – and can automate tracking processes, and help ensure that drivers are fresh and operating on proper/approved rest.

Simply knowing the location of a vehicle can also improve employee safety. If a truck and its driver don’t return when expected, their location can be determined, and, if needed, assistance can be provided.

Productivity.

Almost everything a telematics solution accomplishes leads back to productivity. One of the first things a supervisor will understand is the percentage of an employee’s day that is productive – are there inefficient in their day that can be improved upon? Better routing? If the vehicle spends a lot of time parked or idling, why is that? Telematics identifies symptoms that can be used to diagnose and correct a problem.

Dispatchers can easily identify the nearest possible respondent to a call by vehicle type, driver capabilities, and tools and parts available on board, ensuring that the response is swift and efficient.

The automation and incorporation of paperwork into mobile devices now allows records to be filed immediately during and upon completion of a job, eliminating countless hours of labour, filing and organising.

Finally, the age of compliance is upon us – HOS, tachographs, and Driver Vehicle Inspection Reports (DVIR) are a fact of life for commercial fleet managers. The same mobile devices that allow communication and form automation can also be used to streamline compliance reporting, ensure expedient interaction with DOT authorities, and eliminate paperwork almost entirely from the process – all driving productivity.

If a company has a large, decentralised mobile operation that is service- and/or delivery-based, a telematics solution can also take the entire fleet and plot out optimised routes that cut down on miles driven, wear and tear on a vehicle, fuel use and, most importantly, time. All working together to allow a fleet manager to accomplish more – for less.

Maintenance.

The two kinds of maintenance are: planned (scheduled/preventive) and unplanned (failure). The first can be managed. The second becomes a downtime event that sinks productivity, adds unexpected costs (repair and replacement) and stunts profitability because that asset and its driver are unable to work. It also has a downstream effect on everything from customer satisfaction to other vehicle/employee schedules. Luckily, the first can largely prevent the second.

 

"Telematics automates the tracking of vehicle maintenance schedules and eliminates many of the old labour-intensive tracking processes..."

 

Telematics automates the tracking of vehicle maintenance schedules and eliminates many of the old labour-intensive tracking processes. Alerts can be scheduled when it’s time to perform regular maintenance activities, as well as to warn a fleet manager if a vehicle is operating out of usual parameters, or if an original equipment manufacturer (OEM) solution triggers a diagnostic trouble code (DTC), indicating the potential for a failure and allowing maintenance staff to address it before it becomes a downtime event 

This also allows fleet managers to schedule planned maintenance activities at a time with the least impact on productive work.

These systems can generally track any and all factors that have a direct impact on uptime and performance. From oil temperatures and fluid levels to tyre pressure and the presence of AdBlue in diesel, a telematics solution can help to diagnose a maintenance issue before it becomes a more expensive problem.

 

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Previously on fieldservicenews.com we published an analysis of an exclusive research project run in partnership with Si2 Partners, WorkAmmo and Service People Matters where we revealed that 57% of field service organisations prefer to promote from within when appointing service managers.

Here in the second part of this analysis, we now explore in greater depth whether service organisations should be redefining the role of the service manager and ask what are the key attributes we should look for in service leaders of the future...

As field service operations continue to become an increasingly important part of revenue and customer engagement strategies for organisations of all sizes and in all verticals, it, of course, follows that those leading our field service teams are simultaneously becoming essential to the wider success of a business.

In our previous analysis of our research into development and recruitment trends within field service organisations we revealed that currently just over half of field service organisations prefer to promote from within when seeking to fill field service management vacancies, which is largely how things have been done historically - it is a sure bet that a large percentage of the service directors reading this report will have started their career as a technician in the field and this background and experience certainly has its advantages.

For a start when promoting someone from within they will, of course, have a much more intimate understanding of your organisation, your engineers’ workflows and perhaps most importantly your customer base. These are all factors that will help them hit the ground running in their new management role.

 

"Sometimes the best engineers, no matter how conscientious and efficient they may be when working in the field, just can’t make the step up into management - running a team requires a very different skill set than keeping your clients’ assets running..."

 

Yet, there is, of course, a flip side. Sometimes the best engineers, no matter how conscientious and efficient they may be when working in the field, just can’t make the step up into management - running a team requires a very different skill set than keeping your clients’ assets running.

Discussing this particular finding within the research in a recent episode of the Field Service Podcast Nick Frank, Founder of Si2 Partners commented:

“I think it is very natural, especially for companies who see service as a cost centre and as simply a way of generating customer loyalty, to see the people that they want to lead these functions within their own organisation.”

“Of course, these companies will be looking for people with the leadership skills - but they may also have a preference for someone who also knows the business.

“A large reason for that is is because service involves dealing with so many different stakeholders such as R&D and sales. Then it is also good to have someone who also knows the products and how those products work and how they operate in the customer environment.”

“So yes, if you are coming from a viewpoint of 'we are fundamentally there to keep the machines running and try to satisfy our customers’ then I’m not that surprised companies are still predominantly hiring from within.”

“But frankly, to be completely honest I’m a little bit disappointed that the percentage is still so high.”

 

"Service is becoming much, much more of a strategic growth driver..."

 

“The reason for that is because for me service is becoming much, much more of a strategic growth driver. Now that’s not to say it is the only drive, but it is certainly becoming recognised as an important strategic growth driver alongside  a number of other things.”

“When you adopt that approach, you’re suddenly your not really looking so much for that in-depth product knowledge in your service leadership - in fact as a leader you should always have people within your team who understand the technical side.”

So the key attributes you want to see in your service managers then become much more about business leadership elements. By this, I mean things such as strategic direction, decision making and getting teams aligned etc. Also, business acumen becomes far more important because when you start seeing service as a driver for growth you are no longer operating as a cost centre, you’re generating revenue and running a business - so in some ways, I was a little bit disappointed that so many are still hiring from within.”

 

"Business acumen becomes far more important because when you start seeing service as a driver for growth you are no longer operating as a cost centre, you’re generating revenue and running a business..."

 

“Who knows, maybe these companies are finding people with all those skills within their organisations, but I feel that it is more likely that they are opting to play it a bit safe, rather than being a bit more ambitious with where they want to take their service business.”

It is certainly an interesting topic for discussion and Frank raises many valid points, but is the fact that so many field service companies are still predominantly hiring from within indicative of field service companies erring on the side of caution, or is it perhaps the case that as with many other areas within field service we see patterns evolve at a slightly slower pace often due to the necessity of keeping what is invariably a mission-critical side of the business on relatively stable ground.

To help us understand this better and to dig deeper into the thinking behind many field service companies approach to hiring and developing new service managers, we will focus in this second part of our research analysis on the key trends amongst service organisations in terms what we attribute are key in the next generation of service leadership and how companies are nurturing them.

About The Research:

The research was conducted over a six week period reaching out to fieldservicenews.com subscribers as well as the respective audiences of our partners inviting recipients to complete a detailed online survey. In total there were 131 respondents.

In addition to this Field Service News Editor-in-Chief conducted a live polling session at the recent Field Service Connect event, held at the Belfry, UK which was hosted by WBR at which an additional 33 senior field service executives were present bringing the total respondent level to 164 field service professionals - a sufficiently large enough response base to provide a fairly robust snapshot of the current trends around recruitment and development amongst field service organisations today.

The respondents represented a diverse range of industries including; Heavy Manufacturing, Healthcare, Consumer Electronics, Power Generation and Facilities Management. There were respondents from all across the globe including the UK, Belgium, Germany, UAE, Canada, Spain and the USA and there were responses from companies of varying sizes ranging from those with less than 10 engineers through to those with over 800 engineers.

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Look out for the second part of this analysis where we will explore how a deeper exploration of the research findings correlated with Frank’s hypotheses as we dig deeper into the key characteristics field service companies are seeking when recruiting for new service managers…

 

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Field Service News Editor-in-Chief, Kris Oldland offers up some insight into how field service has become a core differentiator amongst competing organisations and how the trend towards advanced services is being driven by technology...

 

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This video was originally included in a video presentation run in partnership with Salesforce.

Download the full webcast @ http://fs-ne.ws/Y8ny30lsZUR

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Kris Oldland, Editor-in-Chief, Field Service News talks to Pål Rodseth, CEO of Asolvi about how he has brought together three key companies serving the SMB field servicer market across Europe, the meaning behind the new brand name Asolvi, how their customers are benefiting from the collectively shared learnings of a wider pool of peers and what the future holds for Asolvi.

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Though still a young company, SensLynx has quickly established itself as one of the foremost brands in the fleet and asset management industry.

Some of the credit goes to its co-founders, both of whom have long-standing track records as executives with other wireless entities and top tier fleet tracking companies. But SensLynx’s world-class GPS tracking hardware and software, as well as its full suite of mobile solutions for companies of all sizes, is another driving force behind its sterling reputation.

Since its inception, SensLynx has broadened its scope into many other IoT areas but sees a powerful opportunity for unlimited growth in the fleet tracking arena through a network of newly minted resale business owners.

IoT fleet management continues to be one of the fastest growing markets globally and is forecasted to be worth over $15 Billion by 2024.

Yet, it is also one of the most under-penetrated, opening a wide window for agile entrepreneurs in a broad range of verticals, such as Transportation, Plumbing, Heating/Air Conditioning, Landscaping, Electricians, Food Delivery, Utilities/Oil/Gas, Construction, Non-Emergency Medical Transport, Airports, Waste Management and Public Safety/Security.

The GMAP program is built around SensLynx’s bundled solution components, which include Fleet & Asset Tracking, Electronic Logging Device, Routing Application, Video/DashCam capture and Workforce Management for smartphones The new SensLynx GPS Management Accelerator Program (GMAP) can either enable start-ups or enhance existing business portfolios with the addition of tracking solutions. GMAP requires no upfront investment or inventory warehousing and is structured to deliver recurring revenue via new sales channels, while also being compatible with legacy business models to capitalize on similar customer profiles.

And because SensLynx white labels its solutions under certain criteria, entrepreneurs earn significant margin on hardware sales (up to 75%!) plus monthly subscription income from the customers they will own outright.

“We believe in the entrepreneurial spirit,” said Rob Garry, Co-Founder and CEO of SensLynx.  “Not only does this Accelerator Program help us grow our IoT Fleet sector on a grassroots level, it inspires others to strike out on their own or expand.”

The GMAP program is built around SensLynx’s bundled solution components, which include Fleet & Asset Tracking, Electronic Logging Device, Routing Application, Video/DashCam capture and Workforce Management for smartphones. At the heart is its comprehensive fleet/asset tracking software, packed with features like Data Handling, Parsing, Database, Mapping, Alerting, Reporting, Dispatch, Maintenance Logging, e-Logs, Local Posted Speed Limits, Addressing, Geofencing, Interstate Miles, Open API-based software and more.  The complete bundled solution with software, hardware and data connectivity is attractively packaged at one guaranteed monthly price.

SensLynx’s GMAP program provides every tool necessary for companies to succeed, including initial training, planning for roll-out, conducting telemarketing for launch, developing website content, providing custom branded marketing materials and online demo support, accessible through the streamlined GMAP Reseller Portal where businesses can also easily manage supply chain and customer accounts.

Tom Maguire, Co-Founder, COO and CMO of SensLynx said, “We’ve worked hard to create a superior, all-encompassing, yet simple program that will ensure our resellers see measurable results in record time with dedicated support from us.”

GPS Tracking makes customer fleets, assets and personnel safer and more productive while reducing operating costs and increasing profitability overall.  The SensLynx GPS Tracking Solution delivers everything and then some.  And the low expenditure, high return GMAP program allows sales professionals to become successful proprietors in an emerging industry rather than employees and augments existing businesses with a leading-edge technology. The future of IoT Fleet Management is very bright.

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Kris Oldland, Editor-in-Chief, Field Service News, reflects his thoughts on the impact of Artificial Intelligence in the field service sector during his leader in the May/June issue Field Service News...

A recurring theme across this leader across the first few issues of this year has been around the perfect storm of technology that has evolved around us and how the field service sector is embracing technology at a faster rate than ever...

In fact, I’ve often gone to great lengths to stress that it is not about any one technology, in particular, that is driving field service delivery to ever increasing heights but in fact how these technologies can come together in a service-centric ecosystem.

However, one thing that I keep coming back around to when I’m thinking about this topic is that there is actually one key technology that whilst isn’t perhaps a technology that we can explore on its own is in fact perhaps the most important piece of the puzzle.

That, of course, is Artificial Intelligence or AI.

Of course, in field service, AI is nothing that new.

It could be argued that the complex and intricate algorithms that sit within and enable fully optimised and dynamic scheduling engines to do their thing are AI. They learn, they adapt and they do it largely by themselves (if set up correctly). Sounds like AI to me, and dynamic scheduling has been around for a long time.

There is for sure some degree of truth in this, and AI is to some degrees a nice catchy name for a whole raft of different algorithms all designed to do something different. In some circles we throw in the words Machine Learning as well, which for those that know about this type of thing will almost certainly have a nuanced difference from AI - but speaking on behalf of laymen and troglodytes everywhere - I’m damned if I can work out what it is.

However, what I can do is get my head around just why AI is so important.

As I said earlier it is the various other technologies that are feeding into each other in one ecosystem that will allow us to drive our service standards forwards.

For example, IoT has been a huge talking point in the industry now for quite some time, but the sheer volume of data we now create has made it almost impossible to extrapolate meaningful insight from that data.

Step forward AI.

“Whilst meaningful insight is good to have, surely it becomes a moot point unless we can drive action from it as well...”Similarly, whilst meaningful insight is good to have, surely it becomes a moot point unless we can drive action from it as well. Automation is a phrase that comes in and out of the buzz-word lexicon but it has substance - ultimately we want to be able to automate where ever possible if we are to increase efficiency. But getting data flowing from a to b to trigger c can be a cumbersome and clunky task.

Again step forward AI.

Or how about within the contact centre space allowing your chat-bots to actually prove useful and complete some considerable triage before assessing whether a real human needs to get involved?

Or finally being able to see the true potential of smart-glasses for your engineers by enabling a voice control that actually works and contextual layering of Augmented Reality information when asked for.

Step forward once more AI.

You see it is my belief that AI will become the glue that binds all of our other technologies together. It is the brain that makes the body work.

And perhaps here is the perfect analogy because a brain all by itself is a fairly useless thing - just a big, pink, wrinkly sponge that can’t do anything at all - but give it a body and it can really make things happen.

The same goes for AI - it is not something we should consider as it’s own independent entity. But it is the secret sauce that will make everything else work properly.

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Kris Oldland, Editor-in-Chief, Field Service News talks to Ulrika Lindberg, Vice President, Global Service at Alfa Laval AB following on from her keynote presentation at the Spring Servitization Conference, about why having a customer-centric strategy is key to developing advanced services...

One thing stood out very clearly when Ulrika Lindberg, Vice President, Global Service at Alfa Laval AB posted up her organisations mission statement during her presentation at the Spring Servitization Conference, hosted by Copenhagen Business School and the Advanced Services Group, part of Aston University in the UK, that was that even within this small, yet carefully crafted sentence which captures Alfa Laval's corporate identity, it is clear the value they place on their customers.

On the surface, it certainly seemed indicative of an organisation that already had a clear Outside-In philosophy with regards to how they view their relationship with their customers.

Against a backdrop of a conference where advanced services are the sole talking point, I was keen to see just how important Lindberg and her colleagues at Alfa Laval believe such a mindset is when seeking to establish service as a core strategy within an organisation.

“How important is it? Well it’s in our DNA,” begins Lindberg.

"Whilst we have a wide range of products, we have an even wider range of industries that we serve and we would never be able to do that successfully unless we understood our customers’ needs..."

“Part of the reason why that is, is because whilst we have a wide range of products, we have an even wider range of industries that we serve and we would never be able to do that successfully unless we understood our customers’ needs within their industry.”

“We need to understand how our products can benefit an industry and our customers’ within that industry - and if we don’t have that understanding then we wouldn’t be successful. That is how our whole company has grown, by actually finding where our products could benefit certain industries and how.”

“Some of our products, although customised are not that unique, but one of the things we’ve been able to be successful at is tailoring those to a certain customer or a certain industry.”

It is this industry knowledge, largely fed by a desire to get close to their customers and understand the challenges that they face that has become an intrinsic part of how Alfa Laval approach growth and development - and this is something that ultimately builds upon itself over time.

“The more critical it becomes for us to understand the needs of the sector, the bigger the industry becomes to us and then the further knowledge and insights we develop - which embeds us even further into the industry and into our customer’s processes,” Lindberg explains.

Of course, operating across such a wide array of vertical sectors means that Alfa Laval have to establish a flexible approach to their service offerings as what is good for the goose is not always good for the gander. This is something that becomes particularly prescient when we look at servitization.

One of the big discussions across the conference and beyond is whether there is a need for either a customer pull or a market in decline and in need of disruption for a company to successfully introduce advanced services.

We all see that data is going to be hugely important in the future and we need to build our services around that but I think that we have a lot of work to do to build on that“I’m not sure,” Lindberg responds, giving the question consideration when I put it to her.

“I think certain industries are more advanced and it is easier in those. Equally some geographies are more advanced and it is easier there also. Personally, I would say the geography dimension might influence more whether a company is able to introduce advanced services.”

"I think across the globe, in terms of data and analysing data, there is a big interest but I still think we are just seeing the tip of the iceberg in terms of the complexity this is going to drive in terms of who is going to look at the data and what kind of advice are they going to be delivering?"

"If we look at predictive maintenance who is going to be calling the customer and saying the service is required? If we need to go in and stop the machine what power do we have to do this in a critical environment for the customers where that maintenance might have significant consequences for the customer.”

“I think we all see that data is going to be hugely important in the future and we need to build our services around that but I think that we have a lot of work to do to build on that. The appetite for this is big all around the globe, but the most critical question is 'are we ready?' That is the question I would suggest most companies need to be asking themselves.”

 

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In this excerpt from a recent Field Service News webcast sponsored by rugged computing specialist Xplore Technologies FSN Editor-in-Chief, Kris Oldland is joined by Steve Priestly and Cliff Adams of Xplore and Bob Ashenbrenner of Durable Mobility Technologies as they discuss some of the key questions around device choices field service organisations should be making including asking whether the lines between rugged and consumer are blurring, how to decide which form factor is right for your service technicians and just how often should field service companies be seeking to update the devices that they have deployed within the field.

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The full webcast is available to fieldservicenews.com subscribers and if you are a field service industry practitioner you may qualify for a complimentary industry subscription.

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Grundfos is a well-established company with a 180-year heritage and some active assets in the field over 30 years old still requiring maintenance, at this year’s Spring Servitization Conference they outlined why they see advanced services at the heart of their future...

Grundfos is an organisation with a long, proud and traditional history, yet at this year’s Spring Servitization Conference in Copenhagen, it was their vision of a brave new world, a world in which advanced services sit at the heart of their offering that was the focus of their presentation.

Thomas Rosenkilde Anderson, Group Vice President for Services at Grundfos A/S outlined the thinking behind the Danish Pump Manufacturers shift towards a servitized business alongside his colleague Marianne Kjeldgaard Knudsen, Senior Director, Head of Digital Commercial Offerings at Grundfos A/S.

“Service has already been embedded into the way we serve our customers,” Anderson begins as we sit down after his presentation and he gives me the opportunity to dig a little deeper into the conversation.

When we took the strategic decision from an executive level that now is the time to create a service business unit,“Previously, service was basically just a support function for our sales. It was also something that had evolved differently in each country we operate in. Sometimes it was well structured, sometimes it was very unstructured. So when we took the strategic decision from an executive level that now is the time to create a service business unit, it required a hell of a lot of planning and exercising on how to actually do it.”

“We actually held workshops across all countries across the globe in less than three months. We would be sitting together with the local country manager and their leadership teams and asking ‘how do you approach services here’, ‘who is doing service here?’”

“Then name by name, we went through the personnel undertaking any service work and identified those that were doing 50% of their role in a service capacity as someone who should become part of the service business unit. If they did less than 50% then they should stay where they are - and we did this all around the globe.”

“This was the first time that we really knew exactly how many service people we actually had. This was critical as when I first started I wanted to know what was our service business - how many people did we have and what was our profit margin, but we didn’t have easy access to those questions.”

It is interesting to note that at this point the service business was operated as a cost centre and it was Anderson’s drive to move the service operations to becoming a profit centre that demanded that such lack of visibility be overcome. However, moving to a profit centre was just part of the reasoning behind undertaking such a significant task as bringing transparency across the service operations globally for Grundfos.

However, one thing that Anderson stressed very clearly in his presentation was that such a significant shift in focus within an organisation is not possible overnight. It is a long iterative process - in his presentation, Anderson outlined Grundfos’ own roadmap which stretches across ten years.

Yet, when Anderson first arrived having transitioned from the high-tech sector, this was not necessarily the case.

We were selling basic service contracts in 15 different ways across 60 different locations across the globe, so there were a lot of basics such as tools and processes that we needed to fix first“Coming from a high-tech background I was used to working at a much faster pace, so such introducing change over such a long period wasn’t the original plan,” he explains.

“However, I realised that here the starting point was a bit more unstable, we were selling basic service contracts in 15 different ways across 60 different locations across the globe, so there were a lot of basics such as tools and processes that we needed to fix first. If we had tried to do everything at once and bring very advanced services to the market in one go there would have been chaos”

“In short, we needed to build a solid foundation before we could move forwards further and that takes time,” he adds.

The next phase of this development Anderson explains is to build financial transparency.

“We need to get a firm understanding and have total transparency on what is the cost of service, what revenue are we currently making from services? Then we can have a firm grasp of how service is impacting on our bottom line,” Anderson continued.

“Once this is all in place then we can start the big task of really fully developing our service portfolio and of course building out our tools, processes and customer support and getting that standardised across the globe.

“Then, of course, there is the consideration around the people part of this equation. Service businesses are people businesses. We need to make sure we take care of our people and that we attract the best people - so a lot of our investments are going into leadership positions.”

“We are looking at leadership development, financial training for those that will have commercial responsibilities and technical training for those who are focussed in that part of the sphere.”

What is clear is that whilst the end goal of a servitized business promises great opportunities the road to that goal is long and complex.

However, Anderson and his colleagues have a very thorough and well-defined roadmap to guide them on their way - something that it is essential for any company looking to follow in their path develop for themselves before they start the journey themselves.

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