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Every year, the team at Copperberg AB, producers of the forthcoming Aftermarket Business Platform gather the brightest service leaders from the largest manufacturing companies and from all corners of Europe to dissect the ongoing service transformation and share the key to a successful servitization journey.

It is a networking experience which has proven to be critical for defining new business models that can allow field service companies to respond to changing customer expectations, which are moving from ownership to outcome-based solutions.

One such service leader is Carl-Henrik Sjölund, Global Consultancy Service Director at SECO TOOLS, whom Copperberg recently interviewed for a new eBook in order to put together an eBook on Servitization that shares some practical steps towards a successful servitization journey.

Here, we take a look at some of that advice...

 

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Want to know more? Register to access Copperberg's Servitization eBook @ http://fs-ne.ws/CAjc30lXctz

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10 steps to servitization success... 

Within the eBook Sjölund outlines what he sees as 10 key steps that field service companies should consider when approaching shifting to a servitized business model.

These are:

1. Define the customer process where your product is in use
2. Define the components in the close world around your product
3. Define the challenges for efficient use, and cost of inefficient use
4. If necessary, define your own core competence (know-how, not product)
5. Match the customers’ challenges with the biggest cost of “inefficient use of components” with your best core competence to “fix it"
6. Check customer interest of your new service by using real proof of concept. Could be fake landing pages for services where people can click for interest to buy, subscribe or just know more.
7. If you find good interest for your new service, make a business case for profitability and start
8. Build a service organization by parallel “selling and recruiting”
9. Use Aftermarket Business Platform to communicate your strategy and you get many interested system suppliers that can help you to enable and control the business
10. Enjoy the success!

 

Hindsight with 20/20 vision:

Reflecting back on his own journey, one of the core challenges in making a transition to a business strategy he had experienced was the difference between the traditional sales approach found in product-focused sales compared to the more nuanced approach required to sell complicated, yet highly profitable outcome-based service-centric contracts. As Sjölund commented:

"The journey was more or less OK except that we had too much trust in the existing product sales organization to sell the new services."

"They just didn’t understand it, he added. "Instead we found a few of our own salespeople for service sales with different backgrounds to understand the complete customer journey (challenge) and communicate with the highest management level about this. It’s important to bring people from the product service organization along to learn and pick the best.

 

The major trends of Servitization:

The eBook also draws on the wider pool of senior Service Professionals that attend the Aftermarket Business Platform and as such outlines some of the key trends that are becoming prevalent amongst Manufacturers across Europe.

These include:

• Manufacturing companies are faced with smaller and smaller batch sizes because of faster and faster development cycles.
• This leads to challenges to estimate costs earlier, prepare for the unknown and have very fast set-up of machine. Added to that, the need to produce good parts directly when there are orders means there is no time for optimization.
• Companies lack staff with the right skills and working methods for this.
• Many suppliers are promising industry 4.0 ready-to-use solutions without success support and this leads to bad experiences.

 

The technology of Servitization: 

Of course, as we have discussed many times here at fieldservicenews.com technology is a major factor in enabling the growth of servitized business strategies and models.

However, for Sjölund, the sheer volume of innovative technology that is empowering field service organisations to push ever further the boundaries of service excellence, a path that logically leads towards servitization, can be something of a double-edged sword.

"Technology is part of the problem: what is good and what to do?" He asks. "We already tried out a lot of technology (AI, Robotics, 3D Printing, AR/VR) to know what is usable and what is not."

"Most important change according to my experience so far is the use of big data mining to predict the future and access virtual good advices combined with virtual collaboration between users for “reality checks” and confirmation between professionals," Sjölund continues.

"This needs, however, data generating systems (IoT) in the workshop and well managed virtual communities. This is today not yet spread and partly not even available."

 

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Want to know more? Register to access Copperberg's Servitization eBook @ http://fs-ne.ws/CAjc30lXctz

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As a cash cow of the service division, how prepared is your spare parts business to embrace increasing pressure from customer expectations, changing trade agreements, and intra-connected new technologies?  How will these and more affect your parts pricing strategies, logistics network, and warehousing management?

If you can take this 3-minute survey to help us build an accurate picture of current industry sentiment and the key trends in this area it would be hugely appreciated. Please take a few minutes to take @  https://www.surveymonkey.com/r/parts2019

Upon closure of the survey, we will be working alongside Coppeberg who produce the excellent Spare Parts Business Forums both within the UK and Europe to create an ebook of the survey results, with expert commentary from industry insiders, as a benchmarking tool for you to evaluate the direction of your spare parts business - so take part now and keep your eyes out for this exciting forthcoming report!

 

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Despite huge leaps forward in technology coming at us left right and centre, the companies that will get the most from a process of digitalisation are those that keep fundamental, traditional values of putting the customer first at the core of their ethos writes Nick Frank, Managing Partner, Si2 Partners.

Those companies that are successful in implementing a digital-led growth strategy don’t bother with the jargon of the moment!

The leaders in this field start with the basics – a deep understanding of their customer’s problems and then work backwards to offer solutions that create value or reduce risk. As part of the journey, they look hard at their own DNA and take action to fill their capability shortfalls. They identify the actual data they need and then automate the data collection/analytics process to deliver scalable solutions.

Businesses starting this shift to service led growth would do well to note that successful companies do not focus on the rhetoric, but rather have an intense obsession with how to make their customers more successful. The lesson to be learned is using the latest jargon does not put you ahead of the game. Believe this and you might not realise that you are leaving your business ‘naked’ to competitive actions, just like the emperor in the children’s story.

In the last year, I have heard this same story time and time again. At the recent After Market conference in Hamburg, we heard speakers from SKF, Outotec, Caterpillar and Serco tools all starting with the customer problem, defining the customer pain map in terms of real money.

Talk to experts in machine learning or knowledge management and one hear’s exactly the same story. Start with the business problem or the KPI and then work back to the data solution. For some, this means adding services such as analytics or remote access to products to create customer value. Others go further and no longer sell a product but an outcome such as leasing a tractor unit of a truck by the mile.

In all the success stories there is a common theme. Each company is able to articulate in terms of money, why their customers should buy their solutions.

They almost all do this following what I call the Value Iceberg principal.

The cost of the product or service you provide can be clearly seen above the waterline.

However, from the customers perspective, there are many other costs within their business below the ‘waterline’. Some are easy to define such as labour, material throughput and energy. Others are much harder such as overheads or obsolescence. And then there is RISK and UNCERTAINTY that are extremely intangible and frightening when quantified, but which have a strong emotional impact on companies buying decisions.

The most profitable manufacturing companies understand the iceberg very well. By adding services to their products and creating integrated solutions, there exists a huge opportunity to capture more value that is hidden deep within the customers’ business processes. Take the truck example. The tractor unit represents maybe only 8% of the annual running costs. Below the waterline 50% of the operating costs is the fuel used, 25% the driver and profit accounts for perhaps 2-3%.

Over 20 years ago, MAN truck’s UK distributor identified this value and added maintenance services to their portfolio that were designed to reduce fuel consumption by 10% and so double the profitability of a tractor unit over the year.

Using telematics technology in the cab, they were able to manage the running costs so well, they could shift their business model to effectively lease trucks by the mile. The resulting value argument was so compelling, that over a 20-year period their business grew from £50M to 550M. The other OEM’s are now following!

For leaders of change, this deep, almost obsessive understanding of customer value, gives them the confidence to know in what businesses and technologies to invest. It allows them to understand whether customers can afford more outcome-based services and how far their business should move along the Product to Service continuum.

This value-based phenomenon is also very real when we start to look at the UK macroeconomic viewpoint. When we redefine manufacturing as a product plus associated services, a 2016 study by Cranfield University estimated this to make up 16.8% of the UK Gross Value Added(GVA) versus the traditional definition of manufacturing at 10% GVA

Perhaps this realization that our view of manufacturing is fundamentally changing, is the reason why many people focus on the digital or IR4 technologies, forgetting that these are only enablers of change. In most part, it is through services that the technologies add new value and not the other way around. But sadly many companies have yet to grasp this notion. The reality is that unless they do, many players will be left wondering why digitization and IR4 have never quite delivered on the promise!

If you would like to know more about your Value Iceberg to drive your investment priorities, then you can contact Nick at nick.frank@si2partners.com

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Field service management software is transforming trade/ speciality contracting as more revenue comes from service contracts and maintenance...

IFS, the global enterprise applications company, has released a primary research study revealing that legacy software solutions used by speciality and trade contractors could prevent them from profitably delivering aftermarket services to their customers.

These contractors are finding aftermarket service an important source of revenue growth as project owners wish to outsource asset maintenance to the companies that constructed, fabricated or installed the asset on their behalf.

The survey of 200 HVAC (heating, ventilation and air conditioning), plumbing, electrical, building automation, low voltage electrical, signage, overhead door and other speciality contractors paints a picture of an industry in the grips of a digital transformation.

85 percent of study respondents said they have maintenance contracts with customer-specific terms, service level agreements (SLAs) and pricing, but only 14 percent said their software facilitated these contracts “very well.”

85 percent of study respondents said they have maintenance contracts with customer-specific terms, service level agreements (SLAs) and pricing, but only 14 percent said their software facilitated these contracts “very well.”Many respondent companies did not enable field technicians to improve the customer experience or drive new revenue. Only 38 percent said technicians could access information on the terms of the contract including customer-specific requirements. Only 15 percent of respondents have the technology to empower field technicians to upsell or sell new service contracts, only 25 percent could issue new estimates and 23 percent could get customer approval for an estimate.

89 percent of respondents said they use subcontractors, but just over 10 percent have adopted the current technology by giving their subcontractors a mobile app to interact with their field service management software.

Respondents reporting greater readiness for digital transformation—Digital Transformation Leaders—are nine times as likely to say their software prepares them well for the essential process of service contract administration. Only 30 percent of Digital Transformation Laggards were even offering customer-specific contracts, while Digital Transformation Leaders were more than nine times as likely to say their software prepared them very well to support these contractual obligations with specific requirements for each customer.

Our data shows that residential contractors seem to be ahead of commercial contractors when it comes to Digital Transformation.IFS Industry Director for Field Service Management Mark Brewer said, “These trade and speciality contractors are at an inflexion point with field service management software. Many of them have invested in some level of field service technology to support aftermarket service work. Often, this same software helps them manage construction crews during the initial project. But now they are at that point where they need to become more attentive to customer-specific SLAs. They need to upsell and drive more sales from each customer and improve the customer experience.”

IFS Senior Product Evangelist for Field Service Management Tom DeVroy added, “The adage is that the future is here—it is just not evenly distributed. This is true for trade contracting, where our data shows that residential contractors seem to be ahead of commercial contractors when it comes to Digital Transformation.

This is mostly the result of customer demands that have pushed them towards software that optimizes the field service schedule, enabling them to give an accurate estimated time of arrival and issue proactive customer alerting. They are further ahead on automated subcontractor management, automated parts ordering and fulfilment, and field-based, point-of-service payment processing. Contractors engaged strictly in commercial work need to catch up as their own customer expectations evolve.”

Download the entire study, Are Trade/Specialty Contractors Leveraging Field Service Software for Aftermarket Service? @ fs-ne.ws/MNNo30inF0F

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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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At the recent AfterMarket conference in Amsterdam Field Service News Editor, Kris Oldland hosted a panel debate with three speakers key to servitization; Professor Tim Baines, Aston University a leading proponent of the movement, Brendan Viggers, Product and Sales Support for IFS Aerospace & Defence division who has worked closely with a number of companies such as Emirates on moving towards a servitization model and Koen D’Haeyer, Global Manager Service Development & Technical Services Lely who had been through the journey himself with Dutch Farm Technology company.

In the first part of this feature we looked at whether servitization was limited to just large size companies and how to manage the change involved in moving to such a radical new approach. Here in the final part of this feature the debate continues....

Kris Oldland: There is a point there that you touch on briefly about not just getting the buy in from the internal teams but also from the customer. Data can play a significant part in servitization and that presents a challenge in it’s own right, as data is very precious currently. How can we overcome that and encourage our customers to let us access their data?

Koen Dyaeyer: To start I’ll mention one thing, there is an aspect on this benchmarking data with your customers which is of course, that you are obliged to do this anonymously that is clear. You can tell the a customer ‘look this is your data this is the rest of the market and this is the variation’  but you cannot be open to all extents.

But the value is not in knowing exactly who is doing what, the value is in comparing yourself with others and knowing what to learn, and how to then improve.

On the other hand it is also true that you have to select your targets when your developing these value propositions. This approach may not fit every type of customer immediately. I would say twenty to thirty percent may adopt really quickly, really embrace it and are immeditely fond of the concept, another twenty to thirty percent will be lagging – it is not in their mindset and then the part in the middle is where you have to push. And when you have pushed and achieved the 80% mark then you can approach the laggards.  That is more or less how we approached it so we didn’t lose to much time and energy in developing it.

 

Brendan Viggers:  Certainly in the defence market the classic contracting model is performance based logistics where the OEM is providing a platform and then the through life support of the platform as well, so all the servicing that goes with it and they will then offer a SLA or guarantee the fleet availability for 80% of that time.

What we are finding is there is a need for partnership between the OEM and the customer. Because the OEM needs to know how the customer is driving that vehicle. If he is taking that tank and forcing it across a plain over the bounds of normal operational use then it’s going to cost that OEM more to service it. So can be a win-win but if you want that platform you need to be prepared to operate within acceptable bounds.

Koen Dyaeyer: To add to Brendan’s point there I would add that in our case we are looking for the win-win-win because we are in between but if we focusses on the win-win-wins we can really drive forward.

Tim Baines: This debate about ownership of data has been going on for over 10 years. To my mind its the use of the data that is important. I’ve seen it in Xerox’s case where they will turn around and say OK the contract price is this for an advanced services contract on print management but if you let us share that data and use that data it’ll come down to this.

Audience Question: What would you say are your most important KPIs to actually monitor and drive your service business today?

Koen Dyaeyer: The most important group of KPIs are the service profitability KPI’s we have data on overall revenues and data on cost indicators. We cannot always be exact with th eservice cost indicators to the penny but we know what it is likely to be. So the service profitability is a major KPI.

Then there is customer satisfaction. The first question we ask in every technical assessment is what type of customer do you think this is and also is he satisfied? So we link that data to understand the relationship of data to customer satisfaction.

 

Then for the operations we also have the performance KPIs of the product so mean time between failure, mean time between breakdown, some performance indicators specific to our industry so number of failed milkings for example that help us see if the farm management is running smoothly. So performance, customer satisfaction  and service profitability – these are the three main KPI group we use.

Kris Oldland: Have these KPIs evolved as you have moved through this process of servitization? Have they evolved as you gather more data and therefore Insight into your customers?

Koen Dyaeyer: Actually we started with maybe 8 or 10 basic KPIs and what we started to get excited about was the analysis we could do with them. We were able to look at the years of technical experience and see how that aligned to customer experience and service profitability. We learned a lot out of that initial process and then some new KPIs grew out of it .

Tim Baines: I may have seen something slightly different in some of the companies that I have looked at. A quote that comes to mind is by Henry Ford who said profit is a result of service. Therefore when I look at people like Alstom the number one KPI is around customer experience.

That means the customer experience, which in their instance would be the amount of time a customer is waiting because a train has failed to show up, that customer experience is the number one KPI.

For Alstom that’s key because it relates directly to the customers key core business process, which is about moving people. Then there are KPIs around the customer experience when somebody is onboard the train and so on. It’s the manufacturer that then translates those to mean time to failure etc.

What is very interesting to me coming from a world of production, where the main KPIs were cost, quality and  delivery and everything was around that then moving to the service world where KPIs are centred around the business processes of the customer, and because those customers differ so must those KPIs differ.

 

Audience Question: I am understanding this correctly that the fourth industrial revolution is about re using our IP and industrial assets to serve customers better?

Tim Baines: I think that we are looking at a very special form of organisation. What is particular about the technology innovators you see here is that if they have the internal procedures in place to capture how the product is performing in the field and then feedback to the design process so the product becomes better suited for application, then that innovation loop is what is distinctive about the manufacturing companies and is different to technology innovators.

Ultimately it means language like through life support  are actually a characteristic of the old product mentality, we’re talking about a capability being delivered. Indeed even the notion of After-sales service is a product based concept because we are thinking of the notion of  producing something selling it transactionally and then after sales.

Another point to make is that we talk about servitization from the point of view of a manufacturing company, a company that’s got technology innovation capabilities delivering advanced services. But we also have the phenomena of companies which are service companies, technology integrators, developing their ability to technology innovate.

So there are two ways that servitization can arise. Predominantly we talk about a move from manufacturers to manufacturers that deliver service but we can also talk about service providers developing their abilities to redesign products.

 

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Servitization has been talked about for many years but all of a sudden it seems to be a key topic on the agenda of many manufacturing companies and also amongst may service based organisations as well. For those companies that tread the path being dubbed the fourth paradigm it will mean a complete rethinking of how they view field service. 

At the recent AfterMarket conference in Amsterdam Field Service News Editor, Kris Oldland hosted a panel debate with three speakers key to servitization; Professor Tim Baines, Aston University a leading proponent of the movement, Brendan Viggers, Product and Sales Support for IFS Aerospace & Defence division who has worked closely with a number of companies such as Emirates on moving towards a servitization model and Koen D’Haeyer, Global Manager Service Development & Technical Services Lely who had been through the journey himself with Dutch Farm Technology company.

Kris Oldland: The case studies we hear around servitization to date all seem to involve large organisations with quite complex or evolved business models already. Is it the case that servitization only applies to companies that have the size to make it work?

Tim Baines: I’ve worked with quite a few smaller companies which has been quite interesting first of all to break away from the myth that servitization is just about large companies. By this time next year we will have got around 70 companies within our region of the UK the west midlands engaged in servitization.

One company which helps us breakaway from this idea that it is all about delivering complex products is a company that actually delivering pallets, regular wooden pallets and these pallets are used in the automotive industry to move windscreens and cars and things like this. There business model before we got involved was they would make a pallet, sell the pallets.

 

But what they are doing now is slowly but surely getting into the space where they are making the pallets, they are designing the pallets for the application, they are working with the customer to make sure the pallets are well suited, they are actually putting the pallet in the system, they’re tracking the pallets, they are taking care of stock control and slowly and surely they are moving to a position where they are becoming the business process outsourcing partner for the customers own material handling system.

Whilst this may not be a perfectly clinical example of servitization by some definitions, but nevertheless it is a good example of a small company that has adopted the principles of servitization and then put them into practice.

Koen Dyaeyer: I couldn’t agree me that smaller companies companies servitization can work. I have a history in smaller to medium sized companies, and we went drastically through servitization aspects even by a make and buy proposition through to quality assurance etc so it’s applicable for sure in all industries.

What I would say is that technology there is an extra opportunity as in complexity it is very much possible to create the value of your expertise which is also holds true of course.

Audience Question: Whenever we decide to do any transformation a big chunk of it is behavioural change, besides the software and the hardware how to you trigger the behavioural change within a company?

Brendan Viggers: For us its understanding the processes, being able to model those processes and work as a team to fully understand what the different functions and responsibilities you have within that team. But its also being able to drive down to having a piece of data that will ultimately help you deliver that new change.

Koen Dyaeyer: My experience is set directions clearly for each individual so people understand what is needed from them to achieve the goal. Also motivate people, there is a study that says people only get a message when it is [quote float="right"]There is a study that says people only get a message when it is repeated twenty three times. That’s often a slogan that I use, just repeat it and to be honest sometimes it may need to be repeated forty six times

repeated twenty three times. That’s often a slogan that I use, just repeat it and to be honest sometimes it may need to be repeated forty six times but energise it, make it engaging.

 

Tim Baines: The companies that I studied when we wrote made to serve, were all companies that were pulled into the delivery of advanced service by their customers. In some instances companies they were pulled into this space kicking and screaming, they were product based companies and they were given no option.

What’s interesting to me now is this second wave of organisations where in some instances you are not being pulled into this space by your customers, rather your looking at the benefits that organisations such as Rolls Royce and Caterpillar have got from servitization and you want a piece of that action. But you have a different set of challenges. Some of the challenges remain the same but some are very different.

For example you have to educate your customers, about the opportunity, this is the theory here, an innovation theory showing us the difference between market pull and technology push. You’ve now got to educate your customers. You’ve got to get the buy in of the whole organisation to the servitization approach. Some of the processes and tools that are out there are great once you’ve started down the path but really to start to get the traction in the first instance, to really get people at board level to buy-in to the idea is one of the biggest issues.

 

How to inspire the senior management, how to get the messaging about what it is that servitization is about both internally and externally, how to frame servitization so they know what you are talking about. Going to customers and stimulating a customer demand which then pulls everything together.

Look out for more from this debate coming soon... 

With field service going through a period of continual evolution there are a growing number of events dedicated to the industry that give you the opportunity to here from vendors, industry leaders and your peers to help you stay abreast of the latest trends. Here we look at some of the key events across 2015…
 

26 February, 2015

Enterprise Mobile Technology 2015, Hilton at St George’s Park, Burton on Trent

This is a unique one-day event bringing together leading executives and key decision makers, partners and suppliers from the mobile services industries. The event is designed to provide a platform to discuss smarter technologies for a connected mobile workforce. You’ll hear from industry experts, explore new and emerging technologies and also have the opportunity to network with peers and colleagues. From discussions about the tablet productivity evolution to connectivity in the field and transforming mobile operations, this is a must-attend event. Click here for more information 
 

23 – 25 March 2015

Field Service Medical Europe, Conrad Dublin, Dublin, Ireland

Across Europe, medical device manufacturers want to develop proactive customer service & a surefire way to keep pace with remote technology advancement. Until now, they had no way to share their ideas for the future in an open, collaborative environment. So the team behind Field Service Europe have created Europe’s most interactive forum for service & support executives – a 3 day meeting with the real leaders of the industry helping to transform their business in the digital age.

This event features practitioner only workshops, one-on-one speaker meetings, and is focused around networking to build career-long relationships. Also, as small and medium sized organisations face a unique set of challenges, there are separate sets of workshops for similar companies to collaborate and share their insights. Click here for more information

 

16 April

The Service Community. Venue TBA

“The Service Community is made up of people interested in finding out more about the service industry from its participants. The Service Community aims to provide opportunities to find out what practices have worked for others, and what hasn’t worked, and why; to move away from the theory of what could be done by examining what others do and evaluate successful practices. Meetings (no fee is charged) will aim to provide content which doesn’t appear to be readily available, and to stimulate and inform in a format that is easy to access and use, and relevant to the user.” – Steve Downton

Founded by the late Steve Downton, The Service Community is a non-profit organisation that seeks to drive service improvements and innovation through collaboration.

Run by service professionals for service professionals The Service Community runs a series of events across the year with expert presentations from some of the UKs leading service professionals  from a wide array of industries. Recent speakers include:

Mark Rawding, Coca-Cola Enterprises, Andy Beer, Pitney Bowes, Martin Gilday, Elekta, Martin Summerhayes, Fujitsu, Graham Coyne, Siemans

Attendance is free for all Service Professionals and each event is not only a fantastic opportunity to hear of best-practices from leading industry professionals but also to network with other service professionals across the day. Click here for more information
 

2 - 3 June 

Field Service Forum, Sheraton Hotel, Amsterdam

The 2nd Annual Edition will take place June 2nd-3rd, at the Sheraton Airport Amsterdam. The two-days interactive event will gather 150+ service professionals from cross-industry sectors and from all corners of Europe, and will feature case studies from organisations such as ABB, Siemens Wind Power, Nestle Nespresso, Pentair, Volvo Construction Equipment, and many more. Click here for more information

 

16-18 June

Service Management Expo Exel Centre, London

Service Management Expo returns to London’s ExCeL this summer, taking place from 16-18 June 2015, Europe’s only dedicated exhibition for the field service market will be co-located with Facilities Show as part of the Protection & Management Series.

Now in its 31st year, Service Management Expo is the annual industry event that brings together the latest information and the most up-to-date products and services for those working within service management, logistics, fleet management, operations and IT.

Service Management Expo will host the dedicated Field Service Solutions Theatre in partnership with Field Service News.  A full educational programme will run across the three days, mixing interviews with influential industry figures, best practice case studies and thought provoking panel debates.   The theatre will also host daily networking sessions allowing you to mingle with peers, discuss topical issues and catch up with old friends. Click here for more information
 

19 – 21 October

Field Service Europe, Movenpick Hotel Amsterdam

Field Service Europe is a forum for senior-level service executives from leading global organisations to share best practices on today’s most pressing issues including adopting a proactive and preventive approach to customer management, streamlining aftersales business to radically improve productivity, and utilising advanced remote diagnostics technology to increase efficiency and customer loyalty.

The peer-driven conference is packed with in-depth workshops and interactive roundtable discussions as well as unparalleled networking opportunities like the Women-in-Service Luncheon and VIP Think Tank. Click here for more information
 

21 to 23 October

Aftermarket Europe,  Grand Hotel Huis ter Duin, Noordwijk

The 9th edition will take place October 21st - 23rd in the Netherlands. It is the leading European event for senior aftermarket executives, attracting 200+ participants from global organisations. Over the course of three interactive days of content and networking, participants will be confronted with best practices and solutions to current challenges. Click here for more information

 
 

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