ARCHIVE FOR THE ‘connected-products’ CATEGORY

Aly Pinder outlines how the growing trend for connected products is set to revolutionise the way we approach service...

What is the value of a connected product or asset? Some might argue, connected products allow a manufacturer to capture a wealth of product data which can be used to make better products in the future.

Others might state, connected products open a window into customer usage data which can help manufacturers and sales teams target customers more effectively driving increased revenues.

These are two important use cases and show some of the promise of the Internet of Things (IoT) and connected products.

But I think there is an even more impactful area of value from the ability to connect to products – field service.

Now you may be thinking, of course, it’s all of field service, as you peruse the articles of Field Service News. But even if I am preaching to the choir, the impact that connected products can have on the ability for manufacturers to transform the way they deliver field service and customer support is not necessarily a given.

However, as more products and assets are connected I believe there is a real opportunity to see great leaps in field service and the transformation of the way manufacturers interact with the end customer.

Three opportunities, in particular, jump out as big wins for the future of field service as a result of data captured from connected products and equipment:

 

Finally, predict and not react

The journey from reactive field service to proactive and predictive persists for many manufacturers. I don’t think this is necessarily a battle which will ever reach a state of 100% predictive service, and nor should it.

But I do think there is a great opportunity to take the volumes of data being captured in real-time to make smarter decisions in field service which can lead to a different balance of reactive, proactive, and predictive support.

Also, data gleaned from connected products can help make reactive service calls more valuable and efficient as a technician should have the answers to the issue without having to guess or lean on gut-feel.

 

Service without a truck roll.

As noted in recent IDC research, by 2020, 50% of global OEMs with connected service offerings will have incorporated augmented service execution and/or remote management thus improving service margins by up to 30%.

The ability to resolve issues remotely or to utilize a centralized expert to help a customer solve a problem can be transformative for field service. This type of model could help service leaders allocate their seasoned technicians to the most complex problems as opposed to just an issue within their geographic footprint.

Connected products enable a manufacturer to know what is wrong in advance of a response and ensure the right response is the one scheduled for a scarce set of resources.

 

Focus on the value of the human interaction.

When we think about the negatives associated with the rise of the machines (i.e., Terminator), we often miss something.

This should be an opportunity not a threat.

Connected products which ‘talk’ to each other provides an opening for field technicians to focus on the humans while they are on site as opposed to spending time looking for information, turning wrenches, or filling out paperwork.

Obviously, this will mean manufacturers and service leaders will need to train their technicians on a new set of skills and activities. But as the workforce and economies evolve, the skill of interaction will be in more demand and provide more value in the customer relationship.

And manufacturers which leverage connected product data to have their field teams focus on the customer will succeed.

The promise and value gained from connected products is more than just additional data points.

As manufacturers look to transform their organizations and teams, connected products should be the catalyst for a journey of new ways of delivering value to customers and not the end result of a technology investment.

Field service should be the aspect of the business which sees the biggest gains from connected products and equipment.

The possibilities are endless, and I look forward to seeing where manufacturers take this technology as it extends beyond IT and engineering to the field.

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Aly Pinder is Program Director - Service Innovation & Connected Products, IDC Manufacturing Insights

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Titos Anastassacos from Si2Partners shares with us some interesting insight on Augmented Reality from their recent research-based reports...

Technology is changing field service rapidly.

In the not too distant future Smart Connected Products will be self-diagnosing; Maintenance will become, almost exclusively, predictive; Spare parts will be 3D printed; And humans will interact at a deeper level with machines through Augmented Reality and Digital Twins, whether the machine is in the same room or on the other side of the planet.

The nature of the service business will shift from technical labour and logistics to knowledge management and exchange. Service delivery will change drastically as will the nature of competition and business models.

 

"The nature of the service business will shift from technical labour and logistics to knowledge management and exchange. Service delivery will change drastically as will the nature of competition and business models..."

 

But if the “end-state” medium term can be discerned quite clearly, getting there poses significant challenges.

So, at a Si2 Partners, we developed a series of survey-based management reports, to shine a spotlight into service businesses’ efforts to grasp the opportunities of digitization while dealing with the challenges. We then draw conclusions and recommend the best ways forward. The first report on Augmented Reality is available now, the next report on Predictive Maintenance is due by the end of the year.

The first public demonstration of AR was in 1998 during ESPN’s coverage of a football game: Generation and display of the yellow first down line. The line stayed fixed within the coordinates of the playing field. It was not physically present on the field and was visible only to the television audience.

But from that simple application, only 15 years later, Gartner was predicting that companies would be increasing their profits by over $1 billion annually -by 2017- through the application of AR in their field service business.

Things, of course, are not so simple. Reducing costs does not directly translate into increased profits.

That depends on prices and we know that digitization tends to make them drop, sometimes to zero -think of what happened to chemical photography. But even if we only consider costs, AR is clearly important, in many ways transformational, technology with a potentially very powerful impact.

So, are companies adopting AR for field service? Our survey showed that they are.

Most expect significant cost savings and productivity improvements through AR, mainly in engineering time and travel cost -and, interestingly, smaller companies are at least as much engaged with the technology as larger ones: Upfront investment can be low, and it can be implemented quickly and stand-alone (at least initially).

Importantly, it may help reduce pressure on scarce, highly qualified, and expensive engineering resources, while simultaneously improving the cost-effective support of remote customers (smaller companies are less likely to have extensive service networks).

Overall, we found that while less than 1/3 of respondents already used AR, and, of those, the majority had introduced it over the past 12 months, another third planned to introduce it over the coming 12 months. This indicates an accelerating trend.

Of course, for users, it has not been all smooth sailing. Challenges are numerous: For example, it turns out that connectivity at customer sites is a significant issue, which hampers the use of the technology. But technical problems are normal at this stage of introduction.

Far more important are managerial challenges.

For example, as always, one size does not fit all: The most commonly reported use case is field technicians receiving AR-based support by experienced engineers from a remote central hub.

 

"Better applications for such cases may be pooling AR-based support, providing technical information through “knowledge-libraries”..."

 

This may help companies with large field service workforces (possibly with high turn-over rates or fewer qualifications) supporting standardized equipment. It is not much help to vendors of highly complex equipment whose field engineers are already highly experienced and qualified themselves.

In fact, it may be even counter-productive, slowing things down or reducing acceptance.

Better applications for such cases may be pooling AR-based support, providing technical information through “knowledge-libraries”, particularly on rarely encountered problems or legacy equipment, or integrating AR with the IoT, so that operational data can provide real-time context to engineers and support for diagnostics.

However, such applications require investment in digital content, something that many AR users have often not considered, as well as a process of experimentation and development.

Another finding is that following implementation of AR, many managements don’t take the necessary action to lock-in the AR benefits by pushing through change in the support and field service processes. For example, few companies eliminate technical manuals and drawings from a field engineer’s toolbox, delaying the necessary adjustments.

And, while many companies market their AR capability to customers, few have developed AR-based offerings. Yet our survey shows that customers would welcome AR-based support if it would help to reduce costs and improve performance, notwithstanding issues of confidentiality or privacy.

The process to integrate AR into a company’s mode of operations and to maximize its benefits will, as for any new technology, be arduous and bumpy. But the impact on costs and productivity is becoming clear. Though most don’t yet formally track it, 72% of our respondents said that AR is on par with or has exceeded expectations.

Augmented Reality in Service: Ready for Prime Time? Visit the Service in Industry Hub Shop to download the flyer or purchase the report. For more information contact titos.anastassacos@si2partners.com or visit Si2Partners

 

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Good-bye products, hello services? The IoT and connected products means companies will  need to monetise IoTs, says consultant Nick Frank.

‘Assets will no longer be bought, but provided as a service!,’ brainstormed a senior UK manufacturing executive at a recent workshop on UK manufacturing facilitated by Cranfield University. If true, the whole nature of manufacturing, engineering and service will change forever.
We already see that the data generated by digitalisation is beginning to blur the distinction between products and services, two mega-trends are driving us further in this direction:

1. IoT and connected products are becoming part of our everyday thinking: As the Internet and smartphones have become integrated into our lives, so the idea of connected products has become the norm. Significant investments from industry heavyweights such GE, Siemens, PTC & Microsoft have created a hype that this is an opportunity not to be overlooked.
2. Governments will legislate for the Circular Economy: Who is not aware of the environmental challenges that we face on our planet today. No longer can we dig up resources, turn them into products and then throw them away. Now we have to recycle our assets and ensure they stay at the highest value. Governments are starting to legislate for what is called this Circular Economy in the way they manage large infrastructure investments such as rail infrastructure and defence.

A key challenge for companies is how to react to these big ideas in a way which is relevant to today’s business and society. The current approach appears to be a fixation on technology: ‘Think what the IoT could do for you by monitoring your fridge or health through your Apple Watch’.[quote float="left"]A key challenge for companies is how to react to these big ideas in a way which is relevant to today’s business and society.

This is great for stimulating our imagination, but does not help monetise the technology. The key is to mix this imagination, with a deep understanding of the customers’ business model and processes. Then figure out how to apply your technical or business knowledge to improve whatever it is your customer is trying to achieve.

Often this is called Service Thinking, yet most engineering and manufacturing companies actually struggle with it. Yes, these companies look at the customer needs, but they fail to deeply understand how their customers make money and the available profit pools in their industry’s supply chain.

However, increasingly we can see successful examples of how companies are using Service Thinking to expand their horizons.

I recently met with Gerard Shaw who is MD of a small Northern Irish company, LISTO, who style themselves as ‘Cloud Data Innovators’ . His goal is to find people with big imagination and insight, and help them develop solutions. He told me of a 3rd party service company who provided maintenance for air-conditioning systems covering multiple brands. In a very competitive market, their key customers were telling them not to just meet the agreed SLA’s, but to actively optimise their energy and maintenance costs. By monitoring two standard outputs found on all brands – first whether a unit is running and secondly pressure across the filter - they could understand the performance of that unit.

Through connecting units using standard telecoms technology to a web portal, they can now see failures and react before their customers report it. They can see poor performance and plan in visits, so reducing their own operational costs. When performance of a unit is poor, they can put together a business case for their customers on why they should purchase a new unit. A very simple solution, based on knowing what was important to the customer, and the critical data that could make a difference.

 

At the other extreme is MAN Truck UK who used Service Thinking to grow their business from £50M to £550M over a period of 20 years. Faced with the challenge of a declining market, the management team worked with their key customers to understand that the truck is only 10% of the annual running cost. Their customers wanted them to tackle the real issue that made a difference to their profitability. This was fuel, which accounts for 45% of their costs and the driver another 29%. MAN knew a 10% saving in fuel consumption, could double the annual profit per truck for the haulier.

Initially they developed a full maintenance contract to optimise performance, a key element of which was the telematics data systems that were just starting to be designed into the truck’s controls. They then had the insight to invest in the telematics infrastructure, allowing them such a high level of control that they could offer the truck as a leasing service. Plus the data they created on how the driver was performing enabled them to further reduce fuel consumption and decrease insurance premiums.

In both examples technology was not the route to the solution. The answers lay in a deep understanding of the customers’ business model and figuring out how to make a real difference to their profitability. Sounds simple, but not always so easy. As more companies master Service Thinking, then maybe we are getting closer to the day when most assets are delivered as a service.

 

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