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In this new article for Field Service News, Michael Blumberg, President of Blumberg Advisory Group, discusses the strategic value of Spare Parts Management in product service businesses.

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INTRODUCTION

Spare parts represent the single largest investment and second-largest expense when running a product service business. This is true regardless of whether Aftermarket Service operates as a cost center, revenue center, or profit center. Additionally, several industry trends, including Servitization, Circular Economy, and a tsunami of technological innovations, have placed even greater pressure on Service Leaders and Supply Chain Managers to be as effective as possible when itforecasting, managing, and ordering spare parts. Spare Parts Management (SPM) is the process that companies use to ensure that the right spare parts are available at the right place and at the right time.. However, operating a successful SPM function creates a few challenges. As mentioned above, the goal is to have the parts available at the right place at the right time. But carrying too much inventory will hurt the income statement and alance sheet, as well as KPIs such asreturn on assets and return on invested inventory. Another challenge is that service parts are not the same as any other inventory like finished goods. This is because they can be repaired and reused, thereby being a great revenue source and solution for any service issues. To sum up, SPM has unique characteristics that make it complicated. Therefore, there is a need for industry-specific software to meet such complexities.

SPM State of the Art

Blumberg Advisory Group published a report that aims to educate Service Supply Chain Executives on the strategic value of SPM to their company’s financial and operational performance. It also contains independent benchmark evaluation and profiling of selected SPM vendors and their key capabilities.

The objectives of the Blumberg Advisory Group report:

• To educate Service Supply Chain Executives on the strategic value of SPM to their company’s financial and operational performance.
• To provide an independent benchmark evaluation and profiling of vendors based on the following criteria – feature functionality, vertical market focus, core competencies, use cases, current and planned innovations.

The report relied on Blumberg’s knowledge of the SPM market and a wide array of data sources when profiling vendors. This includes whitepapers, publicly available information and literature, structured discussions, data collection processes with said vendors, interviews with industry leaders, consultants and end-users.

IMPACT OF KEY TRENDS ON SPM

There are three major trends that have a significant impact on SPM. These are:

• The Servitization of Products. This trend places greater attention on generating additional revenue through the sale of spare parts. It is the main drive for companies to become proficient in planning, forecasting, and managing spare parts.
• The emergence of the Circular economy. Here, companies create value by repurposing, reusing, and recycling products. This allows supply chain managers to replenish their spare parts inventory by simply repairing and refurbishing defective parts.
• The tsunami of new technologies in recent years. The rise of modern technology in helping companies improve customer satisfaction and experience has shaped SPM into a more accurate and effective technological solution.

CORE FEATURES OF SPARE PARTS MANAGEMENT SOLUTIONS

Below are the core features to look out for when investing in Spare Parts Management (SPM) Solutions:

• User Interface
• Parts Management and Grouping
• Forecasting
• Inventory Planning and Optimization
• Supply Planning (Order Plan)
• Reporting and Analytics

CORE FEATURES OF SPARE PARTS MANAGEMENT SOLUTIONS

Here are other aspects to consider in your choice of SPM solution:

• First, make sure that the solution is specifically designed for managing the Aftermarket Service Supply Chain.
• Second, research the vendor’s experience and expertise within your vertical market.
• Third, check if there are any independent organizations that validated the math behind the inventory planning and which organizations. This adds credibility to the vendor’s ability to meet organizational requirements regarding SPM.
• Fourth, find out what planning objectives are met or optimized through their SPM system and what their application is trying to accomplish. Finally, investigate the SPM solution’s ability to keep with the new technological development and how they incorporate them in various optimization and planning scenarios.

VENDOR PROFILES

VENDOR	COMPANY INFORMATION	KEY CONSIDERATIONS
Baxter Planning Systems	Baxter Planning (Baxter) is a privately held vendor of advanced planning software for Service Parts Management founded in 1993 by Greg Baxter in Austin, TX. While most of its customers are of enterprise size with $1B+ revenue, Baxter also caters to mid-size companies within Information Technology and Telecommunications verticals.	When choosing Baxter, one of its highlights that many users value is the TCO approach because it is aligned with business objectives that all stakeholders in the organization can understand.
Oracle	Oracle is a $39 Billion company. Its Supply Chain practice accounts for approximately 3.8% of total corporate revenue. Its Oracle Spares Management (SM) is a complete solution covering key processes and functionality required to manage serviced parts within a service supply chain.	Although it presents many features, it is recommended that manufacturers only consider Oracle Service Parts Planning (SPP) - an Oracle SM component, when they are already a part of the Oracle Platform.
PTC Servigistics	PTC’s Servigistics software is a purpose-built Service Parts Management (SPM) solution that incorporates the broadest and deepest features in the marketplace. Servigistics represents approximately 10% of PTC’s business, making it by far the largest Spare Parts Management (SPM) solution provider.	Servigistics is the best fit for companies that manage large, complex supply chains or where service levels agreements or connected assets are significant considerations. It is still a viable option for mid and small-market service organizations since it offers various packaging and pricing options. Servigistics has innovated with AI, ML, Big Data, and IoT helping organizations stay ahead of the Digital Transformation trend.
SAP	SAP, a leading ERP software vendor, delivers Service Parts Management capabilities through its Extended Service Parts Planning (eSPP) and Integrated Business Planning (IBP). These applications work together to deliver the full breadth of capabilities found within a typical SPM solution.	Just like with Oracle, it is recommended for SPM users that are already on the SAP Platform and there are no third-party solutions available to them through their IT department. Also, SAP is only suggested for SPM where parts returns, or repairs do not play a big role.
Syncron	Syncron is a privately held company founded in 1999 and headquartered in Stockholm, Sweden. Syncron has developed numerous SPM solutions over the years including Syncron Inventory, Syncron Retail, Syncron Price, and Syncron Uptime. Syncron supports a broad array of vertical markets, including but not limited to agriculture equipment, automotive, energy, and more.	If looking to generate a larger percentage of total corporate revenue from the sale of aftermarket spare parts, then manufacturers should consider Syncron. It is also a great option when products are IoT enabled and critical to PaaS agreements.

 

SUMMARY

To meet the need of SPM solutions in the market, various vendors have emerged offering their own set of features and capabilities. In fact, the Blumberg Report has successfully profiled each vendor according to certain functionalities including Reporting and Analytics, Parts Management, Supply Planning, Forecasting, and Inventory Optimization. However, it is important to note that choosing an SPM solution depends on your company’s objectives and goals. It is through these sets of goals that you can determine what features you need, and which vendor offers the best solution according to those requirements.

Download Blumberg’s report to gain new perspectives and insights on the SPM State of the Art.

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Further Reading:

• Read more FSN exclusive articles by Michael Blumberg @ www.fieldservicenews.com/michael-blumberg
• Downdload Blumberg's report on the SPM State of the Art @ www.blumbergadvisor.com/spm-benchmark
• Read more about Parts, Pricing & Logistics @ www.fieldservicenews.com/digital-transformation
• Follow Michael Blumberg on Twitter @ twitter.com/blumberg1
• Connect with Michael Blumberg directly by email @ michaelblumberg@blumbergadvisor.com

Dr. Chris Raddats, Senior Lecturer in Marketing and Director of Research at the University of Liverpoool, highlights the importance of having a strong corporate brand in B2B manufacturers and offers companies the opportunity to better understand the unique drivers of their brand strengths by taking part in an exclusive study.

Having a strong corporate brand in business-to-business (B2B) markets is an important factor in creating differentiation and driving performance. It is, however, less clear what factors create such a brand for traditionally-product dominant companies (manufacturers) from the customer perspective.

The quality of the manufacturer’s products is important but so too are brand familiarity, customer relationships, delivery performance, prices, and services among other factors. Indeed, services are increasingly important for many manufacturers in creating differentiation and competitive advantage. It is not easy to quantify the relative importance of specific drivers in creating a strong brand, although having this knowledge would help manufacturers to develop and invest in the most important ones.

 

A FREE-OF-CHARGE OPPORTUNITY TO UNDERSTAND THE DRIVERS OF YOUR COMPANY'S BRAND

Using a survey and through undertaking statistical analysis, we have developed an approach that can isolate the specific drivers of a strong B2B manufacturer brand. The survey was developed after an extensive programme of interviews with company managers and is run using a manufacturer’s customers as the sample. It has already been used by one manufacturer for whom we received 173 customer responses.

For this manufacturer, services are a relatively small part of its turnover. The results show that there are three significant drivers of its brand: 1st - 'cost of sales services' (e.g., reliable delivery and short lead times); 2nd - 'brand familiarity'; 3rd - 'product support and operational services' (e.g., training, support, project management). Thus, the importance of services and brand familiarity is key for this manufacturer.

Moreover, when considering the factors that drive overall customer satisfaction with the manufacturer, we identified two factors that were significant drivers: 1st – ‘brand loyalty’ and 2nd 'cost of sales services'. We can, therefore, clearly see the high importance of the brand as well as services such as product delivery.

We aim to run the survey again with another B2B manufacturer in a different sector. To this end, we are seeking a manufacturer for whom services are an important part of turnover (c. 20+%). So, if your company would like to better understand the unique drivers of your brand strength, we can provide you with the online survey instrument to run with your customers and then analyse the data for you using statistical analysis.

We will provide you with a report based on the results. This work is free-of-charge and all we ask is to use the data for anonymised academic publications and managerial articles in, for example, Field Service News. Your company name will never be disclosed.

The study is being run by three academics, Dr. Chris Raddats (click through to see my LinkedIn profile) and Dr. Rachel Ashman at the University of Liverpool and, Professor Stuart Roper at the University of Huddersfield. We have a wealth of experience working with companies to deliver valuable insight and if you are interested in the study and would like further information, please contact me at chrisr@liv.ac.uk.

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Further Reading:

• Contact Dr. Chris Raddats for more information on the study @ chrisr@liv.ac.uk
• Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
• Read more articles by Dr. Chris Raddats on Field Service News @ www.fieldservicenews.com/chris-raddats
• Connect with Dr. Chris Raddats on LinkedIn @ www.linkedin.com/chrisraddats/

In this new article for Field Service News, IDC's Aly Pinder discusses why the future of field service enterprises depends on getting the change in management right.

With a new year comes new beginnings and new changes. Often our business lives resemble our personal lives, especially in this current moment where the lines between the two are quite blurred. But for the field service organization, where work from home options are not an easy pivot, change isn't always a welcomed concept. Decades of expertise from front-line technicians can often breed a tried-and-true mindset around best practices and ways of getting the job done.

However, even the field team is finding that they have had to become more nimble, agile, and open to a next normal. In IDC's COVID-19 IMPACT ON IT SPENDING survey, 36.8% of manufacturers stated product and service installation would be converted to a contact-less experience. The ability to service assets, equipment, and products remotely or at least with limited time physically on site is a major shift for many service organizations and field service teams where getting hands on the machine for as long as it takes to fix the issue has been the norm.

As customer expectations evolve to expect contact-less experiences while also receiving quality service, the field service organization will need to transform. However, in an IDC research survey of manufacturers, only 34.0% of sampled organizations stated a strategic approach to change management with senior leadership having invested resources to ensure transformation was successful. The rest of manufacturers had some resources in place for change management but nothing strategic or at an enterprise-wide level. This comes at a time of accelerated digital transformation for many organizations while disruption is impacting the way service is delivered, how customers interact with organizations, and where employees work. These divergent factors, of rapid change with limited strategic communication, can lead to field service teams feeling left out of the future of the business. The field service team, front-line technicians, dispatchers, schedulers, third-party contractors, and partners must be a part of any change from the beginning to ensure expedient success and minimal negative impact to customers. To achieve accelerated digital transformation in field service without the discord, manufacturers and service organizations should consider the following:

• Solicit insight directly from your technicians with regard to gaps in the technology solutions currently used and relation to their productivity. Digital investments for many organizations are implemented from the top down or from the IT team. Not many organizations have the front-line team spearhead technological initiatives. It shouldn’t be a surprise, field technicians by in large are remote and must be primarily focused on completing work orders. Time to test or pilot new technologies isn’t in their job description. However, this fact mustn't lead to the field team being bypassed all together. Field technicians know what tools they need, what knowledge would help them be more productive, and what types of capabilities would enhance their interactions with customers. If field service technicians believe changes in technology or processes area being made with them in mind and with their input, the transformation will result in less friction.
• Educate the field team on the value of digital transformation. Too often, technicians are the last to know about technology hardware and software changes. They are expected to just blindly go along with the latest tools and its inherent value to increased productivity. But this approach can lead to resentment as these technicians have gotten the job done prior to any changes in technology. Also, some enhancements can seem like digital automation just to track technicians more closely to be punitive or restrict creativity in work. Communicating the value of technology changes to productivity, the customer experience, and business goals will provide the field team with buy-in to support initiatives.
• Understand field service team member's desired working environment and interest in digital technology. Not all technicians are the same. Some enjoy going out and dealing directly with customers, and others just want to fix an equipment failure but not have to interact with others. Both profiles are valuable to the field support team. In a constrained talent market, manufacturers and service organizations can’t afford to turn anyone away. By identifying which technicians are willing to work in direct contact with customers and which don’t, service leadership can create dedicated teams that build on individual strengths. Furthermore, with the emergence of a profit- or customer-centric view of field service, many service organizations look to transform the field service job to be less about completing as many jobs in a given day to instead empower technicians to become advisors. This change also is not for all technicians. Assessing which technicians want to work directly with customers to drive value-add experiences and which just want to just solve problems, service leaders can segment the workforce for specific jobs.

Change management is not easy even in the best environments where teams are in constant contact with direct communication with leadership and each other. Field service organizations have an even tougher time as technicians are removed from direct lines of communication with those making decisions, and inherent to their job is a feeling of isolation. As a result, service leadership must approach new digital initiatives and change differently for the field team taking a strategic approach to education, communication, and deployment. Failure to take change management as a serious challenge can result in delayed rollouts, attrition, or degraded service quality.

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Further Reading:

• Read more articles by Aly Pinder @ www.fieldservicenews.com/alypinder
• Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation
• Connect with Aly Pinder on LinkedIn @ www.linkedin.com/aly-pinder-jr
• Find out more about IDC Insights @ www.idc.com
• Read more about Covid-19 in Field Service News @ www.fieldservicenews.com/covid-19
• Follow Aly Pinder on Twitter @ twitter.com/Pinderjr
  
  

Damien Penney Vice President at Lytx Europe, discusses how fleet managers can empower their most important assets by placing technician safety and empowerment at the heart of their programs.

More and more, fleet managers are empowering their technicians with the tools to make good decisions that help them stay safe on the road. This means sharing ‘big picture’ insights about behavioral trends to watch out for, but also deploying in-the-moment vehicle alerts that allow technicians to self-correct in the case of a momentary slip-up behind the wheel.

By placing technician safety and empowerment at the heart of their programs, fleet managers are focusing on their most important assets. A technician who self-corrects risky driving behaviors is in the best possible position to help keep the fleet on track during high volume or challenging times.

THE POWER OF IN-THE-MOMENT ALERTS

Fleet managers know that even the most experienced and safest drivers may be subject to a periodic slip-up. When that happens, it’s important to help those behind the wheel get back on track as quickly as possible. Unlike traditional telematics which only tells you the what, powerful technologies such as machine vision and artificial intelligence (MV+AI) are now being used in order to tell the why and provide drivers with a little extra assistance.

Machine vision essentially acts as a smart set of eyes that scan and recognize both the internal and external environment of the vehicle. This includes the ability to identify distracted driving behaviors such as mobile phone use, eating, drinking, smoking, or failure to wear a seat belt. While MV identifies the issue, AI determines how risky that issue is and whether it needs to be flagged to the technician or manager.

An experienced technician may have a perfect driving history but, on their first day back after a long break, forget to click their seatbelt as they pull away from the depot. Much like a friend sitting in the passenger seat, MV+AI will kick in, cueing an audio alert that will enable the technician to self-correct their driving in a matter of seconds.

Fleet managers can also use this approach as an opportunity to reward good behavior. For example, video footage may reveal a technician reacting quickly to a momentary lapse, minimizing potential risk and avoiding any escalation.

PUTTING THE TECHNOLOGY IN THE HANDS OF THE TECHNICIAN

As well as reacting in the moment, it’s important that technicians have the opportunity to review their overall driving style. This includes spotting any risky behaviors that may be sneaking in over time.

One of the ways this can be achieved is by giving technicians condensed video clips of their driving to review at their leisure after their shift. In the moment, a driver may not have registered that they were following the vehicle in front too closely for example. However, the sight of themselves on video exhibiting potentially risky behaviors is a direct and effective way of communicating this. A technician will become more aware of their actions, placing the risk more firmly in their consciousness as a result.

One of the biggest benefits of self-review is that it’s something that technicians can do independently. There is no need to wait for a formal coaching session to be scheduled and any question of implied blame by a supervisor is avoided. In terms of technology, technicians can simply log on to a computer or mobile device anywhere that there’s a cellular connection.

SEEING THE BIGGER PICTURE

As a manager, understanding the bigger impact of these behaviors is also important. You need to be able to predict and manage future collision risk exposure to your fleet by analyzing past data.

For example, you might uncover a trend that shows technicians who work back-to-back shifts are more likely to be distracted by texting, food or drink while driving. This would be the starting point for taking a closer look at what’s going on. In this case, perhaps the technician is not taking breaks and eating while driving, and possibly texting or making phone calls while driving from job to job in order to multitask. Maybe they are facing pressure to get more site visits done in a shift and might be cutting some safety corners.

The more quality data you have, the easier it becomes to see these trends on a bigger scale – and feel confident that they are accurate. At Lytx, our database is meaningful because it consists of more than 120 billion miles of driving data from more than one million commercial drivers and technicians worldwide. This grows by more than 140,000 new driving events each day, further training and improving its algorithms.

For safer fleets, we need these insights to be shared properly. As well as providing managers with reports detailing incidents of risky driving, it’s essential that we place technicians themselves at the heart of the process. By placing some of this power into their hands, we can increase co-operation, share the responsibility, and have an approach to fleet management that is altogether more agile and responsive. Only then we really achieve lasting behavior change that sticks.

Lytx can help empower your technicians to be safer. Learn more at Lytx.com.

This post was originally published on Lytx.com by Damien Penney Vice President, Lytx Europe.

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Further Reading:

• Read more about Managing The Mobile Workforce @ www.fieldservicenews.com/digital-transformation
• Learn more about Lytx  @ www.lytx.com
• Find out more about Detect and Prevent Risky Driving with Lytx @ youtu.be/F1B1jEWcLAY
• Read more about Lytx on Field Service News @ www.fieldservicenews.com/lytx
• Follow Lytx on Twitter @ twitter.com/lytx