ARCHIVE FOR THE ‘ishida’ CATEGORY

The not-for-profit knowledge sharing group the Service Community, has announced their next event will hosted by GE Power at their new Stafford Location on the 16th October 2018...

The event will run from 11.00 – 16.00 and include a light lunch.

You can sign up by emailing us at info@service-community.uk

 

Agenda

 

• Meet 10.30 for 11.00 Start
• Welcome & Service in GE
  • Service Challenges in GE Power
• Creating Service focus in a successful product business - Ross Townsend – Business Manager Ishida
  • Ishida is already a successful packaging equipment business. Ross will share his experience of the challenges of developing advanced services in an environment where the product is king. We will have an opportunity to discuss what is working, but also what is not, so this should be a great conversation for those driving change in product orientated businesses
• Networking Lunch
• Selling Service Value - Leon Sijbers Service Director at GE Power
  • One of the biggest challenges of selling business is to identify and quantify the pain points in your customers. Leon is an expert in identifying these pain points and then selling value to close the service deal. He will share with us his own approach which he has developed over the past 10 years in service sales.  An excellent session for anyone developing a service sales team
• Buying Advanced Services and the relevance of a new Service Standard
  • This session will provide insights from one of the most sophisticated buyers of services such as a availability contracts, as to how services are bought, and why the recently published British Standard ‘Through-life engineering services – Adding business value through a common framework – Guide’ (PAS280) is a must read for all professionals involved in servitisation of industrial businesses.
• Networking break
• Assets & Service Data Gravity - Mark Homer: GE Digital
  • Vanson Bourne recently carried out a research programme on behalf of ‘ServiceMax from GE Digital’ aimed at understanding on the importance of service data in managing assets. Mark Homer will share the results and the insights learned.
• 16.00 Meeting Close

 

Field Service News will be in attendance to report from the event and we hope to see you there also!

Find out more about the Service Community @ www.service-community.uk

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Servitization is becoming a huge topic in the field service sector as we see more and more organisations step on a path towards advanced services we must realise that they cannot do it alone, their customers must be prepared to come along on the ride as well...

Ross Townshend, EMEA Business Manager - Advanced Services & Data for Ishida Europe talks to Kris Oldland and outlines some of the challenges he has faced in building advanced services within his organisation...

The topic of servitization is of course highly complex and for those just starting to explore the area, it can be a daunting prospect to get one's head around. However, Ross Townsend,  Advanced Services Business Manager, Ishida has had been able to get a bit of a head start by not only arriving into an organisation that has already embraced the idea, but that is also working with the Advanced Services Group, headed by Professor Tim Baines, Aston University, one of the leading proponents and thinkers within the servitization movement.

Kris Oldland, Editor-in-Chief, Field Service News caught up with Townshend to find out how he is adapting to a world of servitization some six months into the job…

“Before I joined servitization was something I knew nothing about,” states Townshend as we begin our conversation.

This was one of the key reasons I was so keen to speak with Townshend in the first place.

Pleasant and approachable, Townshend is one of those people that you find it instantly easy to talk to. A very subtle hint of slight West Country burr to his accent adds an earnestness and integrity that could be perhaps lost in the international world of servitization, but for us here in the UK, it is noticeable and adds a natural ease to Townshend’s manner.

Certainly, what comes across even within just a few moments of speaking with him is that he has that key ingredient that all great service people have, he is able to communicate effectively and eloquently within a comfortable use of language that feels all the time natural, relaxed and honest. In my experience people with such a manner, often speak with authority in areas they know well and integrity and humility in areas in which they are slightly less surefooted.

As part of the Advanced Services Group, Ishida and Townshend will be working alongside the like of Prof. Tim Baines and Dr. Ali Bigdeli.In the context of this conversation then it would be interesting to not only hear his thoughts and gain his insights on how Ishida are approaching servitization, but also to understand first hand how daunting it was to leap into this baptism of servitization fire that few elsewhere have had the opportunity to do.

In Ishida, Townshend has arrived in an organisation that has fully embraced servitization, his former colleague Jason Smith is the only man I’ve personally met who has been involved within two separate companies moving to a servitized business model and as part of the Advanced Services Group, Ishida and Townsend will be working alongside the like of Prof. Tim Baines and Dr. Ali Bigdeli.

So whilst he may have to endure a baptism of fire to get him up to speed, he has some heavyweight support to help him get through it.

“When I look at the transformational roadmap that the Advanced Services Group have created, we have this cycle that we are going through exploring it and trying to work through it,” Townshend explains.

However, it has not been plain sailing for Townshend and the team at Ishida to introduce advanced services to their market - and the reluctance of the market itself is something Townshend thinks could be a factor, having arrived from an entirely different vertical that was further along the road in terms of acceptance of servitization and digitalisation.

Whilst that is a separate issue to the conversation around servitization in a way it does add some context to the arena we are working in“I’m not from the food industry most of my work was in automotive having worked with Bosch Rexroth for a number of years with a background in design engineering, product management,” Townshend explains.

“In terms of the digitisation side of things generally, I find the food industry is massively behind and that’s not just in terms of technology but also in terms of mindset to work with technology. Whilst that is a separate issue to the conversation around servitization in a way it does add some context to the arena we are working in. It can be a frustration even just to get the software adopted let alone the advanced services longer term,” he continues.

“In terms of why the business is diversifying into advanced services is another interesting point. I view this as a journey for a manufacturer and then also as a journey for a manufacturer within the food sector. The suggestion would be that we are a long way down the journey but I think we are still packing the car up at the moment – we haven’t even actually started on the actual journey yet.”

“A part of that is the fact that we are in the food sector, where the adoption of technology is somewhat lagging behind where it is in other sectors.”

“Also the food sector is the largest, it's highly profitable and its growing. We are growing double digit year on year so why would we diversify?”

Of course, the food sector is one which by the very nature of the products it generates will always remain transactional. There isn’t a service contract that can be sold on a packet of oven chips. You buy them, you eat them, then you buy some more.

I wonder if the fact that Ishida’s customers themselves will always have that transactional relationship with their customers is in part responsible for creating a mindset that is hard to overcome in terms of raising conversations around outcome-based contracts?

“I think it is,” Townshend concurs.

At the moment as part of our work with the team at Aston are trying to find pilot customers to establish a proof of concept and even that is proving to be a significant challenge“At the moment as part of our work with the team at Aston are trying to find pilot customers to establish a proof of concept and even that is proving to be a significant challenge. We have had conversations with a couple of parties where we thought OK, we’ve got a reasonable amount of equipment in there, you could argue that we’ve got a fair amount of ownership of the process which is quite critical when you're looking to establish this type of working agreement."

"They have five or six pieces of machinery in a line so we can really add some value there and take ownership of that process and work towards what we would ultimately be our vision of a servitized contract which internally we are terming pay-per-pack, which is the holy grail for us in terms of advanced services to achieve this pay per pack model. Securing a pilot has been very difficult.”

“We had a large manufacturer of salad that we were speaking to and they showed interest. We had a meeting with them and their senior directors and they could certainly see the mileage but as it is in the case of lots of businesses they are too busy to be able to really think about it and they don’t really need it at the moment.”

This is an interesting point here.

In the case of Rolls Royce’s power by the hour there was a strong customer pull from American Airlines. In the case of MAN UK there was a huge backdrop of hauliers and logistics firms struggling to make a profit.

Perhaps the burning platform factor is a necessary element in the equation for creating an environment in which an approach to business that steps as far away from the traditional path as servitization does. It is perhaps far less easy to be a driving innovative force in an industry that is profitable and ticking along nicely.

As the old adage goes if it ain't broke…

I do think that the sector you are operating in is one factor in the ability to drive something innovative like servitization forwards“Whilst I absolutely won’t take anything away from the achievement that companies like Rolls Royce or MAN Trucks have managed, I do think that the sector you are operating in is one factor in the ability to drive something innovative like servitization forwards. Another area to consider within there success also is that they have complete control of the process,” Townshend says expanding on the discussion.

“In our industry and with our customers, at best there may be one significant chunk of a production line which is our equipment. If they are a major manufacturer they will certainly have other lines that are our competitors' machines or they will have a line with six different manufacturers equipment in them so certainly whatever we do needs to be scalable, unless we go in and basically say 'we will provide you with all the equipment for your factory'. Unless your in the lucky position to be on a greenfield site where you're in the right place at the right time that is very difficult to achieve.”

Signs of an emerging appetite for such advanced services are beginning to appear as Townsend recalls one such example.However, signs of an emerging appetitie for such advanced services are begining to appear as Townsend recalls one such example.

“A big dairy producer approached us within the last six months and they were looking for a supplier that could take on all of their quality control equipment, on every site across Europe. They were looking for one supplier to look after everybody's equipment service maintenance in the full acceptance that that is a very difficult job and while you're going through that period of changing out equipment it is going to be a difficult thing to manage.”

“But it is interesting that they were asking that and the reason they were doing so was that they didn’t want the hassle. Clearly they of course also wanted a good price but they accepted that this removal of the hassle came at a premium. Also financially to them, it would be more visible on their books versus the huge maintenance and hidden costs that they would have to deal with on a daily basis.”

“And they were going to several suppliers and there was a huge team of people set up to go and find the right supplier for this so they took this very seriously - it wasn’t just one person’s crusade.”

So clearly there is at least the seeds of some companies looking for servitization from providers within the sector“They’ve gone through the analysis at their end and decided that outsourcing this area of their business was the direction they wanted to go. So clearly there is at least the seeds of some companies looking for servitization from providers within the sector."

“This organisation is clearly looking to remove the headache of maintenance for them and the next logical step along that path would be some form of advanced services contract where maybe you go in there and say, yes, we can take on the entirety of your maintenance contracts and we can take all of our competitors machines out and put ours in but it will be on a cost per usage basis. It’s a big leap forward but it certainly follows that path."

However, until that one customer makes the leap that pulls the entire industry forward it is perhaps a wiser move to bring customers with you on the journey in a more incremental manner.

This is certainly how Townshend is approaching the task…

“The direction I am taking with the business is to start to bundle in certain value added functions and features to start to drive some customer pull and start at a lower level than pay-per-pack just to get the appetite there. I used the term holy grail and the problem is it is just that it is just too far away for our customers to grab. They get it and they go wow that’s good but they have no idea about how to move forwards to implement it.”

The move to advanced services needs to be a symbiotic relationship, it needs to be something that you go to your clients with and they come with you on the journey. Whoever leads that journey whether it be a customer pull or a client push you both need to be going on that journey at the same time.

 

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While for many the shift from traditional transactional product focussed business models to a more strategic service centric approach that focuses on longer term, outcome based contracts is a complex process to navigate. However, Jason Smith, General Manager, Aftersales, EMEA for Japanese food packaging and weighing manufacturer Ishida is a man that has not only been through the process, he has done it twice.

Kris Oldland, spoke exclusively with him about the importance of executive level buy-in to undertake such a move and why customer selection when rolling new service models out is vital….

KO: All too often I hear that despite the fact that service operations of a business brings in a significant proportion of revenue into a company, there is a general lack of support for the service team of many businesses at the top tier executive level.

This of course would be a fundamental barrier to moving to an advanced services model and is a challenge many senior service executives are confronted by even though they can see how both their business and their customers could benefit from a move away from the traditional break-fix maintenance to the type of proactive service operations that advanced services require.

So how can we get the voice of the service department heard at the executive level?

JS: I think the only way to do that is to have a fairly compelling argument and there is nothing like having a very compelling customer story to help give that leverage at board level. Traditionally, businesses are built upon delivering a product and they will have done that very successfully to have grown to a large size. It is the case really that they will have done so on tangible benefits.

Comparing one product to another is much easier than comparing one service against another. I think within most manufacturing organisations there is still probably a lack of understanding about the value services can deliver to a customer combined with a product.

 

Its still regarded as a separation – that’s why we have terms like aftersales – it’s after the sale, its not combined with the sale.

For your typical product salesman it’s hard to comprehend something as intangible as advanced services and how to explain it and describe the value when he hasn’t got any evidence or experience to back it up with.

KO: So does the adoption of servitization as a business model need to be driven from the top down?

JS: Absolutely, without that support from the top it is dead before it’s ever started.

KO: What about the customer point of view - it’s one thing pushing an advances services route and getting buy in internally, but what about externally?

Is it a case that some customers just don’t want to come down this route because they are so used to the transactional nature that they have always operated within?

JS: Very much, it is a cultural thing for a customer and customer selection is therefore very important.

A customer who is used to transactional relationships, that may have those pressures on them themselves from their own customer base, would be one who is very transactional and possibly looking to exploit the relationship.

They would probably not be the best ones to try and build this concept with because in order to mitigate, quantify or even deliver or offset the risk that you are going to assume in delivering an advanced service you are probably going to make it uneconomical and unviable compared to the traditional business models. You just won’t compete or you’ll be pulled a part and it just won’t be relevant anymore.

 

Therefore, I think customer selection is absolutely vital. The question is along the lines of technology push/customer pull – which is best?

I think it depends very much on the pace at which you want to work. Customer pull you lose control of the pace and velocity at which you want to work at in terms of the delivering the service. But if you push it out to your customers you have the challenge of convincing them to get on board.

KO: Ultimately will there always be two-tier customers, will there be those companies that you take on the servitization journey with you and those that remain doing business in the traditional sense or is the long term aim to eventually bring everyone on board with advance services? 

JS: I think there is really three types of customers and I would support the Caterpillar approach that there are those who want to do it themselves, those who want us to do it with them and those who want us to do it for them.

In terms of servitization probably you are always going to have an element in each of those three camps. The challenge that we face as service providers is moving them out of the ‘do it myself’ to ‘do it with me’ to ‘do it for me’.

Obviously moving them from a point where they are doing it themselves, to where you are doing everything for them is a big leap of faith. It’s not something you can do overnight, certainly not at a risk that you can sustain economically. So it’s a case of migrating that customer and building that trust over a period of time, to gain the confidence that you can deliver and that you can add value to their business.

KO: We touched on the fact that servitization needs to be driven from the top down, but do you need buy-in across the whole organisation as well?

For example with our field technicians - do we need their understanding of the concept and if so how do you achieve that?

JS: The easy answer to that is yes, you need buy in across the whole organisation because you are going to be relying on those inter-siloed relationships within the business to deliver within your promise. You’re going to have to rely on your supply chain and you’re going to have to rely on all your internal supporting departments to deliver that.

It is a fundamental change to the way you do business and the way you have done things traditionally, so yes the answer is yes you do need to have buy in from all levels and in particular your service engineers as it represents a fairly fundamental change or difference to the way they are used to operating. 

 

There will be a lot of knowledge in those teams, which is experiential and built up over time together with product training and in some ways you’re starting to both capitalise on their experience but also put it in a bottle so that you can use it in your supporting systems and algorithms for example. 

That represents a fairly big challenge and that’s also going to have it’s own implications for supporting systems such as knowledge management. 

KO: Finally, technology is the key enabler to allow us to move to advanced services, but how far along the journey do you think we are in terms of the development of the technology such as IoT and Cloud? Are we there already or is there more to come?

JS: In terms of being enabled to do the job and to support the decision-making within servitization I think we are actually there with the Internet of Things. OK, there will be enhancements, maybe faster connection times, you can store more data etc., but I think it is essentially there. 

We’ve got enough to be able to do it, maybe even too much.

The real challenge is what you are measuring, the volume of what you are measuring, how you analyse it and draw conclusions from it -to me that is the real challenge.

 

Also the prize is that the value of the analysis that you do is metamorphosed into the value that you can then create for your customer. How you do that, that methodology, is your future IP. That’s where your sales proposition will lie in the future.

So its not the fact that you can get the data, its what you measure, how you measure it and more importantly how you analyse it, what you do with it and being able to express that value in a manner which the customer can fully understand.

 

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