Survive Radical Change with Services

Jul 15, 2020 • Features • Advanced Services Group • manufacturing • Professor Tim Baines • The View from Academia • Covid-19 • Servitization and Advanced Services

Professor Tim Baines, Director of the Advanced Services Group, Aston University and Dr. Ali Zia Bigdeli, Senior Lecturer in Industrial Services Innovation at Aston University argue manufacturing should embrace services as part of its post-COVID-19...

Change, a 1985 paper argued, can be characterised as a “punctuated equilibrium”: long periods of relative calm and small incremental alterations that are interrupted by brief, but radical, seismic shifts. COVID-19 means that we are now living through one of those revolutionary moments.

Advanced Services and Positive Business

But that also means that there is an opportunity to look at things in a new way. For the past 20 years, we’ve been conducting research and advising manufacturers to compete through services – activities aimed at solving customers’ problems – rather than simply just pushing boxes out of the factory.

And our reasons are simple: services are good for business, good for the economy and environment, and good for society. Now accounting for 80% of the UK’s economic output, services have grown by 30% over the past 20 years. By comparison, gross domestic product (GDP) generated from selling products has contracted – a trend that is being replicated in every developed economy across the world.

But it has been a slow and sometimes painful journey – “What is this thing called servitization,” we are asked. “And how do you spell it?!” Up until now, change in this field, like in so many others, has been evolutionary, somewhat incremental and exploratory. But then arrives a global pandemic that shatters the equilibrium and stimulates radical innovation.

These are challenging times, and it’s important not to make light of the struggles facing the global economy. Business activity is currently polarised around sector and geography. On the one hand are manufacturers who support the food and health sectors and have never been busier. On the other are those businesses linked to the aerospace, automotive, and oil and gas industries which are being forced to mothball facilities and lay off staff in their tens of thousands.

For some, the implications are so severe that they may not survive. Even those that are doing well are having to deal with a reduced workforce, social distancing in the workplace, and the economic fallout of customers being unable to pay their bills.

Disrupting the old norms

How appealing the old norms may now seem. Until just a few months ago, most executives within manufacturing organisations had a rather passive, established view of services. For us, it was frustrating, but comfortingly familiar.

We could work with these manufacturers to help them better understand the value of services, influence key decision-makers and then hopefully get a chance to support their innovation of new business models, technologies and organisational structures. But we often experienced an equilibrium – the harder we helped manufacturing executives to push for more services, the harder the system pushed back.

Now, however, that equilibrium is being disrupted.Take performance advisory services. These are services that allow manufacturers to use digital technologies to gain insight into how customers use their products, and then offer data and/or intelligence back to that customer on how to gain more value from those products.

"The end of this period of disruption will bring a new set of norms, and it’s beyond belief that we will return to the days of simply shifting boxes..."

An example of this type of service is Siemens’ monitoring of the condition of airport baggage carts. The company gathers acoustic and vibration data from rail-mounted luggage carts around the airport and uses this data to assess the likelihood of breakdowns before they happen.

Breakdowns cost time and money. So spotting potential breakdowns in advance saves airport operators the penalties that must be paid when luggage isn’t loaded onto flights on time, and improves the passenger experience through the punctual delivery of baggage.We have seen a wealth of technically excellent digital systems like this. Most, however, have so far failed to be commercially viable and manufacturers have been reluctant to invest in and push them to customers. But in the current climate, that may change.

As well as opening up a huge new market opportunity, these services could be far more profitable than simply selling the products themselves. Such services can also develop enviable intimacy with and loyalty from customers as the provider is able to address their customers’ demands and problems much more quickly and effectively.

And now times are changing, the economic potential of services is becoming more visible. Indeed, remote support and performance advisory services – helpdesks, remote support for breakdowns, digital installations – provide obvious solutions in an age of social distancing, remote working and lockdowns.

Customers either want remote advice on how to fix problems themselves, or they want the manufacturer to remotely fix and upgrade their equipment. It’s not all about technology, of course – customers still value speaking to a person, just not face to face. But manufacturers no longer need to gamble as much on selling these new systems; customers actively are seeking them. Both parties are starting to look at the bigger picture, and services are proving vitally important to both.

Accelerated change

For some time yet, change will be accelerated and hastened. The end of this period of disruption will bring a new set of norms, and it’s beyond belief that we will return to the days of simply shifting boxes. At the very least, business plans will need to include how to deal with disruption – whether it’s related to health, the economy or the environment.

The opportunities that this creates for services are potentially dramatic. Services are in the midst of radical change and, of course, we all look forward to returning to those long periods of relative calm. However, in so many ways, things will never be the same. Business models for manufacturers will have been disrupted, and there will be new and different conversations about the value of services. These business models have the potential to deliver huge value, and a level of resilience that we may never see again for production-based ways of competing.

Additive Manufacturing: Game Changer or Roadblock?

Apr 20, 2020 • Features • 3D printing • copperberg • manufacturing • Additive Manufacturing

Additive Manufacturing (AM) is on the front line of the unfolding industrial revolution. This string of rapid prototyping technologies is replacing conventional production, and consequently, it is poised to generate substantial economic revenue by...

The future is certainly bright, but so is the present. On any given day, manufacturers can turn to AM technology to facilitate the production of individually customized products at relatively low costs, reshape the design process, and consolidate their supply chains.

AM will remain a particularly active architect of customer-driven design, virtual inventory, and rapid iterationsfor new product development. Yet it’s not all roses; the lack of quality consistency may slow production runs to a trickle.

In consequence, is AM both the cure and the culprit of innovation volatility? Industry experts seem undecided in the matter as this paper from the Rand Corporation outlines.

Additive Manufacturing: A Magic Bullet for Field Service Logistics?

AM is, after all, a disruptive technology—one that comes with a learning curve. Many top-tier leaders have justifiably gauged the trajectory of additive technology, and when they sensed it had promise, they gingerly lunged for it.

Through the use of AM technologies,anyone can manufacture products without any required tooling for production. That’s right—traditional molding techniques or large machines that have yet to be deftly transported will no longer impede manufacturing performance. Simply put, this set of powerful AM machines has the ability to fabricate a product from a digital geometry representation. Once they accurately replicate computer-aided design drawings, AM tools directly transform three-dimensional structures into functional physical prototypes and, more recently, ready-for-use products—all that in just a matter of minutes. The physical parts are built out of plastics, polymers, metals, ceramics, stainless steel, or other types of material by using a layer-by-layer printing process. A vast majority of modern AM machines print with multiple materials simultaneously and allow the development of mixed-material products.

"Manufacturers must have a plan for everything—how, when, and where they design and manufacture products rank top of the list..."

Organisations with a strong innovative culture recognize the need to facilitate on-demand production, and as it turns out, they’re growing faster and increasingly outpace their competitors.

Innovation, however, is rarely linear. In most cases, it’s a progressive affair that disrupts practically every aspect of the business

Manufacturers must have a plan for everything—how, when, and where they design and manufacture products rank top of the list. AM is already distorting modern-day manufacturers’ long-planned reality by encouraging them to rethink every design-to-fabrication procedure and go well beyond traditional manufacturing methods. Those who are up to the challenge will become the leading innovators in their market.

Additive Opportunities for the Taking

The revolutionary AM technology is becoming commonplace one layer at a time.

This significant surge in popularity may be due to the proposed benefits that are in visible contrast with those provided by conventional manufacturing operations.

Milling, for example, can produce a large amount of unnecessary material waste. Distinct in nature, additive processes have become a statement of sustainability—both economically and environmentally. It is touted that AM technology reduces energy consumption, facilitates dematerialisation, and improves resource efficiency by using waste as an input to construct equitably personalised products in a cost-effective manner.

This type of manufacturing process also attempts to minimise the need for packaging, transportation, and storage. More than that, prototyping and building a high-value product from geometrically complex data in-house can also significantly reduce shipping costs and shorten supply chains.

Since AM machines offer complete (and highly flexible) design freedom, they allow early customer involvement in the product development process. This customer-driven design procedure helps manufacturers respond to individually customised demand wherever needed, revise and conduct timely design changes, and reduce time-to-market. Above all, manufacturers are empowered to forge direct-to-consumer relationships and prolong the lifetime value of a specific object.

"With large-scale printers being well underway, Additive Manufacturing technology will steadily extend its capabilities..."

It’s impressive, but that’s just barely scratching the surface. AM is an advocate of product differentiation—at scale!—and industry experts can take full advantage of this technology to mass-produce custom-fit objects without paying a steep price for additional workers or tooling. Manufacturing in large volumes will, in fact, reduce the cost per unit, minimise the total cost of ownership, and drive greater growth.

At the moment, AM machines can mainly print tiny (yet rather complex) items; they can briskly produce fully-functional parts in just a single production step and without the need for assembly lines. With large-scale printers being well underway, AM technology will steadily extend its capabilities to open up innovative business models across the industry.

Additive Manufacturing Technology Is Ripe for Investment, But the Caveats Remain

It’s in the cards: AM tools will offer unlimited design-to-fabrication opportunities for modern-day manufacturers. The vast majority of these professionals may inevitably face certain drawbacks that can’t (and most probably won’t!) go unnoticed.

Quality consistency is one of the main stumbling blocks.

Every manufacturer aims to develop consistent parts and ensure repeatable quality levels throughout their production lines. Yet no two items are exactly the same. Given that AM machines can produce parts as small as 500 nanometers, the differences may be slim or less obvious; but they exist, and a single inconsistent subset that is left unaddressed could put the brakes on the production line.

All the materials used for crafting AM-produced components should also be processed within the required quality standards and specifications, or else they might prevent objects from being recycled

"Many manufacturing and field service professionals haven’t gained an in-depth understanding of Additive Manufacturing techniques yet, let alone hands-on experience.."

The knowledge gap is another considerable barrier to the adoption of AM technology. As this study warns “[the] knowledge of AM in the industry exists in pockets.” Many manufacturing and field service professionals haven’t gained an in-depth understanding of AM techniques yet, let alone hands-on experience.

Amid global economic unrest, the lack of know-how may drive economic insecurity and hamper technology adoption.

Route Around the Gaps and Fortify Additive Manufacturing Innovation

An AM-produced component may be a sure bet for unprecedented manufacturing gains. That is, of course, if manufacturers do not band-aid the inevitable caveats that eagerly come with every disruptive technology. /p>

As AM technology advances, the trick is to promptly address each limitation or potential risk and transform every temporary hiccup into an opportunity for modernisng manufacturing lines.

Capturing AM’s transformative potential is crucial for manufacturers who want to advance customer-led product development and freely reach all their revenue growth targets.

Covid-19: InfinityQS Give Free Access to Data Intelligence Platform

Apr 08, 2020 • News • manufacturing • Remote Monitoring • Covid-19

Manufacturing Services and Software Provider offers free-use of data monitoring tool Enact® to firms throughout pandemic.

Hexagon AB Acquire CAEfatigue

Mar 30, 2020 • News • future of field service • manufacturing • Mergers and Acquisitions • hexagon • CAE

UK-based CAE firm will form part of Hexagon's Manufacturing Intelligence Division.

Ericsson USA 5G Smart Factory Produces First Base Station

Mar 11, 2020 • News • future of field service • manufacturing • Ericsson • smart factory

Initial product is a Street Macro base station that enables smooth, fast and cost-effective 5G deployments...

Manufacturing industry set for surge in AI investment, IFS research reveals

Jan 06, 2020 • News • Artificial intelligence • future of field service • manufacturing • Research • IFS

AI to support automation, support labour shortage and drive upskilling as Industry 4.0 accelerates, study shows.

Manufacturers needlessly let customers wait more than a week for repairs

Dec 02, 2019 • Management • News • manufacturing • Customer Satisfaction and Expectations

Tech support company Mavenoid discovered users of tech hardware have to wait on average eight days to have a problem fixed.

Servitization: The Inevitable Future

Oct 14, 2019 • Features • automotive • manufacturing • Gary Brooks • Servitization • software and apps • Syncron • Outcome-based service • industry events

In November this year top-tier after-sales service solution provider Syncron will be hosting the inaugural edition of a new two day forum Innovate2019. Designed to be a first-of-its kind global leadership summit focused on facilitating conversations...

Academic Excellence

Jul 11, 2019 • aston business school • manufacturing • Professor Tim Baines • Christian Kowalkowski • Servitization • Servitization Conference

Now in its eighth year and welcoming over 80 delegates from all over the globe, the Spring Servitization Conference focused on the impact of digitalisation and sought to affirm the benefits this discipline can bring to service in manufacturing. Attending the event in Linköping, Sweden, Mark Glover spoke to some of the keynote speakers and academics to gauge how important this gathering is...

Located in Southern Sweden, Linköping is the country’s seventh largest city. However, its dwarfed in comparison to London and New York, yet its charming and dotted streets littered with shops and cafes give it a very welcoming feel.

A five-minute walk from my hotel nestles an exhibition centre, the venue for this year’s Spring Servitization Conference, and like the rest of Linkoping it has a certain charm to it. Compared to conference hubs like London’s Excel and Birmingham’s NES, this is an idyllic setting: set among a lush green park littered with benches, where workers sip coffee enjoying the sun before heading to the office, the only sound is a polite bicycle bell or a the low drone of a tram.

I settle at the back of the main conference room on day one of the event, sipping my own coffee and grazing on some excellent Swedish pastries while awaiting the opening address from Professors Tim Baines and Christian Kowalkowski.

“I’ve taken a back seat this year,” says Professor Baines addressing delegates. This is the eighth year of the annual conference and the Director of the Advanced Services Group at Aston Business School has always played a key role in the content, but this year has ably passed the reins to Professor Kowalkowski from Linkoping University

“It’s an event that straddles disciplines and the [servitization] community,” Professor Baines says, extolling the conference’s benefits, “and is excellent to theory and research and relevant to application and practice.”

It’s a valid point: the event has always sought to bridge the gap between industry and application while creating a servitization community that can share ideas, best practice and findings. It remains the only event of its kind and its eighth year is testament to its development, where over 80 participants would come through the conference doors.

“It’s very important because we call come from different disciplines,” Professor Kowalkowski says, taking time out to grab a coffee with me during the first day. "Typically, we have a lot of academic conferences where you go to a conference belonging to a particular discipline, for example marketing or operations management, strategy or innovation or something else. This [servitization conference] is a multidisciplinary conference, so you can connect with other researchers from other disciplines. Because this is ultimately multi-disciplinary research, we are doing on servitization.”

Themed around ‘Delivering services growth in the digital era’, this year’s three-day event was structured, as always, round one single track of academic presentations, split into morning, mid-morning and afternoon sessions and each concluding with a panel debate discussing that session’s major points.

To meld industry and academia, Professor Kowalkowski was able to arrange a suite of excellent key-note speakers to begin each morning and afternoon session, including Ellen Molin, Head of Business Area Support and Services at SAAB and Magnus Savenas, VP Customer Care and Quality at Electrolux.

"It’s an event that straddles disciplines..."

To begin proceedings however, the conference welcomed speakers from Toyota Material Handling Europe (THME): Joakim Plate, Director Service Market and his colleague Patrick Carlsson, Senior Manager Business Development, Service Market.
TMHE the pair told us, carry out four million customer visits every year, with an impressive 96 per cent first-time fix-rate however, with connectivity (which Carlsson called a “game changer in service”) and other technology developments. They expect to improve these figures in the future.

Of course, the challenge lies in managing the rate of technology development, which the pair acknowledged, particularly in big data solutions and prediction models. A challenge into digitalization they’ve ratified by partnering with Microsoft.

Following the event, I caught up with both speakers to press them further on this link-up. “It’s two big brands working together for big future challenges,” Carlsson told me. “we have aligned to utilise technology going forward.”

“In more concrete terms,” Plate added, “they [Microsoft] have been a partner with is us throughout the process, initially by trying to predict how will a service technician in our industry work in five or six years’ time. With that starting point we were able to develop the new platform, which will be developed and deployed in several steps. So, we’ve only really just started the journey here.”

T-Stream, the TMHE digitalization platform for service runs on Microsoft’s Azure Cloud used by all its technicians to get access information in real time including online documentation, parts ordering, quote creations, planning, remote error code reading and GPS. These are collected in one user interface delivering engineers to assets before they have broken down.

I ask what takeaways the pair have gained attending and presenting at an academic conference focused on servitization. “For us, it’s about sharing our challenges with the academic world and to try and bridge the gap between the industry and the academic world,” Plate explains. “I think both parties have a lot to gain in working more closely together and for us it’s an opportunity to convey the challenges that we see, and to get input from the academic world. One area could be big-data handling, for instance.”

Michael Kato is Chief Digital Officer at commercial vehicle manufacturer Scania and made the short journey by train to deliver day one’s afternoon key note. Kato told delegates, fresh from an excellent sit-down lunch, about driving a digital strategy with a focus on customer service and service development, the heart of which, he explained, is to “walk extensively in your customer’s shoes”.

Having been in the role for two years, I asked Kato what challenges he found, culturally, in integrating a digital strategy into a well ingrained core business of a company that has 52,000 employees. “I viewed it like an adventure,” he says smiling.
“We had to establish the values we’re after and what are the levers for higher customer value. We needed to formulate an awareness of what we wanted to do and then prioritise it. It’s taken nearly a year and a half to work out how can we drive digital in business both in a long and medium-term way, because it’s massively complex.”

And academically, what did Kato gain from attending the conference in Linkoping? “I think it is of big value,” he says. “From my point of view, you have to understand what you want to take out of it. So, it might be a framework giving a higher clarity on things that you need to focus on. It might be of viewing different capabilities or it might be understanding the complexities of driving change that you might not have reflected on.

“Many companies have problems on getting progress on different areas, they know what they need to do but they don’t know why they’re not getting there.”

Of course, academic presentations make-up most of the conference content and universities across Europe explored strands around SMEs, Industry 4.0 and advanced services. Generally, delegates saw how the digital side of servitization can be turned into actual value creation for customers and suppliers alike.

On this, Chris Raddats, a Lecturer in Marketing at the University of Liverpool attending and presenting, told me that the conference shines a light on the potential of digitilisation for manufacturing servicing. “The Spring Servitization Conference provides a unique opportunity to discuss servitization from both practical and academic perspectives,” he told me at the evening’s drinks reception.
“This year’s conference was particularly interesting as it focused on digitalisation, a phenomenon that is disrupting many industries and one that could profoundly change how manufacturers develop and deliver services.”

It was during this drinks gathering that I met Lina Sunden, a young PHD student from the Lulea University of Technology in Sweden. Lina had a poster on display at the event, which she was due to present on the third day. She was looking forward to the prospect and excited to be part of this event. She told me that a specialist servitization event like the SSC was important as it focused on a discipline that may get lost in other conferences, something which inspires her throughout her academic pursuits.

It’s this coming together of like-minded academics that makes the SCC such an important gathering. Not only bridging the gap between academia and practice, the event offers a place for scholars whose research can be overlooked. However, the potential value that servitization brings to manufacturing, particularly when viewed through digitilisation could be hugely significant.

I’m already looking forward to next year’s event.

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