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In the final instalment of our series decoding the various acronyms and abbreviations found in the world of rugged devices we explore the meaning of ATEX certifications...

When looking at a rugged devices spec sheet we will often see the words ATEX certified. So what is ATEX certification who is it relevant to and why is it important?

ATEX is the name given to two European Directives relating to controlling explosive atmospheres. The name actually comes from the French term ‘Atmospheres Explosibles’ and generally if you don’t think you need your devices to be ATEX certified then the likelihood is they don’t need to be - because if your devices do need to be ATEX certified then they really, really do need to be ATEX certified and you should know all about the subject already.

However, for the rest of the class and as a general recap lets take a quick look through the world of ATEX, starting by what exactly is an explosive environment.

So what is an explosive atmosphere?

Contrary to popular belief, in official terms at least, explosive atmospheres are not those situations where you’re engineer turns up 2 hours late and then realises within 5 minutes he doesn’t have the right parts in his van.

In the realms of ATEX at least, an explosive atmosphere can be caused by flammable gases, mists or vapours or by combustible dusts. If there is enough of the substance, mixed with air, then all it needs is a source of ignition to cause an explosion.

Of course explosions can cause loss of life and serious injuries as well as significant damage to company property, assets and equipment. Therefore, preventing releases of dangerous substances, which can create explosive atmospheres, and preventing sources of ignition are two widely used ways of reducing the risk.

 

Using the correct equipment can help greatly in this, and if your customers operate in such environments, then it is vital (and probably contractual) that your engineers also comply with the regulations. This means that if you want them to benefit from the various positives of a digital workflow then the devices you provide them with must be ATEX certified.

Where can explosive atmospheres be found?

Perhaps surprisingly for some, ATEX workplaces are not restricted to oil refineries, petrol stations or grenade factories.

In fact, many workplaces may contain, or have activities that produce, explosive or potentially explosive atmospheres. Examples include places where work activities create or release flammable gases or vapours, such as vehicle paint spraying, or in workplaces handling fine organic dusts such as sawdust or grain flour - yes even an old flour mill can be a potential home for violent explosions.

So what exactly is ATEX?

As mentioned earlier ATEX is the name commonly given to the two European Directives for controlling explosive atmospheres:

1) Directive 99/92/EC (also known as ‘ATEX 137’ or the ‘ATEX Workplace Directive’) on minimum requirements for improving the health and safety protection of workers potentially at risk from explosive atmospheres.

From the field service providers point of view this is the area of ATEX that your customers need to worry about.

2) Directive 94/9/EC (also known as ‘ATEX 95’ or ‘the ATEX Equipment Directive’) on the approximation of the laws of Members States concerning equipment and protective systems intended for use in potentially explosive atmospheres.

Now this is the one that from a field service operations perspective we need to pay closer attention to, because it is our responsibility to ensure our engineers are given ATEX certified devices if we are sending them into such an environment. Fortunately, many rugged tablets are ATEX certified so selecting one shouldn’t be too big an issue.

So what about those outside of Europe?

OK, so this is where things get a little complicated as there are essentially three separate certifications across the globe. In the USA there is Hazloc which is part of the National Electronics Code.

Hazloc and ATEX aren’t necessarily interchangeable - i.e. Hazloc certified devices would not be acceptable to use within the EU unless they are also ATEX certified.

 

As for us folks stuck in dear old Blighty?

Well when Great Britain pulls the plug on Europe and triggers Brexit as with many EU directives change will be required, although in this instance we’ve pretty much got it covered with our own regulatory equivalent of Directive 99/92/EC which are put into effect through regulations 7 and 11 of the Dangerous Substances and Explosive Atmospheres Regulations 2002 (DSEAR).

However, there is also the IECex certification which is a conformity Scheme developed by The International Electrotechnical Commission (IEC). The hope is that the IECex will eventually become a single mark of conformity that can be accepted worldwide in order to facilitate trade and reduce certification procedures and costs. In essence, “one standard, one test, accepted everywhere.”

Why the ATEX sign is so important

Basically, manufacturers/suppliers (or importers, if the manufacturers are outside the EU) must ensure that their products meet essential health and safety requirements and undergo appropriate conformity procedures.

This usually involves testing and certification by a ‘third-party’ certification body (known as a Notified Body) but manufacturers/suppliers can ‘self-certify’ equipment intended to be used in less hazardous explosive atmospheres. Once certified, the equipment is marked by the ‘EX’ symbol to identify it as such.

Certification ensures that the equipment or protective system is fit for its intended purpose and that adequate information is supplied with it to ensure that it can be used safely - which means that you can assure your customers and your staff that you have taken the required steps to offer safe working conditions whenever challenged by a potentially explosive environment.

 

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A selection of ATEX certified tablets...

AEGEX 10: €2,559.00 Aegex’s modern tablet will be the first of its kind to run Windows 10 furthermore be affirmed ATEX Zone 1, IECEx Zone1 and UL C1D1 for worldwide use on the planet’s most dangerous situations.

PANASONIC FZ-G1. € 2,749.00 The FZ-G1 is built to operate flawlessly in every environment - from intense heat and sunlight, to pouring rain and freezing temperatures.

XPLORE BOBCAT: €2248.92 With a MIL-STD-810G rating, optional hazardous area ATEX/IECEx Zone 2 certification (Pending), and Windows 8.1 Pro, the Bobcat can go from the boardroom to the work site without missing a beat and looking the part in every situation.

Getac T800 ATEX Windows Tablet: €2,317.00 Built for today’s mobile workforce, the new Getac T800 ATEX Windows Tablet features an 8.1 inch display, the latest wireless technology and unique SnapBack add-ons and runs Windows 8.1 Pro

Bartec Agile X Tablet PC: €3,222.00 The BARTEC Agile X is an extremely slim-line, rugged and highly flexible industrial tablet PC for rough environments. Thanks to its broad range of functions, the Agile X is the perfect assistant to service technicians, operating staff, engineers and project managers in the field and in industry.

 

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Marina Stedman, Director Global Field Marketing, ClickSoftware, takes a look at the technology shaping the next phase of field service evolution...

The term Internet of Things (IoT), describes the inter-networking of physical and smart devices, items such as vehicles and buildings and even technology services. Connected interoperability across many devices, applications and infrastructure presents an opportunity for the field service industry to raise the bar on two key areas of field service: operational costs and customer satisfaction.

Operational Costs:

Increased connectivity within a field service operation fosters a predictive model for addressing possible equipment, infrastructure, machine or device failures. The ability to diagnose and address issues and undertake preventive maintenance is essential to saving time (and money) on service calls, cutting the number of service requests made and improving the first-time-fix rate.

Take a building’s HVAC system for example. With today’s increasingly unpredictable weather, warm one day and freezing the next, IoT sensors can monitor temperatures and simultaneously use historical service and on-line data to predict maintenance requirements, failure rates and climate trends. This data can be used to manage service and operational tasks, for example making sure a system is serviced before parts fail and before the first freeze occurs, cutting the risk of breakdown and reducing the need for field service intervention.

Customer Satisfaction

Cost, asset management and effective communication are key components to achieving the ultimate goal: ensuring customer satisfaction.

Customers are unhappy when they have to wait a long time for a service visit, wait in all day for an engineer to arrive or make multiple calls to find out the status of their job. If multiple service visits are needed before a problem can be fixed because the information required for a first time fix is not available, both customer satisfaction and business profitability are impacted.

IoT sensors in devices or infrastructure, linked to real-time scheduling and dispatch solutions can detect potential service outages and make sure that issues are fixed before they become critical. For instance, IoT sensors in a food vendor’s freezers could identify a potential fault and notify the manufacturer that it’s due for a service before the freezer breaks and the food spoils. The manufacturer can quickly schedule an engineer to visit and rectify the issue before the freezer breaks down, saving time and money for everyone.

The IoT technology that we envisaged only five years ago bears no resemblance to what can be done today and it won’t be long before machines will automate decisions and launch actions without human intervention.

3D Printing

3D printers use Computer Aided Design plans to mould thin layers of melted plastic, aluminium, and powders together to form shapes. They started off making simple things like models and toys, but today’s devices have the sophistication and capability to form replacement parts. Why is it then, that few, if any field service organisations currently fulfil field-based replacement part requirements with 3D printed spares?

Maybe they don’t feel that the technology is safe and reliable enough at the moment? This won’t always be the case - here are two things to think about for the future:

Speeding Spare Parts Fulfilment

Apart from people costs, spare parts management is one of the biggest areas of cost for a field service organisation. Anticipating parts demand is challenging, even with the most sophisticated field service software solutions and the rarer the part, the less likely a field service engineer will have it available on-site when needed. 3D printing will make it as cheap to produce single items as it is to produce thousands and introduces the possibility of directly manufacturing finished components on site - reducing inventory costs and speeding up job completion.

Improving First-time Fix Rate

Not having their problem resolved in one visit is a constant source of irritation to field service customers and research has found a direct correlation between first-time fix rates and customer satisfaction. (*Aberdeen Group Fixing First Time Fix) .

As lack of parts to fix the problem is the main reason field technicians visit a customer site twice, field-based 3D printing facilities could enable parts to be printed on-demand, improving first-time fix rate and positively impacting customer satisfaction ratings.

Imagine the Future

IoT sensors in devices send messages to fulfilment and dispatch when a part is at risk of failing.

A 3D printer creates the part and the job is automatically scheduled. The service engineer fixes the problem before the customer is aware of the issue and without any disruption to business or personal life. Sounds like science fiction, it won’t be a few years from now.

Looking for more tips, trends, and future field service technology advice? Check out the Technology section of Field Service Matters.

 

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Value based pricing is a hot topic in industry today, but what exactly is it and why is everyone talking about it?

Is value based pricing simply about getting as much price from your customers as possible? Or is it about valuing your longer-term relationship with your customers, or perhaps improving your service? In fact it is each of these and potentially more. What is clear however, is that cost-plus pricing for services does not always offer the customer or the supplier the best value - yet there may now be options to combat this with value based pricing.

The following report co-authored by Dr Shaun West, Lucerne University and Dominik Kujawski, Arvik Bolting Solutions brings together good industry practices in a solid academic framework. The report provides business leaders with a guide on how to create a value based strategy to price B2B services - as such it is essential reading for all business leaders...

Why value based pricing?

During a conference we recently attended, a phrase that kept coming up in conversation was “We should all switch to value based pricing”. An increasingly topical statement in industry today, however, the approach of value based pricing is also one which is not being discussed any further. No one seems to be speaking about HOW to actually achieve this goal.

Pricing is not new- even Oscar Wilde said: “Nowadays people know the price of everything and the value of nothing”

Companies need to focus on customer value in developing pricing strategies as pricing pressure in the industrial B2B market has been increasing as a result of changing customer buying behaviors. In this article we’ll delve deeper into why value based pricing can be challenging and why it has a huge impact on companies’ business.

Is pricing really a strategic capability?

Pricing is an important management tool to help achieve the firm’s objectives and has a huge impact on the financial results. It is a multi-departmental activity influenced by several functions within the firm that may attach different importance to pricing and the value drivers of the business.

Every business manager needs to be aware that pricing has an impact on customer satisfaction and that pricing is not only dependent on price itself.

Pricing of services is dependent on situations in which a customer finds themselves in and the jobs in which they need to do at that time.

This relation of pricing to customer engagement in this process includes three strategies:

• Cost plus strategy;
• Competition/market base strategy;
• Value based strategy.

Cost plus pricing

The process of cost plus pricing starts with the firm determining the scope of their service. Here, a unit cost is simply calculated and a pre-determined margin is applied to set the price. This margin reflects the desired profitability of the firm. The customers are then told what will be ultimately delivered in exchange for the set price

Competition/market based pricing

This process begins with pricing based both on the scope and the costs, then additionally on what the competition charges for a similar service. Setting the price here has an influence on the market situation. Large competitors tend to have a scale advantage over the smaller ones since their fixed costs are mostly lower due to a larger customer base. The last step of this process is presenting the customer with the value that is being offered through the service.

Remember that data is in your CRM system and in the market – keep track of it.

Value based pricing

The value based pricing approach is based on analyzing each customer’s needs, pains and gains, and their willingness to pay. It depends on the customer interest and acceptance of price for a provided value. Here, the price is set for the offered value, and later the scope of the service itself is determined.

Calculating the costs in this strategy is also necessary as they used to make a reality check and afterwards calculate the margin achieved.

Listen to your customers

The process of pricing in cost and competition based strategies suggests to ask the question “why is the customer situated at the end of the process if all of the companies always state that customers are the most important?”. A juxtaposition to the truth, you will always hear stated that companies involve their customers in the co-creation of service value from the very beginning, but how can this be actually possible with a cost plus and competition based pricing strategy?

Now, how do we turn this approach around and place focus back on the customer? Straight away, let’s forget about pure cost plus strategy.

This ‘simpler’ pricing strategy shows that the supplier can have a lack of understanding of the customer value and as a result the customer offering can be weak.

In addition to this, the competition/market base strategy, which is endorsed by many companies, indicates that pricing is controlled by the market. As such, this removes focus from the customer and indicates that the supplier does not entirely understand customer value, showing that the resultant value outlined by the firms offering can also be low.

So, how should service companies price in order to bring the customer into the focal point? The answer is quite straightforward; by aligning pricing objectives, strategies and tools according to the holistic strategy of the company.

Note: pricing needs to be strategic… it must not be left solely to Sales,

Production or Marketing departments. It needs to be driven by management and agreed by all the departments influenced by pricing Companies should create more customer focused objectives to choose pricing strategies that consider customer value.

This means that when pricing services, you as a firm need to firstly understand how your customer creates value and secondly, where you and your equipment fit into this process. You need to know that pricing tools used also need to support the objectives of pricing and the pricing strategies. For example, a pricing tool supporting customer oriented objectives can be bundling as it is a way for firms to present the scope/price negations, thereby providing a different approach to customer value discovery and leading to improved customer experiences.

Source of pricing power

Here, a B2B example is given, showing that the source or pricing power comes from customer need states. Let me take you through the example of a simple bolt used in industrial equipment. Bolts are widely present in everyday life and more specifically, they are present in almost every technologically advanced machine or construction, from compressor valves and turbines, to the foundations of wind mills.

So, what is the price of tightening a single bolt? The price of a single bolt varies from market-to-market, from machine-to-machine and from company to company.

The most significant result of bolting, however, is the residual load that a customer requires from the bolting supplier. Now, to show where the pricing power of services come from, let’s imagine a situation where you exchange a single bolt worth a couple of dollars, in a compressor valve which is worth hundreds of thousands or install one in an offshore wind turbine, worth even

more. How much should the tightening of one bolt be worth to keep the compressor running or the turbine safe on its foundation?

In this case, bolting provides safety and savings on a huge scale however, the value of the service to each customer varies depending on the scope of the project. Here, not all customers are the same, so they should also not be treated with the same approach.

Customer value connection based on colors

Customer value connection shows that companies need to do what their particular customer values. If the value proposition you offer creates no customer value, it is then only a purely basic cost to your customer.

It is time to use the “knowledge” about your customers to move to customer value propositions and find ways to deliver what is really valued. Hence, what they are really ready to pay for?

Firms need to consider what is core and what is standardized.

It is important to be aware that pricing can be different for different modules. This means that the customer can pay a different price based on the “menu” or “á la carte”, and shows that there are multiple pricing points for services but what is really interesting, is that its components don’t change. So what is changing?

It is the location and more importantly the type of service provision together with the customer need state. In the first mentioned case, the compressor valve is available in a workshop where the bolt can be tightened with use of onshore equipment, in a quite friendly environment.

However, the tightening of wind turbine requires going offshore to harsh conditions with special trainings and guaranteeing the customer that a bolt tightened worth a percentile of the whole wind mill will provide safety from failing the whole project.

This clearly shows that the customer gets usage, location and utility from the supplier. And if a firm is able to segment customer needs states and purposes for buying. It is also able to find the right pricing points for it.

This helps to identify margin and revenue opportunities available to a company.

This shows that that customer value identification process work for product based firms too.

Pricing waterfall for value based pricing

A prototype of pricing waterfall diagram provides guidance towards value based service pricing. It considers the most important aspects of pricing, starting from benchmarking competitors to considering the customers’ willingness to pay. As such, it helps you to triangulate on the value based price that your customer is willing to pay.

The pricing waterfall presents that single, inflexible offerings can limit companies to sharing limited value. Whereas, flexible offerings respond to customers’ changing needs.

Also, flexible pricing based on all important factors helps to increase customer value. Offering flexible service dimensions that support customer choices, together with flexible pricing strategies can provide the supplier with additional pricing dimensions that can have a positive margin increase impact. The pricing waterfall also highlights the importance of triangulation of pricing based on market analysis, internal value creation and customer value.

Final comments

This article presents that pricing is a strategic capability and needs to be kept in line with the company’s overall strategy. There is a great need to focus on customer value creation during service pricing, and aligning strategies and tools to support the objectives set by the company. Understanding customer value rather than simply relying on cost-plus or market-based approach, is a key to pricing industrial services. Another very important step in the process of pricing, is margin calculation based on the identified costs and value price offered. It is essential to calculate the margins in order to assess the correctness and validity of the price.

To summarise, consistency in pricing is of great importance and needs to be maintained across all pricing objectives, strategies and tools used to determine the final price of a service offering. So after reading this article, ask yourself again, “Should I switch to value based pricing?”. The answer is not always, but one can learn to determine situations, locations, needs and pains to price according to value.

 

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Kris Oldland, takes a look at the challenges and benefits of reverse logistics within a field service operation... 

Whilst understanding the service supply chain is a fair challenge in itself, reverse logistics remains perhaps the most complex element of all within the puzzle.

In simplistic terms reverse logistics for service operations could perhaps best be defined when first thinking of how field service works. For field service operations a dispatcher will send an engineer out to a device that needs either repair or maintenance.

Whether it is a jumbo jet engine or a vending machine this type of dispatch is classic field service. Reverse logistics essentially flips this concept. With reverse logistics it is the product that comes to the engineer, rather than the other way around.

The challenges of reverse logistics

There are numerous challenges within reverse logistics – it is not as some would believe simply forward logistics the other way round!

For a start there is the significant challenge of both determining and then tracking the value of an asset.

Lets take a simple consumer example of the repair of a laptop a technician may be sent out to repair a motherboard with a value of say £500 and a the tech replaces the defective motherboard with a working one.

Working within a reverse logistics framework the defective motherboard is sent back to be repaired. However what is the value of the defective part? It is no longer £500 as it doesn’t work. Yet, it is also not zero as the cost of repair may be a relatively nominal amount for a sub-component.

Therefore we have to take into account that the defective motherboard has a value somewhere between zero and £500.

 

And this is just one small characteristic of reverse logistics that makes it such a complex field.

Then things get even more tricky when we add OEMs or third party repair int the reverse logistics value chain mix.

Staying with the laptop example, what if a retailer sold the device? They are likely to have their own service offering, and could do some initial diagnosis either in the field or in store, but if that first tier of maintenance isn’t sufficient then the part may be returned to a repair centre. And if at this point they are not able to resolve the issue then it may be that the motherboard needs to be sent back to the OEM.

In a reverse logistics chain it is vital to keep track of the unit at any given point within the service chain, as well as third party repair and record when the unit is in someone else’s hands. After all, the unit has value, and that value could even belong to the customer.

Then we have the additional complexity of varying warranties from different parties. For example the OEM might supply a warranty that is either in force for a longer or shorter period than the one offered by the retailer. The ability to track such warranties could mean a huge sum in reimbursements from the OEM if it turns out that a part is generally defective.

 

In short the ability to track products within a reverse logistics value chain, even when they are outside of your organisation is hugely important financially as well as logistically.

Why bother with reverse logistics?

Well primarily reverse logistics allows for companies to maintain high level service agreements and SLAs whilst not taking such a severe financial hit that can result from swap-out break fix repairs.

In a field service repair scenario, where the pressure is on to get the customer back up and running ASAP often the simplest, quickest and most efficient solution is to swap out a faulty part rather than repair it on site. Such an approach can lead to greater customer satisfaction alongside higher field service efficiency.

However, to simply dismiss non-functioning parts as scrap is throwing away money.

Whilst your engineer may not have access to the various resources he needs to make a fix on site, or simply not enough time to or the components available to make the repair on site , as mentioned above the defective part may well still hold value if it can be repaired.

 

In a reverse logistics situation, where the device is sent to an engineer on the bench, a company are in a far better position to facilitate the fix. Resources can be more readily consumed, component are more readily to hand.

Also due to the fact that there is less time pressure and potentially easier access to learning resource it is possible for an engineer with less skills to undertake a repair so labour costs can be potentially reduced whilst reclaiming value that may have been lost if the unit could not be repaired.

Is reverse logistics always a good idea?

Another consideration is whether the decision to make a repair is economically viable. Depending on the cost of labour and parts it may be more cost effective to simply send a new unit to the customer.

This is where a dedicated reverse logistics software solution can shine. Such solutions can track what we have used in parts and in labour once enough data has built up within the system.

 

Then if the expense of a repair reaches a specific tipping point a flag can be raised to highlight the fact the cost of repair outweighs the cost of replacement

Once we have reached this point of economic costs, we can determine if the part is economically worth repairing.

Selecting dedicated reverse logistics software

Whilst reverse logistics software can have significant benefits, selecting the right solution can be a challenge as it is not generally a broad product category that analysts and the IT media pay much attention to so side by side comparison can be hard to come by.

As with most software in related to service delivery it is critical to proactively ask questions that relate to you’re own specific business requirements. Remember, no matter how many strong recommendations a software provider has, your needs are unique to you.

 

With this in mind also remember a live demonstration is also hugely important. Don’t accept a simple overview in PowerPoint, as some less scrupulous software vendors have been known to misrepresent what the software, in its current state, can do.

In the case of reverse logistics software, seeing really is believing as it is a niche  area and you want to ensure that your provider both understand the complexity of the process as a whole as well as your specific business needs.

The Bottom Line

The bottom line when it come to reverse logistic is quite bluntly all about the bottom line.

When it comes to reverse logistics return on investment is achieved through effective inventory and spare parts management. Some companies will see ROI by using reverse logistics to simply keep repairable units on the shelf until they are actually needed, saving money by avoiding repair on units that might not be used.

Additionally a company may be taking parts into inventory that, due to the advancement of technology, have become obsolete. Therefore, the right reverse logistics software allows a company to be efficient in the use of their time and inventory.

 

However, effective reserve logistics in a service and aftermarket context  does rely heavily on software that is designed specifically for the task.

Field service requirements for reverse logistics are complex, and will change as relationships with customers, distributors and contractors evolve over time.

But those companies who can come to a full understanding of the impact of reverse logistics on the business will be able to review how their key processes can be streamlined and automated, providing visibility and control over repairable inventory whilst serving their customers better.

 

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Bringing stock management, sales processing and excellent customer service together under one umbrella is often a challenge. Add having to deal with third party logistics and the challenge increases.

Logistics and warehouse software specialists OrderWise have met this challenge head-on with the launch of its latest 3PL (Third Party Logistics) Billing Module.

Jon Roberts, Marketing Manager at OrderWise said: “This latest addition to the OrderWise offering meets the challenges that come with having to handle third party logistics.

Too often, having to organise and maintain customers’ supply chains and payment schedules mean businesses we work with have less time to manage their own stock and orders - adding a further layer of complexity. This module eliminates that time sink and puts you in greater control over billing.”

The latest module to be added to the OrderWise offering delivers a seamless way of managing all aspects of third party logistics. Version 11.5 of OrderWise enables businesses to reap all the benefits of OrderWise Stock Control, Warehouse Management and Mobile WMS Devices, along with new functionality that provides accurate methods of calculating customer charges based on stock handlings.

Jon added: “One of the interesting aspects to this latest module is that it is completely adaptable to meet the needs of the customer. OrderWise Third Party Logistics Billing is the ideal suite of software for any businesses managing stock and fulfilling orders on behalf of their customers.”

Users are able to assign charges for:

• Receiving
• put away
• picking
• packing
• freezing
• delivery
• returns
• storage
• handling of stock 

There is also the facility to add custom charges for bespoke or one-off occasions, offering further flexibility.

Perhaps more importantly, businesses have the flexibility with this latest module to determine whether handling charges are calculated based on a fixed customer rate, per item quantity processed over a custom set billing period or a combination of both.

To calculate billing charges by a fixed customer rate, users simply enter their charges for each handling method against their third party logistics customer records.

Once calculated, billing options have been set, users then simply set customers’ billing frequency and final billing date, with a further option available to merge all handling charges processed between billing periods into one single sum. The rates are then multiplied by the number of stock transactions in order to determine the cost over each billing period.

 

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Could the UK consumer’s passion for Internet shopping be heralding in a new era in parts deliveries for field service engineers? Sharon Clancy reports...

UK consumers are renowned as some of - possibly even the - world’s most enthusiastic on-line shoppers. In the process, they have driven up delivery and service standards, raising expectations of what they consider acceptable service from the companies they deal with to new levels.

They expect to order up to 10 p.m. in the evening and receive delivery the next day – some don’t even object to paying for an early delivery.

What they will object to (and quite possibly take their business elsewhere) is if you can’t offer them a one-hour delivery window or a choice of delivery options.

Faced with the complications and costs of providing doorstep-deliveries that come even close to meeting the ever-rising expectations of hundreds of thousands of consumers, on-line retailers have developed a raft of alternative delivery solutions, including locker banks and click-and- collect points at local stores.

Locker banks for through-the-night deliveries to service engineers are not new, of course. What is new is that, thanks to this huge demand for flexible deliveries of Internet purchases, there has been a veritable explosion in the numbers of locker banks throughout the UK.

They’ve become a common site all over the UK – supermarkets, railway stations, fuel stations. Accompanying that, has been more click-and-collect parcels networks at local convenience stores.

 

On the face of it, this might seem a less secure destination for those vital parts, but in fact the delivery companies have invested huge amounts in ensuring those on-line goods end up with the right customers, so this is a less a concern than it might have been in the past.

Of course, getting this sort of collection right requires integration of order-intake and scheduling, but field service companies have plenty of expertise at that.

It also suits, too, those smaller service companies who rather than have a huge parts inventory, will source required parts from on-line parts suppliers and an on as-required basis.

So how do all these delivery solutions work?

Locker banks

ByBox and InPost are the best known of the European locker bank providers. ByBox actually built its business in providing an overnight pre-8 a.m. secure locker service to the field service sector using its own delivery network.

Located at easily -accessible sites such as fuel retailers, railway stations and supermarkets, locker banks are increasingly popular as a click-and-collect choice.

Consumers like them because it puts them back in charge of the delivery.

Engineers will like them for the same reason – they can collect at a convenient time to them and drop off returns (either pre- or -post the last call of the day, for example).

Behind the apparent low-tech façade of locker banks, there’s some clever real-time technology enabling a seamless collection process.

Security is a top priority - suppliers need to have proof that the correct part was delivered to the correct box, for the correct engineer.

 

There are numerous methods of authorising access to an individual – pin coded access, digital signature, QR code.

Some box banks incorporate video camera images as a further security measure – for themselves and their customers.

When the locker transaction is complete, immediate notification is sent to the sender. In the event of any dispute, there’s a record of box activity.

Once goods are delivered to a locker, of course, it’s no longer available until the engineer collects the parts.

It’s a fine line between allowing the engineer maximum flexibility on when to collect the parts and freeing up the locker for future deliveries – of parts or goods to a consumer.

Goods sitting in a locker uncollected benefit no-one and create locker congestion – a particular issued over busy periods such as Christmas and one that is not going to go away as consumer demand for click-and-collect grows.

ByBox’s expertise has been developed providing secure collection points for parts deliveries to field service technicians. The company has manufactured over 57,000 lockers, installed in 20 countries.

It also licences its technology providing turnkey Click-and-Collect solutions as software-as-a-service to global partners – including UK supermarkets.

Its Thinventory solution incorporates an integrated SupplierDirect service, in which stock can be ordered from suppliers and sent directly to their engineer’s Smart Box before 8am the very next day.

Locker customisation options include self-closing doors, integration of engineer signature and image capture, and the option to provide customer support at the locker via a video link to a customer support centre.

Each locker is connected to ByBox Cloud for real-time management of activity, including door openings and configurations.

The Locker server manager connects to each locker via ByBox Cloud to provide real-time communication with each locker, managing openings and configuration.

InPost operates in 16 European countries and has a 1,000 strong UK network of electronic locker banks. The lockers have integrated closed-circuit TV cameras and barcode scanning capability.

Consumers with smartphones can be sent a QR code as collection authorisation, and the box bank’s central console will be able to scan this from the phone’s screen and open the relevant locker door purely on this basis – potentially making the pickup extremely fast.

 

An API (application programming interface) integrates the click-and-collect service into retailer web sites, offering consumers a choice of the five locations nearest to their target address.

Convenient convenience stores

On-line parts distributors are also able to offer an alternative to locker-collection via local convenience stores.

Convenience store chains have enthusiastically signed up for click-and-collect, attracted by the promise of extra footfall into their shops. From the engineer point of view, they are very local and they tend to be open until late evening.

CollectPlus is one of the biggest with a network of over 5,800 local stores in the UK, including Londis, Co-operative McColls, Spar, Nisa and Costcutter.

Customers simply visit the store and sign for their parcel.

Standard parcel size is limited to 60x050050cm and maximum weight is 10kg – mainly due to potential lack of storage space at the store the customer chooses.

Pay extra, and you’re allowed bigger parcels and more weight.

To allay consumer fears about parcels going astray, CollectPlus provides online tracking and, for £1, a signature as proof-of-collection. Insurance of £50 as standard with up to £300 available.

For sellers with high volumes, CollectPlus offers the option of sending customers an email and/or text including a unique collection code.

The customers present this code and proof of ID to collect their parcel - the CollectPlus store and IT systems do the rest.

 

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Giacomo Squintani of parts management specialists Syncron looks at the challenge of ensuring your supply chain is not the weak link in your field service delivery...

As the overall experiences customers have with durable goods manufacturers become more critical to company success, the strides made in field service management to ensure these positive brand interactions have been remarkable.

Field service technicians not only are the ‘face’ of a company – the individuals interacting with customers on a regular basis – but also key stakeholders in improving performance for the business as a whole.

As a service manager, you must put yourself in both your customers’ and your technicians’ shoes. Your customers’ experiences have improved greatly in recent years. You’ve reduced response times and improved the accuracy of the timing of your technician’s visit while improving first time fix rates. You’ve empowered them with the guidance to fix many problems without visiting them in-person, saving everyone time and money.

For technicians, you’ve reduced their windshield time, turned them into trusted advisors and empowered them with access to all the required knowledge at a click. And, you’re already thinking about the new world that augmented reality could open up.

 

But, what’s the classic problem that frustrates your customers, your technicians and you as a manager?

That’s right. The technician is on time, highly knowledgeable and determined to help, but isn’t stocked with the correct part.

So your brand’s main ambassadors are all too often left sinking in unsatisfactory excuses as unhappy customers stare and shake their heads. And suddenly, that value you’d created through field service management technology investments is compromised by insufficient part availability.

The problem

Many OEMs have successfully grappled with the age-old parts:people challenge, and are reaping its many benefits.

In 2013, AberdeenGroup established that only 45 percent of the companies they interviewed had “increased their focus on service parts management as a result of the added demands from customers to improve service-issue resolution”[1]. Why are so many organisations failing to address a problem that impacts technicians’ effectiveness, brand reputation and customer loyalty, tying up cash in vans and warehouses in the shape of unnecessary, often obsolete stock – ultimately harming profits?

Furthermore, Aberdeen found that only 48 percent of those organisations leveraged “service parts management to increase collaboration across business functions and service,” in spite of the unassailable notion that “the value that other functions can glean from valuable service parts data is immeasurable.”[2]. Highlighting the efficiency losses of a disconnected service ecosystem, the report concluded that “the success of field service is very much dependent on the parts and vice versa”[3]. And yet…

 

In a separate report, WBR established that, when establishing the criticality of future investments, only 8 percent of executives were considering inventory management.

Yet, when they examined the sources of customer complaints, the biggest contributing problem was parts unavailability, cited by 55 percent of service executives. Failure to fix the issue on the first visit, the engineer’s arrival time and their lack of experience generated far fewer complaints, with rates of 35 percent, 29 percent and 12 percent respectively[4]. These negative experiences leave your customers baffled and frustrated with a negative perception of you brand.

The solution

Resolving these types of customer issues and experiences is perfectly feasible.

Technologies exist for this very purpose – service parts management and scheduling solutions interacting together to ensure that when your technician arrives to the right place at the right time, they have the right part to keep your customers happy and encourage repeat business.

Solutions specifically built for the service business, with all of its challenges around low-volume, ‘just-in-case,’ intermittent availability, rather than for high volume, predictable, ‘just-in-time’ throughput.

 

Service parts management can make your technicians’ lives easier, and in turn positively impact each customer’s experience with your brand.

As outlined previously, technicians’ responsibilities are broadening: their job no longer ends when the issue is resolved, it entails acting as trusted advisors, identifying opportunities for further business and potentially maintaining other vendors’ equipment. And, most importantly, are the ones interacting face-to-face with your customers.

Room for improvement

Service part inventory networks are complex – a part may go through central warehouses, distribution centres, regional stocking locations and secure local collection boxes along its journey to a technician’s vehicle. Oftentimes, technicians will end up being over-stocked, causing unnecessary restocking at the warehouse.

Hurt by online shopping, brick-and-mortar retailers are providing spare part stocking locations to bridge the physical gap between technicians and end customers.

These scenarios should be embraced by service teams: the greater the complexity, the greater the potential for efficiency improvements in the service part supply chain. Once routing and scheduling have been optimised, further benefits can only come from other processes within the service ecosystem, and service part inventory management, with its potential to reduce costs across multiple echelons within the supply chain, can deliver quick gains.

 

With switching barriers lower than ever, in a competitive landscape where you are not only fighting rival OEMs but also independent service providers, you owe it to your technicians to empower them with the right tools for the job.

You owe it to your customers, too. And, having established fantastic efficiencies in field service management, there is far greater scope to drive value and ROI by optimising your service part supply chain. Enable your techs to drive an awesome customer experience at every interaction by ensuring the right part for the job is at hand when and where they need it.

 

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[1] AberdeenGroup, “Service Parts Management 2013: Align Planning and Forecasting with Efficient Resolution”, p. 1

[2] AberdeenGroup, op. cit., p. 3

[3] AberdeenGroup, op. cit., p. 7

[4] WBR, “Where Service Meets Sales: Automating for the Future of Field Service”, p. 10

 

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Would you like to be part of a worldwide consortium of leading technology companies and industry associations committed to delivering exceptional service and support, and at the same time enhance and innovate your service and support capabilities and performance?

Join Noventum’s new project on defining a new chapter of the Service Capability & Performance (SCP) Standards - Service Parts Management. Through your participation in this standards development project, you will work with other leading companies to identify best in class practices, processes, performance benchmarks and capabilities necessary to operate a world class Service Parts Management operation. Once established, you will be able to obtain certification against the new standard by undergoing a rigorous audit of your service parts management function.

The SCP Standards are a suite of best practice standards for managing service operations.

They are developed by Service Strategies Corp together with their European partner, Noventum Service Management, and they are designed to improve the quality and effectiveness of technology service operations. Currently, over two hundred service organisations around the world use the SCP Standards to improve their business operations and deliver top-quality service and support.

Industry leading companies that have already adopted the internationally recognised SCP Standards include Schneider Electric, Advent Software, Fresenius-Kabi, Fuji Xerox, McKesson Corporation, Bobst Group, Teradata Corporation and many others.

With approximately 200 participating organisations and over 1500 certification audits performed worldwide, the SCP Standards represent the most widely adopted service quality program available today.

Click here to request more information about the project of defining the SCP Standards for Service Parts Management and learn how you can be part of it.

 

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Spare parts and inventory management is an ongoing challenge for field service companies, Sharon Clancy looks at some of the main solutions available to help ensure your engineers are never waiting for parts....

Right part, right place, right time is as important as having the right engineer in the right place at the right time.

With many supply chains now global, ensuring the right parts are in the right place is also a case of managing supply chains.

It’s a fact recognised by the top service management solution providers, Advanced Field Servicel, IFS and ServiceMax are among those who incorporate parts inventory control and management as part of their service management software.

The modules allow you to replenish, automate processes such as pick, pack and ship and monitor stock levels. However, keeping track of the spare parts is one challenge.

Actually getting them to your engineers when they need it is another problem entirely. So let’s take a look at solutions for both., looking first at getting the parts to our engineers.

There are a number of different solutions to help field service companies tackle this.

Supply chain companies in parts logistics 

Global supply chain management specialists have recognised that the requirements of service parts logistics sits neatly with their expertise.

They already have just-in-time delivery credentials for manufacturing, so are ideally placed to extend it into aftersales support.

DHL, for example has a division called Service Logistics that integrates spare parts delivery, on-site and return-to-base repairs, returns, exchanges and recycling. “The larger the field service team, the more complexity involved. Engineers can be spread geographically, fixing a wide range of equipment from a variety of suppliers”

It taps into DHL’s worldwide network that includes mission-critical same-day deliveries with lead times as short as one hour.

The larger the field service team, the more complexity involved. Engineers can be spread geographically, fixing a wide range of equipment from a variety of suppliers. Getting the right parts to the right engineer or right customer can be challenging. Inventory costs money, which is why no-one wants to hold it.

 

Parts suppliers might offer shared warehousing and remote stock locations. As noted earlier. field management software often includes parts inventory visibility and planning.

Another option is CEVA who provide call centers staffed with highly trained operators to take orders, organise deliveries and book maintenance calls, ensuring your customers receive the highest level of service.  Delivery of scheduled and mission-critical spares to your customers, field engineers or stock rooms according to your service level agreements is available.

They are also able to provide returns and reverse logistics by managing the reverse flows of surplus or damaged products back into the network, where we undertake screening before repair, reuse or disposal, minimising cost and maximizing your revenue wherever possible.

They can manage the logistics of your swap and repair service, improving visibility to reduce cost and improve reliability. Another option available from Exchange Logistics is their service parts logistics offering - through a network of strategic stocking locations they can manage the delivery of ‘mission critical’ and scheduled parts to your field engineers.

Overnight deliveries

Overnight deliveries have become a key component in parts logistics for service people.

Automotive dealers have got parts logistics down to a fine art – to keep their customer satisfied the vehicle needs to be back on the road as soon as possible, not waiting for a part to arrive.

At the same time, most of the automotive parts warehouses are centrally located in one or two locations across Europe.

 

This has required investment in order and in the infrastructure necessary to get those parts sometimes a thousand miles, overnight – by boat, road or plane.

In the UK, logistics provider Bespoke Distribution Aviation (BDA) specialises is overnight delivery of spare parts and vital components for the automotive, media and agricultural sectors using its own distribution network and fleet of planes and trucks.

The company has eight gateway hubs for both air and road routes across Europe, including Germany, France, and Ireland. The firm flies freight into Coventry overnight in order to meet next-day delivery times.

BDA has invested in Civil Aviation Authority approved screening technology to process air cargo quickly. its own outbound freight to its Ireland hub, as well as scanning inbound and outbound freight to its hubs in Frankfurt and Maastric.

BDA says its greatest strengths lie in the time critical spare parts supply chain with late mainland European collections for Through The Night Pre 07:00 and 08:00 delivery in the UK, Early Morning Pre 09:00 and 10:00, Next Day and Same Day delivery solutions and returns logistics.

Collection can be up to 8.30 pm depending on distance from the nearest hub.

Returns can be collected at the point of delivery so engineers are left with stock that could be used elsewhere. BDA can handle all of your shipment types from packet, parcel and pallet through to long length and oversized items.

ByBox of course pioneered in night deliveries to secure and conveniently located lockers, in order to bring parts closer to engineers ready for 8am.

Inventory management 

Creating a parts stocking strategy to respond to global service demand is challenging when you rely on inadequate tools or traditional manufacturing-centric supply chain methods.  PTC points out that it's tough to get an accurate service parts forecast when you have a mix of fast- and slow-moving parts with sporadic demand, a large array of parts due to extended product support, and the added complexity of managing new part introductions and last time buy.

PTC Service Parts Management is designed to make sure that you have the right parts available at the right time and the right place, which helps you meet your customers’ service parts needs by balancing the unique complexities of the global service supply chain.

Delivery Connect from Blackbay records a full audit trail of actions that have been performed on a package during the package lifecycle within the network.

This is visible to operational staff through the Delivery Connect web application but the data is also accessible by the companies own systems through integration via the Delivery Connect API.

 

Delivery Connect includes a rich dashboarding and reporting tool that provides visibility to operational staff of exceptions with their area of the business.

By comparing the current location of a package against the expected location which is either stored within the package data in Delivery Connect, or is derived from actions that have been carried out on the package (scan to route, delivery to depot etc), exceptions are clearly visible to the operational staff.

For example, a package that has been delivered to one depot, but which has a delivery postcode belonging to a route which is associated with a different depot, would be visible through an exception report or dashboard.

The application also gives visibility to operational staff of collections and deliveries that have not been made but which are past their time window or the time window is in jeopardy enabling them to take corrective action with the driver – communication is possible via the in-built messaging system.

Operational staff can make corrections to incorrect package data (eg contact details, address details and these updates will automatically be applied to the driver/courier handheld manifest.

Returns management 

Field engineers often need to return spare or broken parts – either to a warehouse, back for repair or, if under warranty, to the original manufacturer for inspection.

Blackstripe from ByBox is designed to make it easier for engineers to do this and for the part to be tracked through the network.

Engineers a simply attach a Blackstripe label to the package over the original delivery barcode.

 

The item is then routed it back to the originator, creating a faster return loop and ensuring it arrives at the correct final destination, with total traceability at all stages.

Engineers then just drop the return part off at their ByBox drop box, from where it will be collected and automatically sent on the correct route via Bybox’s Coventry hub.

All the information required is contained within the electronic label, so there is no need for engineers to take on the job of ensuring the label is correctly addressed.

The service engineer that goes to his customer and uses some of the spare parts in his van for example.:

If he uses the connection of a barcode scanner and their link.connect API, he can scan the spare parts and the warehouse can start preparing the box that he needs to have for the next day.

 

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