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ByBox, specialists in smart locker technology and field service solutions, today announced a strategic investment from Francisco Partners, the firm who acquired ClickSoftware in 2015 and who currently values ByBox at £221 million.

The private equity firm backs ambitious technology-enabled businesses and will support ByBox’s expansion of its UK infrastructure and global deployment of its ‘Konnect’ app-locker solution.

“ByBox is a great company with a clear and increasingly critical proposition. Its success comes down to great leadership, outstanding customer service and relentless development of its solutions. Listening closely to customers and really understanding market trends have made ByBox an extremely investible business,” remarked Deep Shah, co-president, Francisco Partners.

Working with Francisco Partners will enable ByBox to accelerate the deployment of its ground-breaking app-locker technology both in the UK and across key global markets. ByBox’s app-lockers systematically address the core challenges of the field service supply chain. This should be welcome news to ByBox’s customers, who grapple constantly with how to permanently extinguish unnecessary costs.

[quote float="left"]We’re excited to help ByBox support its existing UK customer base with new offerings, accelerate its international expansion and penetrate new industries.[/quote]Petri Oksanen, partner, Francisco Partners commented, “We’re excited to help ByBox support its existing UK customer base with new offerings, accelerate its international expansion and penetrate new industries. Our growth experience will complement ByBox’s inventive nature and intelligent solution set in continuing to drive real customer value into the global field service market.”

The transaction marks an exit for LDC, a mid-market private equity investor. LDC originally provided £37.5 million of development capital in 2016. In the last two years, the business has grown significantly and doubled in value.

“LDC are insightful and supportive investors who have worked closely with the ByBox team to formulate and execute a successful strategy. The next phase of this strategy is characterised by ongoing investment in our UK business as well as driving our international expansion. FP has a tremendous track record and will be ideal partners to help us deliver this growth,” commented Stuart Miller, co-founder and CEO of ByBox.

“ByBox is a great example of a company with a winning combination of innovative problem-solving technology and fantastic customer service. Under the impeccable leadership of Stuart and his team, ByBox has grown to become a real market leader in its field, two years ahead of plan,” said Alastair Weinel, investment director at LDC in the South. “Together, we’ve generated significant value and have opened the door for even further expansion. We know this ambitious management team isn’t finished yet and wish the team every success in the next phase of their journey.”

“The world is increasingly dependent on technology. When the tech fails, the world stops working. So field service has never been more critical – which is why everybody at ByBox is so excited to be an increasingly critical part of the future solution set. The backing from FP allows us to go faster and to deliver the next phase of our ambition for our customers,” concluded Miller.

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Cleverly connecting the transport world and creating first-class added value - that is what this year's Krone motto "Clever Connections" for the IAA Commercial Vehicles stands for.

"We are making the trailer ready for the future with artificial intelligence and networking our products with suitable services for more mobility and more efficient logistics. This ensures safe transport of goods and prompt provision of all important transport data. We place the highest demands on our portfolio and constantly renew our quality promise so that our customers are on the road even more economically," explains managing partner Bernard Krone.

The innovative family business from Emsland presents numerous vehicle highlights as well as its 360° service for commercial vehicles. These comprehensive services, such as flexible full-service offers, fast spare parts logistics and intelligent telematics solutions are a particular focus. These optimise the operating times and total cost of ownership (TCO) of freight forwarders.

This creates first-class added value for the tough daily transport routine in logistics. Krone makes the trailer ready for the future. The Smart Trailer Check ensures optimum transport conditions even before the journey starts. A convenient overview of free capacities in the trailer is provided by the Smart Scan load space detection system and further networking with freight exchanges in Smart Capacity Management ensures optimum use of the free space. All this is linked in the Krone Telematics Portal and makes transports even more efficient in a clever way.

 

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Inner city congestion has long been a major cause for consternation for field service organisations, but with environmental factors such as air pollution becoming increasingly high on the political agenda of many countries across Europe and beyond, additional regulatory challenges are fast adding to the issue as Claudine Mosseri, General Manager, Field Services, ByBox explains...

The issue of air pollution in the UK is high on the political and environmental agenda, following a High Court ruling in February that the levels in many UK cities are ‘unlawful’. Given increasing pressure to do more to tackle this issue, along with rising inner-city congestion, councils are looking at new initiatives to cut traffic. These include calls for congestion charges, zero emissions zones and even a rumoured cable car for Oxford.

The estimated cost of congestion in the UK is predicted to rise 63% by 2030, to a cost of £21bn. British roads are some of the most populated in Europe, with double the number of traffic hotspots than Germany and France.  The estimated cost of congestion in the UK is predicted to rise 63% by 2030, to a cost of £21bn. London, of course, is top of the congested heap. Its weight of traffic is set to also increase by 60% by 2031, according to Transport for London (TfL).

A major contributing factor is the number of delivery vehicles on the roads during peak times. TfL states a quarter of London’s traffic during the peak hours of 7-11am is freight. It’s easy to see why the numbers of delivery vans on the roads are increasing. The number of workplace deliveries being ordered by people who cannot accommodate home delivery is rising. Expectations when it comes to next day and even same day delivery of items are high. And according to TfL, van space itself is often underutilised, with many shipping fresh air and making multiple stops around the capital. In response, the London transport organisation advocates greater delivery consolidation – ensuring more space, in fewer vehicles, is used more effectively.

While TfL has focused on delivery consolidation, there are also options around changing delivery times themselves. This would spread out the weight of traffic and avoid peak congestion hours. After all, when roads are busy, it becomes a vicious cycle of more delivery vehicles being stuck in traffic, further reducing their efficiency in getting from drop-off to drop-off. It seems unlikely that consumer demands about quick and convenient delivery will decline – and of course as businesses and cities themselves become ever more dependent on technology due to the integration of smart ‘Internet of Things’ devices and other automation, there will also be a rising need in urban areas for quick provision of replacement parts and engineers to provide fast and efficient fixes. Without exploring different solutions for getting these parts from point A to point B, this could easily lead to more vehicles on the road, simply trying to minimise the impact of device downtime.

Until recently, delivering during off-peak times was not possible – where would be open at two in the morning to take delivery?Until recently, delivering during off-peak times was not possible – where would be open at two in the morning to take delivery?

Yet now, there are networks of consumer click and collect locations in newsagents, stores and locker banks all over urban areas, many of them accessible 24/7. Similar solutions for part delivery have been used across the country for years to increase efficiencies in the field service supply chain. These 24/7 accessible, fixed point delivery locations not only reduce the number of stops delivery vehicles make but also reduce the numbers of vehicles on the road in city centres. Using this kind of point-to-point delivery planning with lockers, located in convenient, edge of city locations, essential parts are easy to access with minimal environmental impact and maximum speed.

Delivery to these locations overnight reduces failed deliveries, allows for the more efficient use of vehicle capacity, and doesn’t add to the existing congestion problem. For businesses with a high frequency for these deliveries, or where the delivered parts are especially time-sensitive or high value, hosting their own secure drop-off location could well prove a significant boon in timely delivery of essential items.

Some believe that clogged and congested cities are a problem that will only get worse. At ByBox we believe no problem is insurmountable.With predictive analytics on stock levels and given increasingly ‘smart’ devices communicating their status back to businesses, it is even possible for these holding stock and collection points to house particularly critical parts in advance of breakdowns, so they are to hand well before they are needed as well as being able to collect multiple items from one location at the same time.

Some believe that clogged and congested cities are a problem that will only get worse. At ByBox we believe no problem is insurmountable.

New thinking facilitated by technological innovations which can reduce transportation costs and optimise delivery routes can also help to tackle some of the issues around inner-city congestion and air pollution. By approaching the issues differently when it comes to vehicle use, drop-off and delivery schedules can answer on environmental necessities, the effective flow of traffic around urban areas, and the needs of demanding and always-on customers.

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Ensuring your field service engineers are best positioned to deliver a first-time fix becomes a moot point unless you have an efficient service supply chain.

Claudine Mosseri, General Manager, Field Services, ByBox outlines the benefits of outsourcing this critical function...

Running an effective supply chain can seem like a necessary evil for many businesses.

With multiple touchpoints and high margins for error, supply chain management requires a comprehensive and considered approach.

Running an effective supply chain can seem like a necessary evil for many businesses.After all, being unable to successfully deliver goods to customers is detrimental to both service and reputation. For many companies, a solution to the supply chain conundrum is to outsource the operation – either in its entirety or in parts – leaving them to focus on the day-to-day running of their operation and growing their business.

Supply chain collaboration goes beyond transactional relationships in warehouse management and transportation to encompass value-added processes, such as demand planning, configuration and returns management. At ByBox, we have made significant investments into effective parts management and increasing stock visibility.

Our approach is to move the data, not the part.

What does this mean?

It enables us to take a holistic view of where all spare parts are, whether they are with an engineer, in a warehouse or stock holding facility, or in a secure location such as a locker bank. This view of the supply chain provides customers with new ways of getting an item from A to B.

Establishing a dramatic improvement in inventory visibility is at the heart of next-generation supply chain methods.Establishing a dramatic improvement in inventory visibility is at the heart of next-generation supply chain methods. Historically, pallets of parts have been moved blindly through distribution networks, only to be moved somewhere else the following day. Our approach exposes that data, helping customers make informed management decisions.

All movements can be traced in real-time online to see at precisely what stage of the supply chain a customers’ part is located. As a result, businesses spend less money on same-day transport and unnecessary stock holding.

Modern logistics is constantly moving forward, with businesses trying to stay on top of the latest trends and technologies while satisfying customers. Re-evaluating supply chain partners can help businesses to speed up service, improve customer experience and review costs.

There are additional reasons for reviewing visibility within a supply chain:

1. Increased Efficiency:

Working with a partner that understands the need for efficiency can help you increase it within the business. By exposing real-time data and full visibility of stock movements, your technicians always know what parts are available for collection.

Visibility in a supply chain not only reduces stock loss but also provides clarity over what jobs can be completed.

2. Saves Time and Money:

When you outsource to an external partner, you can save a great deal of time and money by cutting down on wasted stock. Finding suitable space to store your products, a means for transporting them, and qualified staff to carry out the dispatch process can quickly add up.

Outsourced providers can leverage economies of scale, and scope, to provide compelling value-added services.

3. Consultancy:

Exploring more effective ways to manage and improve the supply chain could take up a great deal of time.

The same goes for hiring a team of staff and providing them with necessary training. Working with a business that invests in spare part visibility can provide you with the information needed to reduce stockholding, while also increasing efficiencies and SLA performance.

4. Scalability and Flexibility:

Outsourcing some of your supply chain management needs can lead to more flexibility to scale up or down, accommodating your current, and future, business requirements. As your business needs change, you’ll need to be able to adapt accordingly.

Not having enough space, manpower, or transportation could prove detrimental to your business.

By working with an outsourced company, you have access to their knowledge and resources, which means expert help in developing a more extensive and appropriate infrastructure.

5. Adapt to Customer Demand:

Customers now demand 100% uptime of technology in the field and are intolerant of failure. To achieve this, businesses are required to get vital spare parts to field engineers as quickly as possible. At ByBox, we don’t believe this should come at a higher cost, which is why we don’t rely on same-day deliveries.

Our unique technology is paired with app activated locker collection, so engineers can access parts delivered overnight, whenever they need them.

Outsourcing your field service supply chain, focusing on stock management and visibility can mean you’re better equipped to cope with changing business requirementsIn conclusion, outsourcing your field service supply chain, focusing on stock management and visibility can mean you’re better equipped to cope with changing business requirements, shifts in customer demands and changing market conditions.

Using a supplier that offers full visibility and flexible solutions - such as locker delivery - can reduce cost on stock, transportation and overheads. It’s not just about reductions, the right partner can also increase efficiency and customer satisfaction, adding value to your business and reducing the bottom line.

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ByBox, providers of smart locker technology and field service solutions, today announced its new offering for the retail market – Switch. While at Retail Business Technology Expo (RBTE) in London, ByBox showcased its new service using Bluetooth-enabled lockers.

Using a locker network and technicians, retail technology providers are able to ensure same-day fixes via pre-positioned stock. Understanding the needs of UK high streets, ByBox has located its smart lockers in easy to access areas, enabling technicians to quickly and simply collect spare parts to meet demanding SLAs.

Independently conducted research, sponsored by ByBox, shows that one in ten shoppers will abandon a purchase due to non-functional in-store technology and over one-third of shoppers have been unable to complete purchase due to technology failure.

With Switch, we aim to raise the benchmark of standard, same-day repairs and service SLA“As retailers reimagine the entire in-store customer experience, technology is paramount to building a more connected and more personalised environment,” comments Simon Fahie, managing director – global technology, ByBox.

“Digital strategies can no-longer be reserved for online, they are integral to creating a consumer destination that builds brand experience and customer loyalty. Such a reliance on technology means the consequences of equipment failure have grown exponentially.  With Switch, we aim to raise the benchmark of standard, same-day repairs and service SLAs, enabling retailers to protect the consumer experience and brand loyalty.”

As soon as a failure is logged via the Switch HQ, a ByBox field service engineer is alerted through an app and directed to the nearest stock location; often on the outskirts of high streets and retail parks. Once the spare part is collected, a fix is carried out and the failed component part returned to a locker to be logged and correctly disposed of or re-serviced. ByBox pre-positions stock and replenishes overnight or by one of its forward stock locations (FSLs).

Switch is made possible by ByBox’s investment into its network of smart lockers around the country, which combine Bluetooth-enabled locks, a mobile app and cloud platform, allowing case-by-case access and full visibility of stock levels.

With Switch, technology operators can maintain competitive SLA performance for retailers, offer a premium service with reduced pricing, improve first-time fix rates and lower overheads.

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Blockchain, the technology developed to enable the crypto-currency Bitcoin has become the latest big buzz phrase technology across industries worldwide, but is it just hyperbole or can it be an important factor in the future of field service?

Business across the world are turning their attention to BlockChain right now and in the majority of cases, the main focus of this attention is centred around Bitcoin, the first globally recognized digital (crypto) currency that has hit the headlines largely for huge spikes and dips in its value across the last 12 months.

However, whilst Crypto-Currency is the most widely understood application of Blockchain technology, there may be a number of other applications which could be far more important to how the field service sector operates.

Blockchain 101

So for the uninitiated lets first get our heads around exactly what BlockChain is...

To begin a blockchain is a continuously growing list of records, called blocks, which are linked and secured using encrypted codes. Essentially, each block will typically contain a cryptographic hash of the previous block, alongside a time stamp and the transaction data.

Perhaps the most critical point to comprehend about blockchain is that by design, a blockchain is inherently resistant to modification of the dataPerhaps the most critical point to comprehend about blockchain is that by design, a blockchain is inherently resistant to modification of the data. The technical language is that it is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.

When used as a distributed ledger, a blockchain is generally managed by a peer-to-peer network which adheres to the same protocols for validating new blocks collectively. What this means is that in practice, once the data is within in any given block it can not be altered retroactively without the alteration of all subsequent blocks. The particularly clever part here is that as each peer within the chain is working as part of the collective, such a change requires the collusion of a majority from the network - this makes pulling a fast one anywhere along the line pretty much near impossible.

Thus blockchains are inherently secure by design.

For the more technically minded amongst us, one could suggest quite rightly that the establishment of blockchain has meant that decentralized consensus has become realized, with blockchain ‘exemplifying a distributed computing system with high Byzantine fault tolerance’

For those of us who are perhaps more interested in the outcomes, however, essentially what we need to know is that due to the way they have been designed they are highly suitable for the recording of information that needs watertight security - such as medical records and of course financial transactions - which is where it all began.

Whilst Blockchain is rapidly gaining attention, it is the crypto-currency that it was created for use with, Bitcoins, even more widely recognized within the mainstream.

Blockchain was invented by wonderfully mysterious Satoshi Nakamoto back in 2008 as Bitcoin’s public transaction ledger.

Indeed it was the invention of the blockchain that allowed bitcoin to become the first digital currency to solve what is known as the ‘double spending problem’, without the need of a trusted authority or central server - essentially making crypto-currency viable.

So it’s just a new way of taking payment?

Well no, as we alluded to at the top there could be a lot more to how Blockchain plays a role in field service which we’ll go into shortly - but whilst we are at it there is certainly a case for adding crypto-currencies to the list of how your organisation receives payment for the services delivered - especially if you are serving the consumer directly.

Certainly whilst crypto-currency is by no means a mainstream payment method as yet, an increasing number of businesses are starting to accept it and with a lower barrier to entry than accepting plastic, any business in any industry has the ability to adopt crypto-currencies.

In Japan alone, an estimated 260,000 businesses were reported to offer the cryptocurrency as a payment channel in 2017.In Japan alone, an estimated 260,000 businesses were reported to offer the cryptocurrency as a payment channel in 2017.

But what are the benefits of accepting cryptocurrencies such as Bitcoin for a business?

There are plenty of positives in doing so but some key reasons cited in an article on business.com include:

• Eliminate chargeback fraud: A Bitcoin transaction is immutable. Once a client has paid for a product or service, the money is in your account. Unlike credit card payments, charges cannot be reversed.
• Immediate availability: There is no third party-dependent waiting period the way there is with bank-owned payments.Once payment is successful, the transaction amount is in your wallet and accessible immediately.You can convert Bitcoin into your local currency fiat at the end of each transaction, at the end of each working day or according to a custom set schedule.
• Lower transaction costs: Credit card payments usually end up costing you a 2 to 4 percent fee.With Bitcoin, this amount is a low flat fee, not a percentage of the transaction.
• Attract new customers: As Bitcoin rises in popularity, more users seek out participating businesses. This can mean exposure to a clientele you didn’t have before.
• Garner publicity: Bitcoin makes the news in a way fiat currency can’t. Local, national and even international news outlets are reporting on businesses taking Bitcoin payments, giving you an opportunity for free publicity.

Fixing the holes in the Internet of Things

However, as mentioned above, within the field service sector Blockchain has a huge amount more potential than just facilitating an additional means of receiving payment.

Firstly, there is its potential application within the Internet of Things - which is set to become the fundamental backbone of service delivery in the future - although widespread mass adoption is still arguably held back due to security concerns, a very real example of which being realized back in October 2016 when an unprecedented distributed denial of service (DDoS) attack involving an estimated 100,000 compromised devices in the Mirai malware botnet nearly brought the Internet to its knees in 2016 provided a clear indicator of the precarious state of IoT security.

The root of such weaknesses lies essentially within the security architecture of the IoT itself.

IoT architecture relies upon a distributed client-server model which uses a central authority to manage both the IoT devices as well as the data generated across an IoT network.

For IoT data to be trusted, all trust requests are aggregated into a single location which creates a sole point of security intelligence that can compromise IoT security. This is how Mirai-style botnet attacks can succeed.

Basically, during such an attack, IoT devices are unable to adapt their behaviour because they are not considered “smart” enough to make security decisions without the help of the central authority.

In an interview with computerweekly.com Joseph Pindar, Director for Strategy in the CTO office at Gemalto, and co-founder of the Trusted IoT Alliance, a non-profit group that advocates the use of blockchain to secure IoT ecosystem outlined why he believes Blockchain could hold the answer to true IoT security.

Pindar explained how blockchain removes the single point of decision-making that leads to failure, by enabling device networks to protect themselves in other ways, such as allowing devices to form group consensus about what is normal within a given network, and to quarantine any nodes that behave unusually.

Blockchain can play a crucial role in building trust in IoT dataIn addition to this blockchain can play a crucial role in building trust in IoT data by enabling what Pindar called the five digital security primitives: availability, auditability, accountability, integrity and confidentiality.

In blockchain, data is automatically stored in many locations and is always accessible to users.

For auditability and accountability, a private, permission-based blockchain is used – where all users are authorized to access the network – and because all data stored on the blockchain is signed, each device is accountable for its actions.

With regards to integrity, blockchain is as we’ve outlined above a public ledger of data entries.

With every entry, deletion or correction of data being confirmed across the network across a fully verifiable complete chain of events.

Further to this, there is also another perhaps less obvious but equally important benefit of utilizing Blockchain within IoT systems which Pinder raises.

There is a fairly widespread mindset amongst IT executive management regarding securing the industrial Internet which is that once a sensor, device or controller has been deployed and is working, it cannot be touched.

“Even if there is a known security vulnerability, it is not worth fixing it, because there is a chance that the security patch would cause problems elsewhere in the system that no one knows how to fix,” explained Pindar when speaking to Computer Weekly’s Aaron Tan “But as cloud computing has demonstrated, there are continual failures of devices and systems when operating at very large scale.”

“Simply put, it is not possible to manage large-scale systems that are fragile and not resilient to failure – as is the case with many current industrial IoT and OT systems.”

And the solution to this which Pindar recommends is to allow continuous deployment of software updates, alongside blockchain technology after devices have been deployed, with little or no downtime through an over-the-air update system - something he believes delivers both cost and operational efficiency when delivering over-the-air updates and patching to IoT devices and sensors.

With the IoT becoming more and more prevalent amongst field service organizations, the suggestions Pindar makes regarding the application of Blockchain in such systems should indeed be an important consideration for field service organisations as they establish their IoT processes.

The final piece of the 3D printing puzzle?

However, there could be yet another important place for blockchain within the field service sector, it could just be the missing piece of the puzzle in resolving one of the biggest challenges within our sector, namely managing the spare parts supply chain.

3D printing has for a long time been touted as a potential solution to getting parts needed to engineers as soon as possible, but one potential hurdle has always been how organisations control the licensing of the spare parts to ensure that firstly if the customer has 3D printing capability on-site - which has been one suggested use case, how can the provider ensure they don’t simply print off as many parts as needed once they have initially received the schematics file.

Similarly, by sending the parts data across in a digital file, the potential for such a file to make its way into the hands of unscrupulous third parties happy to make unauthorized parts for sale elsewhere is also a cause for concern for many organizations. Frankly, the risk to their IP and the significant loss of revenue this could lead has meant that many OEMs still view 3D printing with a distinct lack of trust.

However, could Blockchain perhaps hold the solution to such fears?

This certainly seems to be the thinking behind one Italian startup called 3D-TOKEN, which aims to integrate Blockchain and 3D printing technologies, in order to create a “unique, decentralized, global Just-In-Time Factory 4.0 for this century’s digital revolution.”

If successful it could certainly set a precedent for how Blockchain and 3D printing could work in harmonyAside from cramming as many manufacturing buzz phrases into their mission statement as possible, it seems it is certainly a concept that could have a potentially huge impact on service organizations within OEMs.

The goal for 3DToken is to connect thousands of 3D printers in a network hub based in Blockchain. In short, the plan is to create a Blockchain-managed network hub of desktop 3D printers.

The project will be used to bring just-in-time small-to-medium scale digital manufacturing to a new level.

Coin Telegraph described the startup as being capable of “accelerating the 3D printing market to its full potential” by changing up industry norms on product cost and time to market.

Whilst this project is still very much in its infancy, they have made impressive progress to date and although the focus on desktop 3D printers would suggest a consumer-centric approach initially as opposed to something suited for industry, if successful it could certainly set a precedent for how Blockchain and 3D printing could work in harmony, and the concept should at the very least give many OEMs food for thought as to how they could harness the potential of 3D printing. Especially as a means of bypassing much of the often highly complex service supply chain.

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Ahead of the forthcoming inaugural Spare Parts Summit being held in Warwick, UK on April 12th, Field Service News Editor-in-Chief, Kris Oldland talks to Thomas Igou, Content Director, Copperberg about the impact the growing trend of servitization will have upon the spare parts sector...

In his role as Content Director with conference producer Copperberg, Thomas Igou has been at the heart of conversations in both the Field Service and Spare Parts sectors for many years now. So who better to assess how the continued trend of servitization is impacting on both sectors?

With Copperberg launching a new UK focused version of their highly respected European Spare Parts Forum I was keen to get his view of what the key issues facing those working in the Spare Parts sector were and if the introduction of outcome-based contracts would require a rethink of how manufacturers align there field service and spare parts operations.

“There are three main themes on the macro level looking at how digital transformation is impacting organisations and more importantly the service business,” explains Igou.

Most manufacturers today are going through some form of servitization process moving from a purely transactional business to a more servitized model“Most manufacturers today are going through some form of servitization process moving from a purely transactional business to a more servitized model. That creates both great opportunities but also some sizeable challenges from a spare parts perspective and then to add to those challenges there are a number of other disruptive factors in the market at the moment as well.”

“eCommerce, AI, 3D printing and so on are all necessitating transformation in the spare parts sector, which has tended to be the cash cow within a service businesses because of the purely transactional nature of the business - the customer needs the spare part, he orders it, pays for it, gets it delivered.”

“Whereas on the flip side, when you look at field service it’s actually the opposite - field service directors are looking at how to move from being a cost centre to being a profit centre, and servitization plays a role in facilitating that shift. “

“However, the impact that is being seen in spare parts operations as companies move towards an outcome-based model, is that companies actually, start to cannibalise some of their spare parts revenue - because instead of being purely transactional, spare parts orders and deliveries start being included in SLAs, so actually, you will make less money from the sale of spare parts.”

“Essentially, it is something of a contradictory development because companies have to take away from one side to add value to the other.”

As Igou mentions for the spare parts executive there are additional external challenges to be contended with as well as the internal questions being raised by outcome-based contracts. Not least of these is eCommerce.

“eCommerce is another very significant topic of conversation at the moment, especially regarding competition from China where quality is getting better and better but as Chinese organisations have access to much cheaper raw materials they are able to be far more price competitive compared to European or North American organisations,” Igou explains.

“And that is before we even get to challenges centred around pirated parts - there are even growing fears around how companies like Amazon or Google could enter the sector and take a large share of the market revenue quite easily as they have done in other industries and sectors.”

Indeed, the Spare Parts sector is perhaps facing some of its most testing times ahead, but there remain plenty of opportunities also - many of which lie in tightening up efficiencies in two of the sectors mainstay topics - pricing and logistics.

The main aim with the spare parts sector is tackling how to deliver the right part, at the right time and at the right price“The main aim with the spare parts sector is tackling how to deliver the right part, at the right time and at the right price,” Igou explains.

“Most companies are now trying to move away from the cost plus model (i.e. how much does it cost to produce the part and then adding the profit on top) towards a more value-based approach, or if a company is entering a new market, they may prefer a market-based pricing strategy. Here, of course, eCommerce is again having an impact because prices are becoming more transparent - anyone can go on eBay or the internet and see on your website how much it costs to buy a part from China compared to say Egypt and then compared to the US or Europe.”

“If you have price differences it can be awfully bad for businesses so companies are facing a need to standardise prices across the board.” “In terms of logistics, the big discussion remains centred around whether companies should have a centralised warehouse management solution (where you have one big warehouse holding all of the stock and service all of Europe) or whether they opt for a decentralised strategy, operating multiple smaller warehouses which are closer to their customers, but which cannot stock as much inventory per warehouse.”

“In addition to that, there is a new consideration emerging,” Igou adds.

”We had a great session at this year’s European Spare Parts Forum from Schneider Electric about segmenting logistics depending on customer segments. Schneider found that customers in each of the differing sectors they service have different behaviours and expectations. For example, in one industry it may be that their customers need a very rapid solution and the key issue for that industry may be availability, so their logistics channel needs to be very good and very flexible and agile.”

“Whereas, another customer segment might be more demanding of uptime or more price sensitive etc, so segmenting your service supply chain based on your customer segment and the specific needs of that sector is another consideration that is beginning to enter the conversation.”

Of course, as Igou mentions, as companies move towards outcome-based solutions there is a danger of spare parts revenue being cannibalised as part of the wider service offering.

So where does he see the future of Spare Parts Management - will it ultimately become swallowed up as a subdivision of field service operations perhaps?

“It’s a great question and one I’ve been giving quite a bit of thought to,” replies Igou when I put this to him.

Whilst yes, servitization will mean some cannibalisation of the spare parts revenue, I don’t see that it’s going to destroy the spare parts business“With some of the larger organisations that were involved at our Aftermarket Conference at the end of October last year, we saw that even with companies such as SKF and GE Healthcare, i.e. major multi-national companies who have been working towards outcome-based services for some time now, still only about a third of their customers are on outcome based contracts and these are the organisations that are really at the forefront of this shift.”

“So whilst yes, servitization will mean some cannibalisation of the spare parts revenue, I don’t see that it’s going to destroy the spare parts business. There are always going to be some customers who won’t want these long term contracts and who will be happy to continue on a more transactional type of arrangement.”

“So I think the Spare Parts business will always have that transactional element and it will always be a profit centre. There will however, perhaps be a need for establishing some different internal relationships and some different processes may need to be considered moving forwards.”

The inaugural UK Spare Parts Summit will run on the 11th of April and will mirror the highly interactive peer-to-peer format of Copperberg’s UK focused field service event The Field Service Summit.

For more information on this event visit and last minute for registration opportunities visit: www.sparepartssummit.co.uk

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Field Service News' Big Discussion has a simple premise - we take one key topic, bring together three leading experts on that topic and then put three core questions to them to help us better understand its potential impact on the field service sector...

This issue our topic is the what to expect in 2018 and our experts are Michael Blumberg, Blumberg Advisory, Bill Pollock, Strategies for GrowthSM and Jan Van Veen, moreMomentum

The first question we tackled was What is the biggest challenge facing field service companies in the next 12 months?

Our second big question in the series was What is the biggest opportunity facing field service companies in the next 12 months?

And now onto the final question in this instalment of the Big Discussion...

What one technology do you think will have the biggest impact in the next 12 months?

Bill Pollock: Clearly, Artificial Intelligence (AI) and Machine Learning (ML) will have the biggest impact on field service in the next 12 months. In fact, while some field service companies are still debating whether or not to implement Augmented Reality (AR), the more progressive – and aggressive – services organisations are already embarking on their respective AI and ML implementation programs.

The application of AI for positively impacting key services-related areas such as customer experience and workforce productivity, while also allowing companies to move from a preventive maintenance to a predictive maintenance service model will be stunning! In addition, many organisations are already beginning to realise the benefits of using AI and ML for improving their overall service parts management activities, as well as for supporting data-driven decisions by allowing them to process, understand and share information that they didn’t even know they could cultivate as recently as just a year or two ago.

One caveat, though: services managers will need to closely align with their companies’ CTO and CIO before embarking on an AI/ML program, as their respective knowledge of the technical aspects of these “new” technologies will certainly help throughout both the decision-making and implementation processes.

AI and ML are not a fad – they are here to stay, and now is the time for field service companies to embark on that journey.

Jan Van Veen: I try to think of one technology that will impact on all companies. This depends on the industry and where the field service is on the continuum from reactive maintenance to advanced services. Also, the impact of new technologies will always be over a longer period of time.

I do observe that most field service organisations have little view on the impact of Augmented Intelligence and Deep Learning systems which can process and learn from unstructured information in writing and speech. These systems are now having practical applications in various sectors, including technical services.

We have already seen Doctor Watson of IBM massively beating the smartest people in the game ‘Jeopardy’ (search for it on YouTube). Dr Watson is already providing quite accessible web services to use the functionality and have their first field service solutions.

This technology will not only completely reshape our knowledge systems and the scarce skill sets we need for remote diagnostics, it will also be a crucial vehicle for developing advanced data-driven value propositions.

I hope to see more and more manufacturers engaging with a few trusted clients and the right data-driven partners to explore the opportunities from this technology.

Michael Blumberg: I think blockchain technology will have the biggest impact on the Field Service Industry in the next 12 months. A brief definition of the blockchain is that it is a decentralized and distributed digital ledger used to permanently record transactions across data, text, video, or audio files. It is extremely secure and scalable.

The blockchain includes within it the concept of a “smart contract”, a series of if-then statements related to a transaction.

This makes it the ideal technology for building an IoT platform. The blockchain can be used to record sensor data and then trigger service events (i.e., field service dispatch, parts shipment, corrective actions, etc.) based on smart contracts. These transactions can also be monetized in real-time; like a virtual cash register. Any disputes can be resolved by verifying the blockchain transaction itself.

This is just one of many use cases for block chain technology in the Field Service Industry. Other use cases include asset tracking, spare parts authentication, knowledge content sharing, and SLA management. 2018 will be the year where these use cases are implemented in field service and produce measurable results which eventually lead to large-scale adoption within the field service industry.

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What will the impact of servitization and the move to preventative maintenance that it entails have on parts and inventory management? Erik Kjellstrom, Pre-Sales Manager, Syncron tackled this question at the Aftermarket Conference in Hamburg last October. Kris Oldland followed up with him after the event to find out more more...

As Erik Kjellstrom, Pre-Sales Manager, Syncron, stepped down from the stage having just given a presentation at this year’s Aftermarket Conference, I was looking forward to the opportunity to catch up with him for a number of reasons.

His organisation has been something of an anomaly in our sector of recent years. A pioneering lone voice that often were seemingly single-handedly trying to bring a dedicated solution to what was often the unloved piece of the field service puzzle – parts management.

Whether, it be pricing, inventory management or stock ordering, Syncron have successfully over the last few years been one of few brands to be associated with taking this part of the aftermarket conversation seriously. We’ve seen Syncron a lot at various conferences over the last 24 months and almost each time they’ve been armed with case studies and hard data that revealed just how much (and how easily) their solution has improved their clients P&L both in terms of top line revenue and bottom line profit.

However, this time around there was a twist to their approach. Having recently brought a new in module into their offering that is focused on predictive maintenance and based on IoT, were they shifting their focus - or was this development just a natural evolution that reflected the changing dynamics of the industry?

The central thrust of Kjellstrom’s presentation was that essentially there are a number of interesting trends appearing in the aftermarket industry – covering a lot of the ground that regular readers of Field Service News will be familiar with.

We are seeing futuristic concepts such as Drones, 3D Printing, Augmented Reality and Autonomous Vehicles all of which have all been on the horizon offering the promise of industry revolution for a while but are now really starting to come into the mainstream conversationTo begin with, coming from the technology perspective we are seeing futuristic concepts such as Drones, 3D Printing, Augmented Reality and Autonomous Vehicles all of which have all been on the horizon offering the promise of industry revolution for a while but are now really starting to come into the mainstream conversation. Alongside this with have already seen wide adoption of Mobile, Cloud and increasingly the Internet of Things amongst manufacturers and service providers.

However, the changes we are seeing in our sector are not just driven by technology alone.

Sweeping demographic change within the workforce, accelerated by the ageing workforce crisis being faced by companies across the globe and being exacerbated by the unprecedented differences between the incoming Millennial generation and the outgoing Baby Boomers, is of course another factor driving industry evolution forwards.

Finally, add into this mix our shift to a much more service and outcome orientated society as a whole - arguably itself the result of the generational shift alongside the technical advances referenced above and we are seeing companies turn their entire business models on their head.

Servitization has gone from fringe concept to buzzword across the last eighteen months or so as talk of ever decreasing SLAs and increasing First-Time-Fix rates has morphed into discussions around guarantees of uptime and the financial impact of unplanned downtime.

As such our industry is in a fascinating and exciting state of flux at the moment and it was this rapid development and the various drivers behind it that were at the heart of the Kjellstrom presentation in Hamburg.

Of course, such dynamic changes within the sector need to be reflected within the solutions provided and it is the shift towards preventative maintenance (itself a major stepping stone on the way to servitization) that Syncron have focused their latest efforts on.

“We have been working very much to support more reactive service models in the past in terms of inventory management and pricing but what we are now doing, both from a product stand point but also from a service offering standpoint, is we are working towards an uptime supporting module.” Kjellstrom explained when we caught up.

In brief, Syncron are integrating a new module into their current service network optimisation capabilities.

These capabilities in the past had all been centred on the parts management area of the Aftermarket sector – pricing, inventory management, and ordering. However, their new module is a predictive maintenance module they call Uptime (makes sense), which Kjellstrom explains is intended to ‘blend together the aspect of inventory management and pricing etc with an understanding of the actual assets that use these parts.

It seems a natural alignment to bring the asset and the parts management together in the preventative management worldIt seems a natural alignment to bring the asset and the parts management together in the preventative management world. Indeed, much of reasoning behind this development from Syncron echoes a similar line of conversation that ServiceMax put forward when they announced their integration with GE Digital’s technology Asset Performance Management (APM).

Essentially both Syncron and ServiceMax are approaching the same central maxim - just from two different angles. In a world of IoT and sensor-led preventative maintenance the asset is King and everything else should fall in line around and work back from that one premise.

However, where one does feel that viewpoints will change between the two organisations is in how the ecosystem is built. Through their recent acquisition list including Servicemax, it is clear that GE Digital have their eyes set on building a comprehensive and all encompassing new platform for age of the Industrial Internet.

For Syncron however, the focus for the time being at least, appears to be in line with their best-of-breed heritage.

“I think that a product such as ours and a Field Service Management (FSM) system are complimentary products.” Kjellstrom explains.

“We have many instances where we will see a FSM system or a maintenance system that runs in compliment to the more Aftermarket focussed, parts oriented solutions such as ours. Perhaps what makes Syncron a little bit unique is the way we work and how we blend together the aspects of network optimisation and parts optimisation which is often natively something that belongs in a FSM tool.”

With so many technologies evolving at once a clear case could be made for establishing a comprehensive technology ecosystem across a service orientated business and Syncron is set to be an important part of that ecosystem.

Yet, in a world that seems to be in constant Beta, not all developments are equal and Kjellstrom believes it is important to understand how different technologies can impact the way we work when building out your own tech strategy.

Certain technologies will bring refinement whilst others offer revolution.

“We definitely see more potential impact from some types of the technologies than others,” he comments.

“What we are really interested in are the questions like will 3D printing totally replace a need for service part inventory management – and the answer is no it will not, it may enhance it but it will not replace it.”

Does the development of autonomous vehicles mean that we will begin to see car sharing across a team of engineers“How about autonomous vehicles? Does the development of autonomous vehicles mean that we will begin to see car sharing across a team of engineers” he asks rhetorically before outlining that such technology could lead to servitizing the fleet at which point automotive manufacturers concerns about spare parts really begin to truly change and evolve into an entirely new set of thinking and processes.

“These are the types of questions that we are interested in, in terms of the emerging technology.” He explains.

“What we are seeing is that some of these new technologies are really pushing towards a more uptime related world, whereas some technologies are more likely to become tools for us to simply improve existing processes.”

However, whilst he believes the shift to Servitization and outcome based solutions will continue to grow, Kjellstrom also insists that the traditional break-fix market and the aspects of pricing, parts management and inventory which that function drives forward, will never fully disappear.

“I am sure that the shift in focuses to uptime guarantees are growing rapidly and eventually break-fix is going to become less significant but there is always going to be the type of customers where uptime critical assets are not relevant.”

Indeed, whilst we wait for the weighting between the old and the new to do a 180 flip, one thing is clear, for the short-term at least we need to be able to accommodate both – which means looking to the future today – something Kjellstrom and his colleagues have embraced which is clearly evident by their introduction of the new Uptime module.

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