How Top Manufacturers Integrate Service

This blog series addresses why service is a growth engine for manufacturers, and the steps that need to be taken to transform the way products are created and serviced.

My first post looked at how manufacturers can use service, and my second post discussed the importance of a service strategy to the broader organization.

In this third and final part to the series I’ll take a look at a couple of examples that show the importance of Service Lifecycle Management (SLM) and what manufacturing organizations are doing to implement it.

Instead of operating service as a cost center or outsourcing it to third parties, manufacturers need to establish an ongoing relationship with their customers, improve the lifetime experience and build loyalty while simultaneously cultivating a healthy, recurring revenue stream.

For example, GE Aviation customers pay by the hour for use of its engines and GE is responsible for maintaining and making certain they are fully functional. Another example can be found in the medical device manufacturing industry, where customers pay for MRI machines and other equipment according to their usage.

Consider Ingersoll Rand’s impressive track record: 2011 revenues of $14 billion, with 72 percent of that coming from new equipment and 28 percent in aftermarket services.

Aerospace giant EADS is marching down a similar path, aiming to become a mission-critical service provider with a 25 percent service share by 2020, which more than doubles its current stake of 10 percent service revenue.

These companies’ success stories highlight the importance of SLM, a system of people, processes, and technology that ensures customers achieve maximum value over the entire serviceable life of a product.

One of the hallmarks of successful SLM is dynamic service intelligence—taking a holistic view of service and coupling it to product performance. Specifically, by syncing product data like parts lists, CAD models, and maintenance and repair procedure documentation with critical service information like spare parts inventory, warranty data, and field technician work orders, enterprises achieve visibility across the entire service lifecycle and ensure critical information is delivered directly at the point of need. Moreover, a single view of service lets service executives keep the pulse of the entire service network status.

Consider a real-world example of a field-service operation.

Most companies deploy a standalone tool or spreadsheets to manage field operations, which means they do so primarily in a reactive manner. Their ability to deliver quality service becomes vulnerable to a host of issues, including technician resourcefulness, knowledge availability, even the lack of spare parts.

With an enterprise solution based on service intelligence, most of those issues are put to rest. Technicians have everything they need to get the job done, from 3D animated service tutorials to rich service history to real-time parts inventory updates.

Whirlpool is actively embracing this aspect of SLM. By doing so, Whirlpool management says it’s broken down long-standing barriers between service and engineering as it relates to describing products, resulting in higher quality of service along with better-trained and prepared technicians.

Closing the loop between product and service has benefits to product innovation too.

Capturing data about how products perform in the field and feeding this service intelligence back to engineering helps a company take corrective action, whether that means modifying existing products, replacing an ill-suited supplier, or factoring that data into the design of future products.

Today, all signs point to service as the future source of competitive advantage, bringing manufacturers closer to customers and allowing them to capitalize on a sustainable edge.

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One thought on “How Top Manufacturers Integrate Service”

  1. Also, more and more companies focus on Total Cost of Ownership (TCO) when considering purchasing expensive machinery or entire systems. TCO is well consolidated in IT departments and with IT vendors, less so when dealing with industrial automation systems.

    Not surprisingly, many IT people transition to Operations to bring their experience with Service Management and TCO to fruit . And when you design new products with a view to optimize TCO, to reduce full lifecycle cost (cradle to cradle) , you are gaining some serious competitive advantage. Or you may do so, if you are first 😉

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