Making the leap from equipment seller to service provider

07 March 2019

What do your manufacturing customers really want? It’s certainly nice for them to have the most nimble robots or the fastest machines, but such assets are only a means to an end. What all organizations really want is a guarantee that they can keep their operations working at optimum efficiency to support their key business objectives.

That’s where servitization comes in. For a typical OEM, servitization means that you’re not just selling equipment. You’re promising to supply the capabilities that underpin your customer’s business and guaranteeing that you will keep delivering on that promise.

iStock-489735770The specifics of what that means in practice will vary between different organizations. It may be about delivering enough robotic welds per hour to keep cars rolling off the production line 24/7, for example. Or it may mean running a flexible bottling operation that can keep the shelves of retailers topped up with drinks on the hottest summer weekend. Whatever the case, each customer wants suppliers who can provide the necessary support to keep equipment running without interrupting their ability to do business.

The appeal for would-be service providers is clear. According to a report produced on behalf of the European Commission in 2016*, the market across Europe for maintenance, repair and operations is estimated to grow to €33 billion by 2025, with margins on services on average 10.7 per cent higher than on products. Better still, the report confirms that happy customers stick around, with top performers in field services experiencing 88 per cent customer retention compared to 76 per cent experienced by low performers.

So what do you need to do to make the leap from equipment seller to service provider?

Where a supplier might previously have committed to a same-day breakdown response or scheduled twice-yearly site visits for routine maintenance, servitization instead calls for a much more intimate relationship with customers. That’s because the traditional set up only provides snapshots of what’s happening on a customer’s site: Each phone call or site visit gives you a glimpse of what’s going on but the rest of the time you’re in the dark.

What you need instead are real time, ongoing insights into how equipment is performing and meaningful intelligence about what that means in terms of maintenance. In other words, you need effective condition monitoring to unlock the benefits of predictive maintenance.

Ideally, condition monitoring should enable you to monitor assets remotely and predict when maintenance is needed. It provides an alert in time for you to act and avert any problem before it can impact on the end user.

For your customers, this means that you only appear on site when needed. More importantly, it protects the performance of critical assets and minimizes downtime. For you, it means that you don’t waste resources (maintenance effort and spares) on maintaining assets that could continue to run without a hitch for the next three months. Ultimately, of course, everyone benefits by not being left to deal with unplanned shutdowns.

Senseye’s unique algorithms automate the process of turning plant data into an accurate prediction of the Remaining Useful Life (RUL) of manufacturing assets – a technique known as prognostics. Senseye implementations are a great example of what effective predictive maintenance can offer.  They typically slash unplanned machine downtime by 50%, increase maintenance staff productivity by 55% and boost the accuracy of forecasting downtime by 85%. What’s more, these scalable, cloud-based systems break down the old barriers to condition monitoring and bring servitization business models within the reach of many more businesses. 

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 * Servitisation, Service and predictive maintenance contracts, Business Innovation Observatory, Contract No 190/PP/ENT/CIP/12/C/N03C01

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