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 conversation
To 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 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.”
“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.