Servicemax ebook operational excellence

MAKE OPERATIONAL EXCELLENCE A REALITY

PROCESS

METRICS

TECHNOLOGY

DEFINING OPERATIONAL EXCELLENCE Bain & Company recently said that service is “a key weapon in the intensifying battle for technical differentiation and commercial value proposition, which every industrial company is fighting.” Service is clearly the new battleground.

The key to taking advantage of this “key weapon” is operational excellence: executing on your promise to your customers and doing it in an efficient and profitable way. Bain has found that companies that operate the best service organizations see a 46 percent margin on their services. That’s almost 20 percent higher than what most industrial companies see on the sale of new equipment.

Operational efficiency is critical, and it comes down to three key elements of your business that need to work together: real-time metrics, process and technology. In this guide, you will learn how each of these (with the right resources, people and training) contributes to operational excellence, and how they work together to create a service system that is far greater than just the sum of its parts.

PROCESS Why you need it?

Process is what drives consistent and effective service. But, with numerous technicians scattered around a region or even around the globe, it can be hard for service leaders to not only know how everyone is performing, but also ensure they are all following the same processes. Trust that technicians are good at their jobs and will generally do the right thing, but you also want to know that no matter who goes to visit a customer, the level of service will be exceptional.

How does it relate to technology?

For years, technology companies have talked about the convergence of people, process, and technology.

With the cloud and mobile, that promise has finally taken shape. Technology can now incorporate

the processes that your technicians should follow, and virtually guides them through the operational elements of a service visit. For many companies, this has become a competitive advantage because it’s not something that has been adopted industry-wide yet.

How to do it?

If you are looking to enhance the technology you use in your service organization, ensure that your next-generation technology incorporates this process element. Working with remote employees makes process training very difficult, especially if you ever want to change a process. Your technicians will also appreciate the structure and clarity of their tasks.

Operational Excellence – It means consistently meeting or exceeding customer expectations (over time and across the organization) in a manner that (1) is perceived as valuable by the customer, (2) is profitable for the service provider, and (3) contributes to the customer relationship. — Jim Baston, President, BBA Consulting Group

TECHNOLOGY Why you need it?

Of the three pillars of operational excellence, technology is the one that enables the other two.

Technology provides options for what you can do, how flexible you can be, and how fast you can do it. While technology is a somewhat vague term, in this case, it’s the combination of a modern service system (software) with mobile devices (hardware). For companies that with smart connected products, the Internet of Things can also play a massive role.

How does it relate to metrics?

Your technology platform and your employees’ use of it are what power metrics. The inputs from all of your connected products, your technicians, and your back office service teams turn into aggregated metrics that you can use to have a real-time understanding of your business and make better decisions. Are you eliminating as much downtime as possible? Are you renewing service contracts at a sufficiently high rate? Are you rolling trucks multiple times for the

same problems? The answers to these questions are all based on the data that is contained within your service system. That information can also come from your connected products. Technology is the operating system for your technicians. They can both get the information they need from it, and input information about what they’re doing.

How to do it?

To ensure technicians are actively inputting accurate information, companies need to equip them with mobile devices and intuitive apps for them to use while in the field instead of on their laptops at the end of the day. With connected products, companies need to turn to a technology vendor that can take the massive amounts of data and turn it into actionable insights within the same technology platform. The implementation and adoption of technology are two very challenging tasks for service organizations, but the payoff of success is huge: visibility, efficiency, revenue, and more.

Being truly mobile is no longer an option. Customer expectations have shifted to expect instant resolutions, so you cannot leave your field workforce ill-equipped with outdated options. — Cindy Elliott, Industrial Fellow & Servitization and Technology Strategist, Aston University

REAL-TIME METRICS Why you need them?

Visibility into your service organization is the most essential part of improving how you operate. The challenge is ensuring your can access the right data at the right time to make the best business decisions.

The faster you can recognize what’s working and what’s not, the sooner you will see the benefits like retention, revenue and profitability. That’s why “realtime” is essential for service organizations today.

How does it relate to process?

With real-time intelligence about your business, you can make changes to your operations and processes to improve the metrics that aren’t meeting your goals. Perhaps your European service team is at a 90 percent first-time fix rate for the same product that the U.S. is only achieving a 70 percent rate.

With accurate metrics, you can dig in and see what’s happening. Maybe the answer lies in some part of

the service process that Europe is getting right that the U.S. can mimic. The numbers tell a story and can uncover answers. It’s your job to put it into practice – and the faster, the better.

How to get started?

First, you need to put the right technology in place (see the technology section above.) Yes, that’s a challenge, but less challenging today with cloud and mobile technology than in the past. Now you need to make analyzing reports and dashboards part of your everyday tasks. Your most important real-time reports should be like your email — one of the first things you look at every day and then several times throughout the day. Bigger trend reports should be more infrequent: generally reviewed monthly, quarterly and yearly with your management team.

I’ve got over 380,000 product warranties that I’m keeping track of today.

In fact, I can tell you that right now, I have 1,300 warranties that are going to expire this month. I never had that level of visibility before – and now I can actually do something about it. — Gary Yantsos, Senior Director of Information Systems, Topcon

“Efficiency is the central point of value creation rather than the asset itself. “

OPERATIONAL EXCELLENCE IN MOTION: THE GE STORY

GE Eyes Profits and Customer Success Through Data-Driven Operational Excellence The company putting forward perhaps the most admired vision for what a business can accomplish by tapping new technologies, processes and mountains of previously unknowable customer and machine data is not a startup. It’s GE, the 124-year-old industrial stalwart that got its start making light bulbs and is now a digital powerhouse.

Today, the company’s focus is on developing software that makes large industrial machines, such as wind turbines and oil & gas drilling equipment, intelligent.

As GE brings those machines online with Predix, an operating system for the Internet of Things (IoT), the company is reanimating them to capture and transmit gobs of performance and usage data, twenty four hours a day. It’s on the rails and runways where the potent — and profitable — mix of data and technology is on display every day. But it’s only the beginning.

That data, increasingly invaluable to the company and its customers, is central to GE’s digital reinvention. The company is placing big bets on the ability of these intelligent machines, and the data they generate, to transform its business and open lucrative, service-oriented revenue streams. “We’re getting to the point of selling thrust, not engines.

Or we’re selling locomotion, not locomotives,” GE Digital COO Brad Surak tells Fast Company. The smart machines might do the work, but the datafueled services increasingly deliver the paycheck.

People are now valuing companies not on who brings them assets, but who can bring the best outcome on that asset, said GE Digital CEO Bill Ruh at a recent industry conference. “Efficiency is the central point of value creation rather than the asset itself.”

90

%

BY 2018

PERCENTAGE OF GE’S PROFITS THAT WILL BE GENERATED BY INDUSTRIAL OPERATIONS

Providing this type of service to customers relies on GE achieving a goal of “zero-downtime” on their equipment. That’s where a focus on operational excellence comes into play.

to optimize the service options for each customer.

Who better than the field service engineer, who understands the equipment and the customers, to become that trusted adviser?”

Intelligent machines transmit data in realtime to GE, alerting the company when it’s time for service or repair before the machine goes down.

But success hinges on GE’s ability to process staggering amounts of data, brought to life by new technology, and shape it into a coherent whole that GE — and its customers — can put to use to optimize their service operation.

The data, in fact, kicks off preventative maintenance processes that help avert problems and keep the machines running optimally.

The first step is to connect machines and turn on the data spigot. “The next phase,” Bobby George, CIO of field services for GE, told Field Service Digital, “is

GE’s willingness to disrupt itself is paying off so far.

Industrial operations will generate 90 percent of GE’s profits by 2018, according to Bloomberg. That’s quite the transformation for a company founded more than a century ago by Thomas Edison to make electric lighting.

PERSPECTIVES ON EXCELLENCE

What’s Your Best Advice for How Organizations Can Improve Their Operations and, as a Result, Their Service?

It requires complete alignment between service and finance leadership and employees. From development of goals to execution in the field, employees must understand their role, and the role of others, in the process to execute the strategy and cope with the roadblocks that impede progress. — Mike Vaughan, Liftech My operational excellence statement to my team is: “Provide the highest quality service to our customer, in the most efficient manner.” The first part of the statement empowers my FSE’s to take whatever actions necessary to achieve customer satisfaction. For the FSE, operational excellence is resolving the customer’s immediate issue in a timely manner, and taking steps to resolve any company-related issue the customer may have. “In the most efficient manner” is where leadership is accountable to create margin and revenue without compromising the quality of service.

— Steve Nava, Luminex

I hate to be a broken record, but I’d say look to mobility. Today’s field service techs are all armed with mobile devices, but how many are really getting the most value out of them? Be sure your techs are trained to use all mobile tools and apps. Incentivize techs to capture more information using those mobile devices while onsite.

The more details they include in case notes, the deeper your understanding will be of the account, the customer journal, and all relevant problem/resolution information that can be searched later by other techs.

— John Ragsdale, TSIA Ultimately, service will be judged by the customers. The customer perspective should be the overarching target for developing and refining the service operation. Such a mindset helps separate the real opportunities from the distractions, especially when it comes IoT technologies. — Andreas Schroeder, Aston University

GETTING STARTED Knowing how to improve your service operation starts with understanding where you stand compared to the rest of the industry and your competition. The Field Service Maturity Assessment Tool is a great place to start. This free tool will guide you through 20 different field service dimensions, so you can see how your organization stacks up and decide where to focus your efforts.

Access the free assessment tool here at: mm.servicemax.com

CONCLUSION Operational excellence isn’t merely a tactic for growth or higher profits — it’s a survival strategy. As product commoditization continues, service is emerging as a critical battleground for manufacturers, industrial organizations and traditional service providers alike. The equipment your technicians service is getting more connected and “smarter” — but so too are your customers. In order to meet — and even exceed — their demands, organizations need to put the right mix of technology, process and analysis to work — for themselves and for their customers.

The potential reward is massive: Industrial organizations’ service businesses grew 9 percent from 2010 to 2013, according to Bain & Company, a figure it expects will double by 2020. That’s a lot of value for the taking by companies that are willing to uphold their promises to customers.

Are you prepared?

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