Machine and equipment builders can use remote monitoring, consumables and other scalable services to remain competitive and help customers prosper.
By Sherman Joshua, director of market development, Global Commercial Marketing, Rockwell Automation
If you’re a machine or equipment builder, you’re contending with more global competition, lower-priced components and other market forces, so you must be able to compete on more than just price. You need to create stronger and more valuable relationships with your customers.
You might already be delivering smart machines and equipment to work toward achieving that goal. However, by providing services that leverage the data and connectivity of smart assets to help end users maximize their productivity, you can provide a new level of value while making both the transition from equipment vendor to trusted partner, and from one-time equipment sales to annual, reoccurring services revenue.
Smart-machine services help differentiate your company and your offerings. They also open opportunities to work more closely with your users by helping them understand and solve the issues that might be holding them back.
This new strengthened relationship can benefit both of you. Your customers gain an expert that knows their smart machines or equipment inside and out and can help maximize their productivity, while you gain a closer partnership with your users.
Getting Smarter with Your Machines
When considering smart-machine services to provide your customers, challenge your traditional understanding of what support can be. Support doesn’t need to be solely reactive or on-site maintenance.
Think about how, as a collaborator, you can create and scale services to help your end users be successful in smarter and more proactive ways. Some examples include:
1. Remote Monitoring: This is the service most often discussed in the context of smart machines — and with good reason. It can help your users more quickly spot and address issues, dramatically reducing downtime. According to ARC Advisory Group, a survey of OEMs showed that “30% or more of the repairs can be made via the web by modifying parameters remotely or with minor assistance by an onsite person.”
Gaining access to machines and data remotely can help you discuss additional service options with customers. And you can use the data to improve your own engineering processes and machine productivity.
2. Outcome-Based Services: Smart-machine services can use service-level agreements to give your end users a guarantee around specific outcomes. Some popular service-level agreements include response time of people and parts, equipment throughput and equipment availability. OEMs that have both remote visibility to equipment status and services capabilities to respond reactively and proactively are positioned to provide these guarantees.
3. Consumables as a Service: These services provide parts, materials and maintenance to help your customers achieve specific outcomes. For example, an OEM that provides case packers could deliver raw materials and consumable mechanical components as a monthly service to help an end user meet its production goals.
4. Equipment as a Service: In this model, you don’t sell your machines or equipment, but instead bundle the assets and any desired services — such as remote monitoring and proactive maintenance — for a flat monthly fee. Using the case-packer example, the OEM could lease the case packer and remotely monitor its health for maintenance.
All these services allow you to become a true collaborator with your customers, playing an integral role in their operations to help them improve productivity and meet their business goals.
Develop a Strategy
So how do you implement smart-machine services?
Start by identifying the customer types or industry segments where you see the most potential.
Also, determine if you can apply what you’re already doing with data and connectivity in new ways to help your customers.
For example, one OEM recently realized that the data they were using for their equipment-design purposes also would be valuable to a customer. They now provide cloud dashboards and remote monitoring as a service to end users, directing them to issues that have the highest impact on production and identifying opportunities for optimization.
In addition, develop a clear strategy for monetizing smart machines with services. Implementing remote monitoring, cloud-based technologies and other offerings isn’t a small investment. It can be time-consuming and expensive if you’re facing workforce and other resource shortages. It’s essential to focus your efforts in places that can provide value to your end users.
Understand how you’ll get a return — whether it’s with new or existing customers — within a reasonable time window. This should include identifying what data needs to be captured and determining how it will be captured and delivered to help optimize your customers’ operations. This will help mitigate up-front development costs by only focusing engineering and services efforts on the opportunities that likely will provide the largest return.
As you go through all this, determine if your new services can be managed within your existing business or if you see significant enough opportunities that warrant an entirely new business unit.
Ahead of the Curve
Smart machines and equipment can help realize the promise of digital transformation — both for your customers and for you. Delivering smart machines and equipment with scalable services can help you create new revenue streams, grow your customer relationships, help your customers prosper and help keep you competitive.
The Journal From Rockwell Automation and Our PartnerNetwork™ is published by Putman Media, Inc.