How can service remain manageable with tech?How can service remain manageable with tech?

Monday 1 March 2021

In 1997 a manufacturer of heating systems supplied customer-specific solutions for each customer. That was the distinctive character of this supplier and he was praised for it by his customers. 24 years later, this supplier has grown into a company with a turnover of almost eighty million euros. The philosophy of the entrepreneur and therefore also the culture of the company is: "the customer comes first and we make everything the customer asks."

There is of course nothing wrong with that. But the customer's wishes are still translated into the constant redesign of the hardware, because this supplier is used to that. The manufacturer should therefore start behaving like a tech company.

How do you become a tech company?

Your manufacturing company a tech company? That sounds unrealistic, almost science fiction. Because if you've been developing machines for thirty years, you might be able to apply more technology, but a tech company like Google seems unlikely. When I made the statement during a customer evening in 2010, "Every company becomes a tech company", the best response was: "Arno, that's nonsense!"

Now I dare to say: if you still think that is nonsense, you are the biggest threat to your own business! Why am I so positive about that and why should you care about it?

Expensive design, expensive production and maintenance

Besides the fact that designing new heating systems over and over again takes a lot of expensive, highly skilled labor and subsequently has high production costs, it poses another problem. Servicing these heating systems has become particularly complex, because no customer has the same configuration. In addition, the construction drawings are never properly archived, because they have little value if you make a new design for each customer. Now the shore turns the ship; technological developments create expectations among the customer that the supplier cannot fulfill with its hardware focus.

In concrete terms: customers want a Service Level Agreement, among other things, but the supplier has no idea how to organize this with the enormous diversity of installations at customers. The strength of the company, the distinctive character of the hardware, hits the service department like a boomerang. For every service request, a technician must first check the installation on site and then determine who has the knowledge to be able to service it. The service department has thus become the drain of the legacy that the company has built up over the past 24 years. All complaints, costs and headache files come together there. An almost impossible task to create a sustainable revenue model from that position of services. Whether you are in the manufacturing industry, machine building, the agricultural sector or construction. Or not?

Modularization

Should the heating system entrepreneur abandon what was his strength until now: "the customer comes first and we make everything the customer asks"?

Mass customization has taken place in the automotive field over the past ten years. That means there is still mass production, but almost no car is the same. So customer-specific mass production! That sounds contradictory, but it doesn't have to be, if you think in modules.

Car manufacturers have started to develop more and more customer-specific models. In addition to the traditional sedan and hatchback, new flavors such as the sportback, MPV, SUV and GT were added, but the components have not always been redesigned for every design. The parts have been increasingly modulated, which means that the engineering process has carefully considered how a part can be used in different configurations of the end product. BMW, for example, applies an eight-speed automatic transmission in a wide range of models. As a result, BMW cannot write off the investment in the development on one model, but sometimes on ten models. This makes engineering cheaper and the customer still receives a specific end product in accordance with his needs.

What steps can the entrepreneur take with this knowledge about mass customization in the automotive?

1. Analyze existing installations,
2. Archive all historical construction drawings,
3. Analyze historical complaints, repair and replacement work per part,
4. Determine points for improvement and priorities based on data analysis,
5. Introduce modular designs and identify different configurations,
6. Design modules that can be used multiple in different configurations,
7. Provide those modules with sensors and remote data access, so that the services department can do its work.

If you apply this, you create the basic conditions and the space to give technology a meaningful role in your product and production. This does run the risk of ever becoming a tech company. Do you dare to take that risk?

Would you like to know more about modularization of your production and product? Then sign up for a no-obligation one-on-one sparring session

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