Smart connected assets have created an opportunity to push the envelope in an emerging market of smart services. Granted, outsourcing equipment maintenance back to the OEMs has been around for some time (think Rolls-Royce and pay-per-mile aircraft engines); however, the Industrial Internet of Things (IIoT) creates an opportunity for more advanced service offerings to maintain assets before they fail.
If done correctly, this has the potential to increase product quality and brand loyalty to new levels. Industry thought leaders are gaining competitive advantage by assembling the necessary components to develop best-in-class smart services. Great examples include Joy Global and Kone, both of which have the foresight in their industries to provide predictability and reliability in the equipment they are selling.
As this trend continues, manufacturers that want to offer smart services should consider three areas to ensure a strong foundation.
Pick a flexible IIoT platform
Manufacturers offering smart services will need a way to handle the connectivity, a way to manage and analyze the data, and the ability to create new or mash-up applications to cater to the clients’ requirements.
One area where LNS Research sees increasing importance and investment is network connectivity. For smart services to work effectively, guaranteed network uptime will need to be a component of any agreement for monitoring the assets. We are starting to see manufacturers invest in double or triple redundancy using multiple providers for connectivity rather than workarounds for when the network is down. Remember, the tools you will deliver to manage the assets as they are dispersed will not only be used by a remote operations team, but your customer will want to monitor the assets as well. A well-thought-out IIoT platform can provide this capability.
Service-level agreements need to improve
Most service-level agreements (SLAs) today are triggered when an asset has already broken down. They are built around the time it takes to get out to the asset and get it up and running in a designated timeframe, typically based on how critical the asset is to the business.
When offering smart services, this notion is flipped around entirely. Applying a predictive analytics approach within a smart service SLA means you might be showing up before the asset has failed. Depending on the communication between your client and the remote monitoring team, they might even be surprised when you show up because “everything is fine.”
It will be important to show a level of performance when organizations are not seeing the products breaking down as clearly as they had before advanced predictive monitoring. It will also be critical to coordinate additional work while your team is there for a critical issue to ensure the smart service program is cost-effective long term.
Communicate performance with agreed-upon metrics
At LNS Research, we compiled research to understand what clients view as the most important metrics for the asset performance management (APM) programs. When implementing smart services, manufacturers should be aligning to their clients’ metrics as much as possible. The top metrics, according to our survey, are led by reliability/availability, mean time between failure (MTBF), and planned vs. unplanned work (see full results in the graph above).
Having a baseline understanding of how clients view and monitor their APM success and failure will help when creating the next-generation SLAs. Knowing this upfront will ensure a clearer way to communicate the performance of the remote monitoring of assets and the performance of the team supporting the assets in the field.
Start now and evolve
Initial success will depend on having a well-thought-out approach for the people, process and technology needed to manage the lifecycle of the asset after it leaves the manufacturing facility. Most organizations have experience supporting assets for their customers with warranty programs, and outsourced maintenance can use this knowledge base when moving to smart services.
To remain competitive, manufacturers will be required to provide some level of smart services for their clients. They will need to be flexible and willing to evolve with the predictive insight that will be gained from this new approach.
For more information on how industry is leveraging IIoT to create smart connected business models, be sure to check out the free webinar, “Metrics That Really Matter: Digging Through the Data in an IIoT World,” presented by LNS Research and MESA International.
>>Jason Kasper, firstname.lastname@example.org, joined LNS Research in September 2015 as a research analyst with a primary focus on R&D in sustainability, energy management, asset management, and Internet of Things (IoT)/machine-to-machine (M2M). He has more than 15 years of experience working with customers to develop enterprise software solutions for industries such as oil and gas, mining and metals, utilities, and transportation. He has a B.S. in management from California State University, Chico and an M.B.A. from the D’Amore-McKim School of Business at Northeastern University.