The SMAC Stack: How next generation technology is helping OEM’s transform their Aftermarket Services
by Derek Schroeder
For the better part of the last decade, Manufacturers have operated in a highly challenging economic environment. Since the global downturn of 2008-2009 there has been an ever increasing pressure on costs and a need for manufacturers to disrupt the traditional operational model and reinvent themselves towards better growth and profitability. Given the outlook in the industry, original equipment manufacturers (OEMs) worldwide have increasingly shifted their business from simply selling products and spare parts to providing complete aftermarket services and value added support to improve their profit margins through services.
Aftermarket services help counter both the cyclical demand for equipment and the volatility resulting from a tough macroeconomic environment. Hence winning market share in this area is essential to maximize company profitability. This puts significant pressure on service organizations to keep customers happy and ensure they get maximum value from the products they buy. But the question is, how well prepared are OEMs to reap this opportunity in the services space? Equipment manufacturers face significant ongoing challenges to reap the benefits of strong aftermarket services:
Moving away from a product-centric identity
For decades successful manufacturers have relied upon product focused strategies which has been traditionally responsible for their strong market positions. They have invested heavily in entrenched cultures and processes that revolves around products to help maintain their strong competitive advantage. This results in an internal competition for resources between products and services when the organization is moving towards a new strategy. It is critical to overcome these cultural and identity issues.
Reactive mindset towards services
The traditional cultural problems transcend into the service organization as well. Field Service personnel tend to be highly resistant to change resulting in additional challenges to implement proactive service models and technology platforms geared towards enhancing the customer experience.
Legacy Technology Stacks
Traditionally, companies have relied on ERP MRO functionality to manage service processes. However, this results in additional challenges to change as significant customization of such systems would have been employed to meet specific needs for service organizations.
Cultural change towards a service oriented mindset is a long-term goal and adoption of next generation technology could act as a catalyst to achieve these goals. It also helps mitigate capability gaps and introduce high levels of performance. Today, the most important differentiator for OEMs looking to succeed with their aftermarket service offerings is providing best-in-class interaction with customers. This requires instant access to relevant information – anywhere and anytime and new best-in-breed technology to support such experiences. Use of such technology should essentially meet the following goals:
- Improve equipment uptime and performance
- Increase productivity of maintenance personnel and service organizations
- Provide real-time information regarding service operations
- Decrease manual process errors
Today, Manufacturers are adopting the SMAC (Social, Mobile, Analytics and Cloud) stack to meet their needs. These technologies can help by providing instant access to equipment data, work orders and materials for maintenance personnel. This also helps eliminate manual processes and errors. By adopting such SMAC technology OEMs can gain real-time insights into customer information and equipment status, enabling them to respond faster and improve service levels. Adopting new visualization technologies in mobile can help OEMs support workers with real-time, contextual data that leverages the latest advances in 3D visualization. However it is important to note that for such technology to succeed, a complete process integration of planning, execution and fulfillment of part and service orders is essential.
The other aspects brought in by such next generation technologies is predictive analysis. For manufacturers to consistently achieve high levels of quality and efficiency they need to maintain maximum uptime of their equipment. Forward thinking organizations are utilizing predictive analysis software to convert massive amounts of data gathered from both their products, sensors as well as internal systems such as ERP, CRM and other business applications into actionable information. This can help manufacturers foresee equipment failures that can lead to unplanned losses. Such maintenance strategies results in considerable value addition to customers.
It is no surprise that such next generation technology is gaining prominence for companies serious about their aftermarket service strategy. The demands of the industry is resulting in manufacturers adopting innovative technology to bring in positive disruptive changes. Manufacturers are leveraging new technologies to identify value propositions for their customers, address specific customer needs and enhance customer experience. These next generation technologies are helping manufacturers remain agile and competitive in today’s volatile marketplace.
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