Thanks to the BT last mile team for hosting the Service Community at their Birmingham Snowhill Offices. With an impressive view over Birmingham, this Community meeting did not disappoint.
First up was Simon Lawrence, Service Director at Welbilt who led a discussion on the “The Challenge of Last-Mile Logistics”. Welbilt are a $3.5bn company that manufactures industrial cooking equipment. The Merry Chef Brand service operation that Simon runs, already achieves an impressive first time fix rate of 95%. Key has been a well stocked service van. If customers are not able to cook food, they are not earning money, so the performance pressures of SLA’s are significant. In this situation part availability is critical, however spare parts were managed by the factory. And as we all know a factory supply chain is very different from that of Service and struggles to deliver. The solution they chose was to outsource Service Parts logistics to a 3rd Party Logistics provider. However this brought an unexpected challenge of Service engineers having extended waiting times of upto 3 hrs, as they waited for a pick up slot from the provider. The team concluded that they needed a ‘locker” type solution of the type offered by BT Final Mile. Wait time plummeted to zero, and rather than driving up to 35 miles to the 3rd party location, the greater density of lockers reduced this to 7 miles. Simon’s observations on his lessons learned were particularly interesting
- An innovation such as this led his team opening their mind set to other solutions
- That Data integration is the key to success. For example integrating the locker system with their own ERP that controls the flow of spare parts
- The importance of starting with the customer and working back to the process and data.
Steve Gregson, Global Chief of Transformation for Engineering for Services at Rolls Royce then shared some of the insights he has learned on driving service innovation. His first question was are their similarities in the service challenge between and jet engine and a fast cooker? As he developed his story, I think we could see significant similarities, but obviously in very different contexts. One key observation was that in the delivery of advanced complex services, alignment between Engineering, Finance, Sales and Operation is fundamental as contracts do get complex. That increasingly environmental factors and circular economy concepts must be integrated into service propositions. That the organisation must be “Digitally Saavy” to understand the “value levers” and then work back to operations (a common theme!). If advanced services are to become part of the DNA of the organisation then Enterprise Architecture is an important capability. And we are not just talking about IT, but the whole organisational structure and how the business processes fit together. His final message was that it’s all about value and planes must fly!
In the second part of his conversation, Steve put another hat on, which is that of the Co-Chair of the Through Life Engineering Service Council. The TES council is a lobby group aiming to promote Service based business models within UK industry and the UK Government. Steve wanted to know from this group of Industrial OEMs and Solution providers “What are the key support requirements they need from the UK Government in order to drive growth”. The debrief from the 2 groups were around the following points:
- Shortage of Technical Skills: incentive for companies to develop vocational skills
- Mindset & Cultural Shift
- Education & Schools
- Vocational Skills Sets: Engineering, technology, Arts & Design. Encourage STEM subjects from an early age
- Knowledgeable career advice that sells the benefit & value of engineering and service
- Rebalance the tendering process for Govt contracts to take into account Total Life Cost and Customer Value including environmental factors – i.e. value of the service offer is as important as the product offer
- Knowledge and Visibility of the role of services in delivering UK environmental commitments
- Innovate UK funding structure too academic and not practical enough
- Education & Schools
Martin Prior from Fuji Film discussed some of the key lessons he has learned from outsourcing a Field Service organisation. First of all he talked about the importance of “Keeping your Eye on the Prize”. It is a major risk to outsource to a partner and so it is vital to know your partner, keep tabs on their performance at their other customers & taking a real interest in their business. If you don’t, then you may miss the signs that your strategic partner is in financial stress. This is what happened to Fuji Film UK, which led to Martin developing these lessons learned:
- Don’t put all the eggs in one basket
- Study their whole operation
- Embed people into their company
- Be humble: Use their data to help your company
- Keep your staff informed
And finally Chris Raddats from Liverpool University shared the highlights from research on Digital Service Propositions that had involved some members of the Service Community. In short the key Digital propositions currently in vogue within Industrial Service Businesses are:
- Remote maintenance – Fault diagnostics and equipment repair can be undertaken with less need for a service engineer to visit a site
- Logistics management – Using digital technologies to improve the efficiency of managing and transporting products and spare parts
- Customer app/web portal – Providing customers with real-time visibility of their products’ performance and other matters, e.g., stock levels
- Process improvement – Deploying solutions to enhance customers’ operational processes, rather than just the supplied products
- Remote monitoring – Telematics capturing information on the performance of customers’ equipment
- Performance advisory – Operational enhancements to customers’ businesses
- Predictive maintenance – Using algorithms to anticipate and respond to customers’ equipment failures
- AI applications – Cloud-based applications, e.g., to intelligently manage print workflow for companies with complicated or specialized requirements
- 3D printing – Spare parts at short notice that might break and prevent the customer from printing
So another interesting event, with a wide range of discussion and takeaways. You can download the presentations from our Slide Deck section here or write to firstname.lastname@example.org if you want more information.