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Five tips to unlock revenue in aftermarket field service

May 31, 2017

Unlock revenue at a time when product margins are slimming.

Aftermarket service is becoming a way for manufacturers and distributors to unlock revenue at a time when product margins are slimming. According to a 2017 IDC study, by 2020 manufacturers using product and service-quality measures to enhance customer

IFS’s Christine LaVoi

experiences will capture 20% more aftermarket revenue. Aftermarket services then become a key differentiator in increasing the bottom line. There are five key focus areas within manufacturing for those wanting to optimize operations and drive their aftermarket services.

Increase hours in a day with smart watches

The time technicians spend interacting with an aftermarket-service application needs to be kept to a minimum to give them more time to focus on the jobs in hand. For example, software optimized for a wearable device (such as a smart watch) can keep records of completed work, request spare parts or seek guidance from colleagues, all without the worker downing tools. It can also communicate with a customer with a simple tap to let them know when they are on the way to the job, when they have arrived and when they have finished.

There is a wide range of systems available, with the more advanced ones having GPS that automatically sends notifications as soon as a technician leaves an office or arrives at a customer site. This saves technicians time by not having to manually interact with technology to communicate their location. Businesses can also gain from digital records to show how quickly a technician was on site after a service request was made, along with automated service level agreement (SLA) reporting for instant communication of work orders completed.

Retain past knowledge in digital form

Many of the skilled workers across a number of industrial sectors and asset-intensive industries are nearing retirement age. Organizations are struggling to maintain a full workforce–a 2015 Career Builder survey found 55% of service organizations were struggling to fill open service positions. The problem for businesses is not just finding themselves with a reduced headcount, but they are also unable to retain the knowledge that retiring individuals have accumulated through years of experience in the role.

Adopting innovative technology helps organizations overcome this issue. Field-service-management software is starting to include instructional tools, such as product manuals, videos, blueprints and FAQs, embedded within devices to simplify complex tasks for the next generation of workers. Augmented reality is also finding a practical role within the industry. Engineers are able to use technology from providers such as XM Reality to collaborate with associates hundreds of miles away and ask for guidance on key processes or issues. This method of embedding knowledge via a software application increases first-time fix rates, reduces time-on-site and drops the cost of service-provision while ensuring customer satisfaction and SLA compliance.

Manage the reverse-logistics pathway

Aftermarket service organizations often have to manage the movement of products, parts or subcomponents from customer sites and back into inventory. Once on site, these items may be repaired and sent back to the customer, the supplier or even disposed of. Inefficient management of reverse logistics means organizations can find themselves driving unnecessary cost or harming customer satisfaction.

In order to prevent this, organizations should focus their efforts on four key areas of reverse logistics:

Return for Repair: This handles the shipping of a product, part or subcomponent to a designated repair center so the item can be returned to the original customer once it has been repaired.

Return then Swap: A transaction where the unusable product or part is shipped to a designated repair location, found to be non-repairable and then “swapped” for a new item, which is then returned to the customer.

Advance Exchange: A challenging and complex transaction where a new or refurbished product or part is shipped to the customer to replace an unusable product or part, which the customer returns after reception of the new or refurbished item.

Return Only: When unusable or undesired products or parts are returned without any replacement process.

Predict equipment’s next move

Scheduled maintenance plans are becoming a thing of the past, with IoT furthering the capabilities of an aftermarket organization to enable condition-based or predictive maintenance. For example, a technician can be automatically notified and parts ordered if a sensor on a compressor detects a fault that would potentially damage a valve. How service or maintenance actions are triggered is set to the expected performance criteria or the number of cycles a piece of equipment has completed. As service providers build up their knowledge and data, they are able to become a more valuable organization for their customers.

But IoT doesn’t just monitor the performance of individual assets, it also has the ability to collect data about equipment in the aggregate, creating large amounts of information that can be analyzed and modeled. This group of data enables comparisons to be made between assets of the same type or model and helps identify individual units operating outside the norm.

These benefits are achievable without consuming any administrative staff time or overhead, meaning an aftermarket service team can meet or even exceed customer expectation while capturing revenue with minimal or no additional cost.

Maintain an asset’s full history

Not all aftermarket field-service applications provide the same level of per-asset tracking, which is essential in industries where traceability is required for regulation or other services. There are various situations in which per-asset tracking is a must. A more thorough maintenance history is required for capital assets being serviced–such as a piece of medical equipment due to compliance or audit requirements. This can include the serial tracking of parts and components, the frequency and duration of each service visit and even information on a technician's qualifications.  

The optimal way to achieve this is for aftermarket service to be integrated within the functionality used to manufacture the asset from the start. Not only does this allow for an asset to be fully monitored and traced throughout its lifecycle (which may be a requirement for regulatory or risk-management purposes), but also provides a deeper relationship between an aftermarket service team and the customer.

Christine LaVoi is senior client manager with IFS in North America.