Changing the Game in Industrial Goods Through Digital Services

Changing the Game in Industrial Goods Through Digital Services

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Changing the Game in Industrial Goods Through Digital Services

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    Digitizing Existing Services

    Even though many OEMs are convinced of the value to be gained by digitizing existing services, they are moving cautiously. They see digitization as something they’ll have to embrace eventually. But they are concerned about the complexity of the shift and about recouping the investment, since customers might resist paying for digital upgrades.

    There’s some truth in that perspective, but it overlooks the cost side of the equation. Digitizing existing services can eliminate some on-site visits, speed up others, and enable companies to handle the same number of customers with fewer technicians. So digitizing existing services can reduce labor costs substantially. (See Exhibit 1.)


    Instead of having a technician travel to a customer’s site, for example, a service company can have the equipment send vital statistics to its technicians on a set schedule. And if the equipment malfunctions, technicians can run diagnostics remotely. Because software is increasingly being built into equipment, some problems can be fixed immediately simply by adjusting or updating the software—with little or no human involvement.

    When technicians do inspect equipment on-site, they can proceed much faster and the quality of their work is much higher. Sensors send the technicians data, so they arrive knowing the equipment’s status. And when on-site, they can easily call up digitized technical manuals or repair records on mobile devices to diagnose and resolve problems quickly and precisely. The savings can be enormous. In the aerospace industry, radio-frequency-identification sensors have reduced the time needed for carrying out certain inspections to as little as 4% of the original time required. In other industries, we have seen time savings from 5% to 25%.

    Digitization also speeds up the submission of reports, because they can be done right on-site. And 3-D printing enables service offices to quickly print spare parts on demand, rather than store costly inventory or wait for delivery from warehouses. Meanwhile, workflow management software can optimize service calls both to minimize idle time and ensure service consistency.

    A leading elevator manufacturer, for example, installed sensors in its equipment to measure operating speed, vibration, and the physical condition of the cabins and doors. The intent was to detect issues before customers noticed. The sensors send data to mobile apps in the cloud that alert field personnel of failures. Other apps in the cloud bind together real-time data with the repair history of a particular elevator, the appropriate repair manuals, and the spare-parts order system to provide a technician with all necessary information. Once the work is done, these apps let the technician see if any nearby elevators require maintenance work, thus reducing total travel time.

    The elevator company also made the monitoring data available to its customers through an easy-to-use interface. Facility managers can check on their elevator fleet, looking up historical and scheduled repairs or accessing statistics on elevator uptime and availability.

    Likewise, a wind turbine OEM found that digitization cut its technicians’ time by more than half. (See Exhibit 2.) Remote diagnostics allowed the technicians to arrive with spare parts in hand, rather than first diagnose the issue on site, place the order for spare parts, and wait for them to arrive.


    Whether done remotely or in person, digitized service interventions are not only cheaper but also faster and better. That means less unplanned downtime for customers’ expensive equipment and greater safety for technicians. The customers are delighted, and the savings from higher productivity cover the payoff on the digital investment, without raising prices.

    Offering digital services does require some staff training, but the costs here are outweighed by the lesser need for specialized knowledge. In many cases, service providers will be able to send technicians with only general training, rather than specialists, because technology will enable technicians to communicate in a richer way with specialized support or will fill in the gaps. A major car manufacturer, for example, provides augmented-reality glasses so technicians can receive step-by-step instructions and see in 3-D the repairs to be carried out. Being able to use general technicians will also reduce worker downtime, because workers can service a wider range of machines.