How the IIoT will shake up how your plant buys what it buys

Rent, buy, subscribe? Equipment becomes a vehicle as vendors sell uptime, output.

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Remote connectivity and analytics enabled through the industrial IoT (IIoT) offer equipment dealerships and rental companies an opportunity to grow revenues through new maintenance services. Equipment used in the construction, mining, agriculture, industrial, and transportation industries has grown increasingly complex and often incorporates mechatronics, electronics, IT, and software. This makes it challenging for general-purpose technicians in the maintenance staff to debug and isolate equipment problems.

In response, original equipment manufacturers (OEMs) are offering IIoT-enabled remote monitoring and analy-tics services on a subscription basis that identify an issue before it harms the equipment or cascades into a major incident. An OEM’s dealership or rental company provides this predictive maintenance service to its local end-user customers along with well-trained field service technicians to make repairs. This benefits all parties by providing increased revenues for the equipment dealer or rental company while improving customer satisfaction and retention by helping equipment users avoid costly unplanned equipment downtime.

Unique needs of equipment dealerships

Successful equipment dealerships typically listen carefully to their customers’ business needs to improve customer satisfaction and retention and identify new sources of revenue. As these dealerships add products and services, their business has become increasingly diverse. Now, the IIoT provides two new opportunities for business growth: product-as-a-service (PaaS) and predictive maintenance (PdM) offerings.

Both PaaS and PdM drive significant expansion in dealer-provided maintenance services:

  • PaaS transforms the customer relationship from one that focuses on the initial delivery of equipment into a results-oriented continuous service offering. With PaaS, users are charged based on equipment output. One example would be charging for the volume of compressed air generated rather than charging an up-front fee for the compressor. Because revenue is generated only when the equipment is operating, the distributor or renter has a high incentive to manage and deliver maintenance that ensures high equipment uptime.

  • PdM as part of a service model involves using the IIoT and analytics to monitor equipment’s health, for which the distributor or renter charges a subscription fee. When the analytics trigger an alert, the distributor initiates a repair prior to failure. The distributor assumes penalties if the service-level agreement (SLA) is not achieved. Again, the distributor manages and delivers maintenance to ensure high uptime of the equipment.

These new business models dramatically increase the need for excellence in the dealership’s or the rental company’s information management and business processes for each piece of equipment and its maintenance.

A unique and critical need of dealerships and rental companies pertains to the interwoven business processes for delivering both depot and field services. The table above provides a basis for describing the complex set of maintenance-related business processes for a dealership. These processes demand a hybrid combination of maintenance management that involves assets on site in the depot and field service management for repairs at customers’ locations.

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