CMMS / EAM / Asset Management System

Driving growth in aftermarket services

Is your EAM/CMMS helping or holding you back?

By Sheila Kennedy, CMRP, contributing editor

The lucrative potential of aftermarket services has product manufacturers formulating new service offerings and service contractors stepping up their game. Some are doing better than others, and it often depends on the tools used.

Before the technological advancements and hyperconnectivity of Industry 4.0, original equipment manufacturer (OEM) services revolved around replacement parts while service contractors performed planned maintenance and reactive repairs. Today’s industrial internet of things (IIoT) enables greater opportunity to control uptime and performance throughout the asset and service life cycle, as well as the confidence to commit to guaranteed service level agreements (SLAs).

As a result, OEM leaders are introducing strategic services to supplement or replace traditional product sales (aka servitization) and service contractors are developing more sophisticated offerings to enable upselling, cross-selling, and longer-term customer relationships.

The key to success is digital transformation. The right tools promote growth in service scope and quality, driving customer satisfaction, retention, and revenue. Central to an effective toolset is enterprise software that eliminates data, functional, and technological silos, with a robust asset management (EAM/CMMS) solution at its core. This article illustrates why getting it right is worthwhile, and shares characteristics of optimal aftermarket solutions.

Data validates aftermarket objectives


Companies offering annual aftermarket service contracts are 24% more likely to report profitability than those doing reactive field service work, according to a May 2018 study from IFS. More than 41% of Digital Transformation Leaders have implemented software to manage contracts and warranties, as opposed to less than 12% of laggards. Analytics was the most popular area for planned expenditures.

Inadequate software is a challenge. A January 2018 IFS primary research study found that legacy software solutions used by specialty and trade contractors could prevent them from profitably delivering aftermarket services to their customers. Of the 85% of study respondents who said they have maintenance contracts, only 14% said their software facilitated these contracts "very well." For example, most respondents lack the ability to perform key functions on touchscreen devices.

A September 2018 survey conducted by McKinsey and the Association of Equipment Manufacturers (AEM) revealed that when customers are dissatisfied with the technical capabilities of agriculture and construction OEM channel partners, they go outside to independent service centers and others, after warranty, including doing repairs in-house. The reason illustrates generational differences. Younger customers (aged 18 to 35) are three times more likely than their older counterparts to go outside the OEM channel for repairs. Their biggest frustration is that repairs and service take too long. McKinsey recommends that solutions going forward should focus on convenience and interaction through digital channels.

Meanwhile, leaders are leaving the competition behind. The Service Council’s 2018 Service Leader’s Trends survey found that Service Leaders are aggressively investing in technology with 66% indicating that they will be increasing their investments this year. And, one out of five will increase it by over 10% from last year.

Integrated solution checklist


Success in aftermarket services requires agile software, processes, technologies, and systems to adapt as the business model evolves. Each element in the following checklist provides a step up in efficiency and effectiveness. Together, they form an integrated, holistic solution with crucial EAM/CMMS touchpoints.

Structure

  • Cloud-based connectivity: Allow authorized stakeholders to securely access selected data and interact with the system and each other from any location.
  • Integrated enterprise software: Seamlessly share relevant information among EAM/CMMS, enterprise resource planning (ERP), field service management (FSM), and customer relationship management (CRM) systems.
  • Integrated IIoT technologies: Receive and process high volumes of live, streaming condition and process data from smart sensors and drones.
  • Integrated condition monitoring (CM) technologies: Receive and process asset data from vibration analysis, ultrasound, infrared thermography, oil analysis, motor circuit analysis, and similar technologies.

Core features

  • Service contract management: Track and manage the terms, conditions, and statuses of service work and automate customer billing.
  • Warranty management: Track and manage the terms, conditions, and statuses of equipment warranties and automate warranty claims.
  • Subcontractor operations: Utilize subcontractors when demand exceeds internal capability.
  • Asset and service history: Capture all asset details and a comprehensive record of activity associated with each asset.
  • Asset location tracking: Ensure accurate identification of asset locations for logistical purposes and to satisfy audit and compliance requirements.
  • Personnel monitoring: Monitor the status and whereabouts of remote crews, technicians, and service vehicles to ensure safety and efficiency.
  • Machine learning (ML) and analytics: Automate performance and reliability analysis and diagnostics for individual customers and in the aggregate to learn from, predict, and proactively correct deficiencies.
  • Dashboards and reports: Provide real-time visibility into crucial asset and condition statuses and key performance metrics.
  • Call center technology: Incorporate artificial intelligence (AI), VOIP, call routing, and interactive voice response (IVR) to accelerate service response times.

Inventory process optimization

  • Inventory management: Optimize the planning, forecasting, and replenishment of spare parts and components, including vendor managed inventory.
  • Parts tracking: Monitor the whereabouts of parts and components, including serial number traceability and global positioning system (GPS) capability.
  • Bar code and QR code scanning: Employ the latest asset and inventory scanning techniques to save time and improve data accuracy.
  • Reverse logistics: Support returns to inventory and returns for repair, refurbishment, refit, swap, and advance exchanges, including repair depot operations.

Service process optimization

  • Predictive maintenance (PdM): Use vibration, temperature, pressure, and other CM data to predict and correct asset degradation before failure.
  • Prescriptive maintenance (RxM): Apply ML and AI to PdM to improve predictions and prescribe corrective actions.
  • Automatic service orders: Use PdM, RxM, and IIoT sensor data to automatically generate service work orders when condition thresholds are met.
  • Integrated scheduling and dispatch: Use IIoT, service order, and SLA data to automatically send qualified labor resources at the right time to the right place with the right parts and tools.
  • Route optimization: Leverage dynamic geographic information systems (GIS) to ensure the most efficient service routing.
  • Contract compliance: Provide visibility for technicians of what is required of them regarding SLAs, pricing, and other customer-specific contract requirements.
  • Mobility: Provide access to the EAM/CMMS in real time from any location to retrieve work instructions and supporting files (manuals, blueprints, videos, etc.), log inspection and service activity, capture photographic evidence, and access subject matter experts (SMEs).
  • Collaboration: Support real-time interaction between field personnel, customers, and SMEs via voice, live video, messaging, and augmented reality (AR).
  • Failure analysis: Perform root cause failure analysis (RCFA) and failure mode and effects analysis (FMEA) to identify and correct underlying risk factors.
  • Asset disposition: Manage the recycling or disposal of assets or components at the end of their useful life.

Essential learning

  • Training and development: Incorporate AR, virtual reality (VR), and mixed reality (MR) for simulation training and on-demand refreshers, and team collaboration tools to extend knowledge that would otherwise leave the company.
  • Product improvement: Automatically relay ML findings and customer feedback from the field to Engineering for product upgrades and quality improvements.

When all components – from contracts to inventory to logistics to mobility – talk to each other, it enhances the ability to grow recurring revenue from services, parts, and consumables; improves the customer experience; and enables long-lasting relationships.

Ultimately, it comes down to the business culture. Companies that are willing to treat service as a profit center and are open to innovation and change are more likely to embrace digital transformation, servitization, and aftermarket services. Meanwhile, service leaders are snapping up market share.