Multivendor Installed Base Service Management in the Heavy Equipment Industry - A Value Proposition

The manufacturing industry is subject to structural economic change. The paradigm shift from a product-dominant to a service-dominant logic can hardly be refuted. The shift in focus to services is a shift from the product and manufacturing perspective to the utilization and customer perspective. Being confronted with the strategic challenge of reducing operating costs while at the same time meeting ever-increasing service demands, manufacturing firms struggle to find the appropriate information systems solution for planning and operations. The Institute of Information Management (IWI) at the University of St. Gallen aims to address this issue from an information systems perspective. Starting the analysis with the customer relationship management (CRM) seems reasonable, since the system is designed for sales and service planning. However, information on the installed base is limited in the technical level of detail. Serialized descriptions about sold assets incorporate information on maintenance, contracts, and warranty, but lack deep technical information. Heavy equipment goods are hence not adequately modeled in the CRM system. The equipment goods that are produced by this industry are characterized as longliving and highly productive. Consequently, maintenance, repair and change operations are particularly important capabilities of the heavy equipment manufacturers for achieving and maintaining high profit margins. Traditional mobile CRM solutions obtain replication-based information on the installed equipment and consequently, service technicians have very limited access to back stage information. Heavy equipment goods manufacturers are well known for operating internationally with strong exports. Delivering excellent services to customers who are distributed around the globe states another key capability in achieving competitive advantages. Since business customers show enormous interest in the condition of the installed heavy equipment, large manufacturers have built large-scale proprietary systems for service support which combine detailed knowledge of the heavy equipment [bill of material] with the customer knowledge which is buried in the CRM. The installed base describes the equipment installed at the customer. Installed base data comprise the bill of material, customer master data, and transactions performed on the equipment that is owned by the customer. Accordingly, the installed base, in its core definition, has to be considered as collaborative. However, delivering excellent service worldwide by a singular manufacturer becomes physically very hard to realize. The necessary workforce would be too large, while education remains an unsolved issue. Moreover, it is often not profitable to set up service locations and the corresponding infrastructure in small markets. Collaboration with partners that know the local market is hence a necessary precondition. The service processes enabling installed base management for heavy equipment goods are known but the implementation falls short in collaboration, scalability and consistency. Addressing these shortcomings, the IWI proposes a smart multivendor installed base management. Smart is the combination of the as-is bill of material [from production planning systems] with as-is maintenance data and sensor data [from the machinery equipment] to achieve a deeper customer integration. Big data management allows the aggregation and consolidation of all installed base data across enterprise boundaries without suffering information losses. Realtime processing of mass data opens new sources of revenue in terms of performance-based contracts and condition-based maintenance and recovery services. Equipped with this comprehensive source of information, business analytics are able to perform extensive analyses that generate deep insights about the customer usage of their productive machinery equipment.