Breaking Down Silos to Build a Stronger Service Infrastructure (2 of 3)

Breaking Down Silos to Build a Stronger Service Infrastructure (2 of 3)

Pollock: One of the things that I was thinking about is that we’ve been talking about the definition of SLM. We’ve been talking about the strengthening of the capabilities of PTC, and what we really need to talk about to translate it into how that impacts the marketplace, how that impacts the OEMs that you support. So, with respect to SLM solutions that you offer, how can an OEM use that solution to help drive advantage, revenues, and change within the organization? How can they use the services you offer?

Good question and ultimately that’s what matters is the value that gets created for the OEM and their customers. So, there’s a few… let me give a few examples and start with maybe the problem that OEMs are facing. Fundamentally OEMs have seen their service businesses explode. And, if they haven’t, they better get working on it, because their competition is in terms of building a real service business inside of an OEM. And, as that’s happened, it has happened quickly, organically, it’s happened through acquiring service providers. They have very quickly built up a collection of resources working on service that don’t have good infrastructure to help them share information and manage process transparently across the different constituents. And this has happened because of the way the service business has exploded within their company. It’s not like in manufacturing where OEMs have a tremendous amount of historical domain expertise, process knowledge, and they really optimized those areas of their business. That hasn’t happened in service yet, and that’s an opportunity. The other thing that’s happened in addition to the explosion and complicated nature of service is that products have become more complex. And as products have become more complex, whether it’s the number of possible configurations of a product or the amount of not just mechanical and hydraulic, but electrical content and software content, as all that complexity has enriched a product, it has made service more challenging.

So what’s that has lead to, Bill, is some negative outcomes. Things like technician productivity have decreased for most OEMs in the last 10 to 20 years because of the complexity of the product and the information skills required to do service has exploded. But, while that has gone on, we've still given them the same information we used to, to do their job like paper documents which are hard to read and understand.

In the area of parts, parts have proliferated and expanded and exploded with all these different product configurations. Yet, we still store parts the same way that we did. We still think about inventory and parts identification the way we did in the past. These kinds of problems have created inefficiencies, lower productivity of technicians, lower optimization of parts revenue and profitability, higher warranty costs, etc. And, that’s causing a big negative outcome for the OEM. 9:12

So, what SLM does, SLM enters the picture and provides an opportunity to solve some of those problems. Within the realm of parts management and parts identification, the solutions that are available today allow you easily identify the right part for a particular service for a particular product without any confusion that you might pick the wrong part or order two or three. They allow you to do things like optimize the location and value of inventory required across the globe, across every level where you store inventory in your network. That has huge benefits in terms of fill rates and in terms of optimizing the inventory on hand.

As it relates to technician productivity, solutions that deliver three-dimensional animated movies of how to perform a service task and train someone at the moment of need on how to perform a task create tremendous opportunities to improve technician productivity. I will give you a metric. Within the industry we find that our customers have between 20 and 40% of a technician's time every day preparing to do the job, not turning a wrench, not creating value for a customer or billing for the OEM. We can compress that dramatically by giving them the right technical information and the right parts information when they need it. Now, all of this creates value for the OEM because it allows them to capture more revenue, more profitability.

The other thing it does is generate a higher level of satisfaction because if your customer can have their service needs fulfilled more quickly because the right parts are available, the technicians know how to identify it, and they are trained to do their job that first time they come to your house to fix something or the first time you take your car to the repair shop, then you satisfaction level goes up. That benefits the customer which is the most important thing because the OEM wants to keep that customer happy. Long answer, but all of those things contribute to the value that OEMs can see from Service Lifecycle Management.

Pollock: And that answer keys

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