The industry stays under enormous pressure to reduce production costs, lifecycle costs of the machines predictive maintenance solutions can offer a need added functionality; Industries that are sensitive to maximizing equipment utilization, increasing safety, avoid pollution will see a much more significant added value in asset management products compared to industries that only look to decrease maintenance costs;
Sell uptime, not machines ? Only one example in changing existing business models depending on the quality that could be a good model, depending on the cost of the maintenance But more capital intensive as investments are higher, pre-financing And only if maintenance is at lower cost, higher efficient To safeguard higher uptime ?
The industry stays under enormous pressure to reduce production costs, lifecycle costs of the machines being one of its components. Better quality parts, higher performances do increase the purchase price for the users The maintenance departments and maintenance companies are sitting under high pressure to cut costs. They will not readily invest in new, risky technologies. A strategy will have to be developed for overcoming the fear and manage the risks associated with this new approach.
On the other hand highly specialized features such as condition monitoring solutions can be applicable to a very small number of buyers. (e.g. monitoring of wind meals). This makes that sellers must either build experience in maintenance themselves or distribute their products through companies that offer maintenance services and therefore have already experience and a good network of contacts in the industry.
who pays for new features & functionalities ? And Why should they ? - The new machine owner – to have a faster car ? - The dealer – he can make more maintenance or more efficient through the added inteligence, remote diagnostics & maintenance tools - The service provider with better onsite assistance – emergency intervention , at lower costs ? Total responsibility is expected and found evident as buying power is high. What with Pirate parts ? Allow to not, that is the question, but effect on total maintenance costs ? Guarantees, servicability ?
Advanced software tools - Pressure to develop more sophisticated methods for accurate estimation of time to failure (conditions, type of component and other factors) Considering underlying process conditions, component`s design and capability and economic options of component`s failure (costs, lost production, environmental safety)
Expert software Software that will have “expert” diagnosis capabilities. Less need for internal or external analysis; Can be easily used, interpreted and understood internally. Reduced effort of users/customers. Smart sensors Smart sensors will offer a cheaper solution to do it continuously. More signal processing and analysis capabilities Online systems (automated & real time) Low cost online monitoring systems that will permit the cost effective continuous monitoring of key equipment items. Less hands on data collection. Automated solutions will replace manual activities (e.g. entry of asset, sensor, data processing information, establishing of baseline levels, configuration of baselines and alarms for range of speeds, loads and operational conidtions)
Integration with other systems (one platform) - There are many software packages – condition monitoring+visual inspection (manually recorded checksheets)+preventive maitenance actions (CMMS;fixed interval)+plant/equipment performance measurements (process control system) One platform + common standards for interfaces of these different information systems Could be some company mergers, buy-ins…Rockwell automation bought a company busy with condition/predictive maintenance solutions (ENTEK IRD) and has as alliance with CMMS suppliers…
Total solution Not only integration with other systems, but also on the solution level. Market is fragmented with diversity of condition monitoring components (sensors, cabling, data acquisition, processing equipment, software). It is complex for users to collect all the necessary components from different suppliers and compose a necessary solution. Total solutions will be more appreciated by customers.
Built-in sensors as standard features Build-in sensors as standard features in certain machinery parts and large equipment items. Solution set up and use Acceptance to level that will be normal and part day to day activities of machinery users In future market development will be lead by solutions that will reduce complexity of implementation process – sensor installation, cabiling efforts, long cable runs, integration with data processing systems, set up of software system. Wireless solutions Long cabling as a problem? continuous condition monitoring is currently only carried out on a very small percentage of installed machinery worldwide, due to the cost and reliability limitations of wired or battery-powered technologies. Powering wireless sensor systems using vibration energy-harvesting enables low cost installation and maintenance of continuous on-line condition monitoring of plant and machinery. Wireless condition monitoring is a natural application niche for WSNs and related technologies. Remote control and management as an external service
Cheaper sensors & technologies Cost of change is important especially to SMEs. Cheaper solutions will generate greater acceptance. It will be economically reasonable and strategically important to have in in-house. It will also increase demand and number of items to be monitored.
software – the main added value The focus until now in condition monitoring market has been much bigger on hardware development particularly smart sensors. In Future focus will be more on software and services. The new added can be generated by offering specialists or possibilities to prepare and execute complex and unique analysis. Additional analysis to standard options. Costs of HR (monitoring, maintenance, skills) No need for expensive specialists; possbily no need for external contractors. Easy and fast by own people.
Holistic asset management is a critical concern. Continuous monitoring of plant and machinery is seen as a viable alternative for improving site productivity / efficiency: optimise the operation and availability of plant, improve cost efficiency of maintenance work, prevent accidents and make significant savings in energy costs.
In certain industrial installations redundancy is mandatory for safety. For these installations there is a tendency to apply a corrective maintenance policy. Still even in these installations new functions such as condition monitoring can make sense to help avoid dangerous safety and environmental issues or increasing quality of the output product.
Preventive maintenance cost is strongly dependant on the location of the machinery. If that is a remote installation (e.g. windmills on see) manual inspections are extremely costly
Aging machine base in the industry requires more maintenance Tighter maintenance budgets require better maintenance strategies Wider penetration of automation in the industry Cheaper condition monitoring becoming available due to new technologies that allow mass production of sensors Ecological trend in society : Energy efficiency over the entire machine lifetime requirements imposed by the legislation Strong competition especially from emerging economies increases the interest for maintenance automation Changing business models – companies selling services have to manage performance of their machines distributed at different client sites and therefore in order to keep maintenance costs low they have to remotely monitoring of machinery Increasing machine disposal costs makes it more attractive to keep machines longer in production and therefore maintain them better Remote production facilities like windmills have to be monitored remotely and maintenance has to be well planned since interventions are very expensive
Total solution approach: currently market is fragmented by a diversity of condition monitoring components (sensors, cabling, data acquisition and processing equipment, software). It is complex for users to collect all the necessary components from different suppliers and compose necessary solutions. In the future it can be expected that companies providing “total solutions” to customers will be in the winning position.
Ease of use: market will be lead by solutions that will reduce complex implementation process - sensor installation (also transducer mounting points in portable systems), cabling efforts & long cable runs, integration of data processing systems, set up of software system.
Article on the situation in the market http://www.eiu.com/index.asp?layout=ib3PrintArticle&article_id=837278268&printer=printer&rf=0
Report highlights: - By the end of 2010, telecom service providers worldwide will have outsourced about $53.5 billion worth of networking tasks to equipment vendors, 8% more than they outsourced in 2009 - Mobile network outsourcing is growing much faster than fixed (wireline) outsourcing: in 2008 revenue from mobile and fixed network outsourcing was roughly the same; by 2014, mobile network outsourcing will grow to account for 61% of all network outsourcing - The major growth areas for telecom network outsourcing include network maintenance, planning, design, and operations
Globally instead of 78% it is 57%
Rather than sketching out 4-6 potential business model alternatives in 60 minutes, most people feel more comfortable merely discussing ideas or one single business model. Big mistake. It’s more valuable to have several business model alternatives on the table so you can discuss their strengths and weaknesses.
Compare alternatives, use criteria
Selection criteria can be growth potential, risk, impact, etc.
Learning from successful business model innovation patterns from other industries
3 diverse businesses- with very diverse economics, skill-sets and cultures-tied together within a company . E.g. customer relationship business would thrive on ‘economies of scope’ whereas infrastructure business’s key financial KPI would be driven by ‘economies of scale’, ‘time to market’ would be the critical performance parameter for a product innovation business. When the margins come under pressure, CEOs would be faced with a tough choice of cutting the flab and sustaining the margins. In past, situations like this forced CEOs to do some soul searching and ask questions such as ‘what business are we really in?’ E.g. If the company was in the business of selling communication services/products, what business did it have to have in-house call centre or a software development or a product development department, thereby adding to opex and putting pressure on already strained margins.
Communities (open source, data mining) standards CBM based on available dual use hardware Condition based maintenance with cheap dual use sensors (Machines have more and more sensors that should be used for diagnostics as well ) Open source software Do maintenance only when necessary (save trees) No unplanned interruption of production process Grease according to need and only then Sensor builders Automatic suppliers Build Expert systems (self diagnosis) & Expert knowledge database Remote monitoring can be bought– the interpretation can be outsourced
CBM based on available dual use hardware Condition based maintenance with cheap dual use sensors (Machines have more and more sensors that should be used for diagnostics as well ) Do maintenance only when necessary (save trees) No unplanned interruption of production process Grease according to need and only then Sensor builders Automatic suppliers Build Expert systems (self diagnosis) & Expert knowledge database Remote monitoring can be bought– the interpretation can be outsourced
Verhaert Innovation Day 2011 – Frederik Wouters (VERHAERT) - Who says mechatronic industry is dead
WHO SAYS MECHATRONIC
INDUSTRY IS DEAD?
How to break out of traditional
competitive strategic thinking Blue Ocean
How can new technologies lead to major
Clear need for new machine features, but which ones ?
Smarter, self aware or even self healing machines
Higher performances & yields
• But addressing what market needs and industry trends ?
New specialized high value niche markets
New added value propositions
When market drivers become market needs
it is about the right mix of asset efficiency, performance,
productivity and sustainability
… preparing for major trends
Ericsson, Nokia Siemens Networks,
Alcatel-Lucent, and Huawei may
running three-quarters of the
networks on this planet
Success of business model innovation
How to deal with today`s business complexity?
Today`s business environment – highly
complex, uncertain and volatile
“78% of Benelux CEO`s anticipate even
greater complexity in the next 5 years;
only 57% believe they have ability to
manage it” /IBM, research, 2010/
Incremental changes are no longer
Operating margin growth in excess of
(compound annual growth rate over five years)
offer a better base for choice
Evaluate other business model strategies for
Your traditional business model
12 Pathways to different business models concepts
Traditional machine industry business models
1. customer relationship business
economies of scope, battle of scope (big players), service and customer
oriented business culture
2. product innovation business
time to market, battle of talent (small players), employee centered culture
3. infrastructure management business
economies of scale, battle of scale (big players), cost control, standardization
and efficiency oriented culture
“ Scope, speed and scale can not be optimized simultaneously; trade off`s …”
three different types of businesses to manage
Creating a new value proposition
The value of the product from the customer`s perspective
Resources: large scale of
Unbundled business model
Infrastructure management based model
Cost structure: high fixed
costs (leveraged through
scale and volume)
Usually delivered to B2B
Monthly rental fee
Usually commodity pricing
Low margins + high volume
A Mexican customer, running more than 100 OMNI and OMNIplus machines,
weaving denim at 700 rpm. In close cooperation with the customer, we were able to
raise the efficiency by 5% and the amount of A-grade by 22%.
Product & service innovation
strong talent pool
Activities: research &
development, bringing new
products to market
Unbundled business model
Product innovation based model
high employee costs
Usually delivered through B2B
intermediaries focused on
High premium because of
Highly service oriented
Partnerships: product and
from third parties
base and subscriber trust
acquired over time
Unbundled business model
Customer relationship based model
Cost structure: customer
acquisition and retention,
Freemium business model
1) Free basic
2) Premium with
Large group of free
Small group of
automated and low cost
POM: Free library of predictive modeling
- Free basic library of standard set of tools
- Sensor knowledge offering
- Customization of algorithms
- Delivering datasets for neural net learning
- Services for support
Free library of predictive modeling algorithms
1) Free library
2) Remote maintenance
existing processors &
Large group of free
Small group of
Web based platform
1) Agoria community
3) Image through
open source comm.
Automate suppliers, …
Expertise – people
Emerging market business model
a) for low income
value for affordable
b) for non-users:
a) low-income countries
b) currently non-users
a) for low income
countries – locals as
a) for low income countries -
localized low cost activities
b) for non-users: specialized and
adapted according to needs
a) Pay per use
b) No frills
d) Shared channels
(subsidized by other
f) Pay with tweats
g) Barter deals, etc
New business models
New major market changes / drivers
Create new market spaces
Thanks to SBO -consortium
POM : Prognostics for Optimal Maintenance, IWT-SBO-090045
9150 Kruibeke (B)
tel +32 (0)3 250 19 00
fax +32 (0)3 254 10 08
More at www.verhaert.com
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to innovate. We design products
and systems for organizations
looking for new ways to provide
value for their customers.
We are a leading integrated
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new products and business in
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