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1LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Uptime at a Fraction of the Cost: Redesigning
Field Service with Augment...
2LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
COVID-19: Economic Fallout
Todate:
Jobs lost >150 million
Hours lost > 1...
3LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
COVID-19: Job Losses (Examples)
Airlines > 150,000
United Airlines 36,00...
4LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
COVID-19: Different Impact by Sector (e.g. EU)
1
1 Food & Beverage
2 Che...
5LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
COVID-19: Structural Changes
Characteristics
Abrupt
Supply & Demand
Deep...
6LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
New Drivers for Digitization
Pre COVID-19 driven by vision, productivity...
7LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
The Service Conundrum
As (product) sales fall  service as the revenue e...
8LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Service Capacity: A balancing act
Always risky to cut service capacity –...
9LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Uptime as a Fraction of the Cost
Service provider
Customer
Technology pr...
10LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Towards Uptime at a Fraction of the Cost
Reduce/eliminate unnecessary w...
11LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Augmented Reality Potential
 Reduce travel / Reduce service
visits/cal...
12LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
AR Tactical Introduction Approaches (examples)
13LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Augmented Reality Potential
Task complexity
Task frequency
H
H
Standard...
14LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Augmented Reality Potential
AR enhancement Low Medium High
Low
Speed ↑
...
15LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Si2 2018 AR in Service Survey |n=120
60% Electro-mechanical): engineeri...
16LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Acute Problems with AR in Field Service
17LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Acute Problems with AR in Field Service
18LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Acute Problems with AR in Field Service
19LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Acute Problems with AR in Field Service
20LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Acute Problems with AR in Field Service
21LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS
Blueprint for AR in Service
 Link to strategy, organizational structur...
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SLN Roundtable 16th July - Uptime at a Fraction of the Cost: Redesigning Field Service with Augmented Reality 2 presentation

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Introductory Presentation

- COVID-19 induced restrictions and recession change the market context
- Uptime at a Fraction of the Cost imperative for survival and competitiveness
- Technology generally and AR particulary as tools to achieve cost reduction objectives

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SLN Roundtable 16th July - Uptime at a Fraction of the Cost: Redesigning Field Service with Augmented Reality 2 presentation

  1. 1. 1LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Uptime at a Fraction of the Cost: Redesigning Field Service with Augmented Reality LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS SERVICE LEADERS NETWORK Virtual Roundtables
  2. 2. 2LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS COVID-19: Economic Fallout Todate: Jobs lost >150 million Hours lost > 10x global financial crisis Massive job retention schemes cushioned impact in some countries – but deficit/debt almost double global financial crisis 2020 IMF OECD China -1.0 -2.6/-3.7* US -8.0 -7.3/-8.5* Eurozone -10.2 -9.1/-11.5* World -4.9 (-3)** -6.0/-7.6* GDP Forecasts (%) June 2020 * 2nd wave scenario ** April 2020
  3. 3. 3LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS COVID-19: Job Losses (Examples) Airlines > 150,000 United Airlines 36,000 Norwegian Air 9,000 SAS 10,000 Air France 7,500 Air Canada >5000 BA 12,000 Easyjet 4,500 Ryanair 3,000 Lufthansa 22,000 TUI 8,000 Oil & Gas > 100,000 BP, Shell, Chevron, ExxonMobil ~ 15% of workforce (> 10,000 each) 250 O&G companies in bakruptcy by end 2020 (US) Oil services >15,000 (US) Major Industrials > 350,000 Renault, Daimler >15,000 each Nissan >12,000 (Spain, US) Bombardier 2,500 GE >9,000 (Aviation, Alstom) Rolls Royce 9,000 Boeing, Airbus >22,000 MTU >1,200 ThyssenKrupp 3,000 Rolls Royce 9,000 SKF 2,500 ZF 15,000 BMW >6,000 Emerson 3,900… Rentals/Services Hertz 10,000 Uber 6,700 Lyft 1,000
  4. 4. 4LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS COVID-19: Different Impact by Sector (e.g. EU) 1 1 Food & Beverage 2 Chemicals 3 Construction 4 Utilities 5 Metals 6 Pharma 7 Transport excl. AL 8 Other manufacturing (automotive, el/mech engineering, P&P, …)2 3 4 5 6 7 8 Arts Airlines TTH H Sources: Eurostat, McKinsey & Co, others COVID-19 Impact Structural Challenges pro COVID-19 H
  5. 5. 5LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS COVID-19: Structural Changes Characteristics Abrupt Supply & Demand Deep Duration? Permanent Structural Change Decoupling US/China * * US/EU Trade patterns / Supply chains Peak oil / REN / Electrification Remote working / business  Business travel  Commercial property  Transport  City planning E-Commerce/Retail  City planning  Warehousing  Logistics DIGITIZATION
  6. 6. 6LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS New Drivers for Digitization Pre COVID-19 driven by vision, productivity and cost expectations, peer pressure During COVID-19 driven by need: safety, travel restrictions, lack of people  business & transactions without physical contact… Post COVID-19 driven by need: remain competitive (cost) and survival „Years of progress in a few months“ – Sundar Pichai, CEO GoogleDIGITIZATION
  7. 7. 7LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS The Service Conundrum As (product) sales fall  service as the revenue engine, but Service revenue driven by existing installed base, contracts, people (no capacity cuts)…  This recession unprecedented (depth, duration virus dependent)  10 points in lower utilzation of assets leads to 6 points drop in service revenue  Need for low contact interventions (assymetrical risks, age…)  Travel restrictions (short-term,medium-term, long-term)  Very high uncertainty  As customers face dropping demand  price pressures increase  competitive intensity increases
  8. 8. 8LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Service Capacity: A balancing act Always risky to cut service capacity – service cannot be stored: - customer complaints - lost revenue - reputational damage - impaired competitiveness But in (field) service capacity and utilization define the cost base – which may be no longer sustainable Ability to provide service as required & remain competitive Reduce cost & remain competitive
  9. 9. 9LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Uptime as a Fraction of the Cost Service provider Customer Technology provider Uptime* at a fraction of the Cost Outcome based services /As-a-Service offerings  transaction costs, risk sharing (incl. dynamic warranties)  pay for result (OEE) –not action (generates cost) Digitization  risk reduction  reduce/eliminate unnecessary work (prevent)  execute work at required quality/time with minimum cost Business model issue Operations issue Product supplier *e.g.OEE
  10. 10. 10LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Towards Uptime at a Fraction of the Cost Reduce/eliminate unnecessary work (prevent) - Prevent unnecessary work from arising (predictive systems) - Eliminate errors (zero defects) Execute work at required quality/time with minimum cost - Reduce waiting times (people, tools, materials, travel…) - Reduce capacity costs (lowest possible capacity) - Reduce execution times (diagnosis, intervention) - Maximize utilization (spread resources over maximum possible jobs) - Utilize most cost-effective resources - Utilize resources in most cost-effective way X% 30? 50? 70?
  11. 11. 11LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Augmented Reality Potential  Reduce travel / Reduce service visits/calls/errors (follow-up/repeat calls)  Overcome travel or trade restrictions  strengthen local capacity  Redeploy resources: Experts at base - novices in field  Make better use of older, more experienced resources (deep smarts)  Reduce the retirement of institutional knowledge (what is average age of experienced field service engineers?  Offload intervention work to customers (ATM strategy) or local subcontractors  Reduce nominal capacity without impacting capability (reduce need to recruit service workers)  Redesign field service approach (full capacity v expert capacity ( offloading or outsourcing)  Frees resources to build up sector/domain expertise (focus on outcomes, performance based models, productivity)  Vastly Accelerate training and cut training times (own personnel, subcontractors/dealers, customers)  Eliminate training manuals/reduce human trainers/increase trainer productivity  AR with digital contect (superimposed data, instructions, case files) speeds up interventions  Enable remote task sharing  Integrate with IoT (training, remote diagnostics, toubleshooting, interventions) for max outcomes
  12. 12. 12LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS AR Tactical Introduction Approaches (examples)
  13. 13. 13LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Augmented Reality Potential Task complexity Task frequency H H Standard (Automated) Digital Support AI Support Human Expert Support L L
  14. 14. 14LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Augmented Reality Potential AR enhancement Low Medium High Low Speed ↑ Errors ↓ Training ↓ Speed ↑ Errors ↓ Training ↓ Medium Speed ↑ Errors ↓ Training ↓ Speed ↑ Errors ↓ Training ↓ Speed ↑ Errors ↓ Training ↓ High Speed ↑ Errors ↓ Training ↓ Speed ↑ Errors ↓ Training ↓ Experience Level Task complexity
  15. 15. 15LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Si2 2018 AR in Service Survey |n=120 60% Electro-mechanical): engineering, manufacturing or maintenance services. Remainder even: Automation/instruments, O&G service, powergen, utilities, energy. 67% 19% 8%
  16. 16. 16LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Acute Problems with AR in Field Service
  17. 17. 17LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Acute Problems with AR in Field Service
  18. 18. 18LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Acute Problems with AR in Field Service
  19. 19. 19LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Acute Problems with AR in Field Service
  20. 20. 20LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Acute Problems with AR in Field Service
  21. 21. 21LEVERAGING SERVICES TO WIN IN INDUSTRIAL MARKETS Blueprint for AR in Service  Link to strategy, organizational structure & processes  Resource allocation, capacity, offloading & outsourcing  Quantification of cost reductions  Voice of the Customer (satisfaction, costs/benefits, challenges & solutions)  Technical optimization / Vendors  Overcoming challenges (organizational, managerial, technical)

Introductory Presentation - COVID-19 induced restrictions and recession change the market context - Uptime at a Fraction of the Cost imperative for survival and competitiveness - Technology generally and AR particulary as tools to achieve cost reduction objectives

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