Where are my spares?

Last week the European field service community convened for the first time in large numbers at WBR Field Service in Amsterdam. We had a lot of catching up to do. Apart from topics addressing the next big thing, the down-to-earth conversations had a common theme: where are my spare parts? Covid-19, Ever Given, and geo-political instability are disrupting supply chains. As a result, our service engineers are struggling to keep the world running due to missing parts.

We apologize for the inconvenience

My colleague brought her car for regular service. Due to the unavailability of spares, her car was in repair for five weeks. In the meanwhile, she got a rental. Guess what that costs? Guess what it does to brand and customer experience?

My out-of-warranty high-tech desk lamp showed intermittent behavior ten months ago. Customer support told me that due to a shortage of tools and materials they could not help me other than putting me on hold. After many touch points and mounting emotional pressure, they’ve sent me a new lamp for free. Though relieved I finally have light again, I’m not sure about a repeat purchase.

Last week a heavy truck made an illegal u-turn on an important thoroughfare in our city, overturning multiple traffic lights. Due to supply chain disruptions, repair material is due to arrive in three months. Now the intersection is partially blocked and traffic during rush hour has to be managed by traffic officers. Can you imagine the traffic congestion and productivity hours lost?

Supply disruptions are here to stay

For many years we’ve taken smooth and lean supply chain execution for granted. As a result, most field service initiatives were about optimizing the labor component and deploying smart technology. Recent events trigger a wake-up call. Spares availability is back on the agenda.

For a lot of service organizations, spare parts cost is the second largest cost component after labor cost. With increasing and consistent supply chain disruptions, spare parts availability is becoming distractor number one. This is preventing organizations from keeping their installed base up and running. This is causing organizations to default on SLA and contractual obligations.

Of all the supply chain-related challenges, the two most discussed topics at WBR Amsterdam were:

How do we get sufficient parts for our service commitments?
And, in case we have a shortage, how do we prioritize parts availability?

Alternative sourcing

Everything that comes out of an asset after a service intervention represents a residual value. That value increases when your normal parts supply gets disrupted.

In my career, I’ve experienced that those reverse materials tend to disappear in a ‘grey circuit’ when not facilitating my technicians with an easy and guided admin for proper reverse routing and handling.

What I formerly saw as a hassle to manage, now becomes a welcome additional source of supply. Apart from solving the sheer availability of parts, the lower cost of refurbished parts allows me to offer differentiated pricing when using parts. I can now choose from new, equal-to-new, certified-spare-part, and used-class. This provides me with both a commercial advantage as well as a cost reduction. I win on multiple axes.

Spread the wealth

Even with an additional source of supply through reverse channels, I still had situations where the demand for parts was larger than the supply. My challenge is how do I spread the wealth of available material over all my demanding customers?

My most extreme situation where supply and demand were out of sync, was when I faced a quality-related recall. Overnight, all existing asset owners would demand a retrofit while my supply chain was restocking on the new revision level. I felt a need to prioritize both internal business objectives and customer entitlements.

Typical supply chain solutions allowed me to deploy first-come-first-serve. Advanced service execution systems enabled me to prioritize based on Account and Service Contract attributes. For example, platinum customers first, or contracts up for renewal in the next 6 months first. Contingent to my business objectives I could spread the wealth and manage the risks of scarcity.

Inconvenience alleviated

Supply chain disruptions and mismatches between supply and demand for spares will continue to cause inconveniences. With modern-day tools, we can alleviate the pain and remove the arbitrariness of scarcity.

It’s a bit like waiting in the queue at a call center. We don’t like waiting, but at least we have visibility on the queue. And if that is too long, we can upgrade our service level to get the benefits of a priority queue.

Learn about ServiceMax’s solutions for spare parts, returns and depot repair management:

Continue reading about spare parts planning and supply chain disruption:

This article is published on Field Service Digital.

Standardization vs Flexibility: How to Shape Your Service Transformation

Last month I celebrated my five year anniversary working for a field service software company. Having had a prior history of 25 years in service delivery and service sales, many service transformation engagements have been a trip down memory lane. As former business leader I too sought for modern tools to replace my legacy business processes. When software vendors showed me their capabilties, they showed the happy path. As service-firefighter I knew that real life needed contingencies for not-so-happy.

You are special

When you’ve run a service organisation for multiple years, you’ve built a routine of tools and processes to get the job done. If, like me, you had limited access to budget, your business processes will be a hodgepodge of makeshift tools.

And then, either by design or by the turn of events, your company is in a digital and service transformation process evaluating standard software. The happy path looks great. It’s easy and it’s efficient. But something doesn’t feel right. Your business is more complex. You have many variants and exceptions. You are special.

Of course you can ask the software vendor to demo all those exceptions, but do you really want to re-create your legacy business processes with modern tools? Or, do you want to make use of the new tool capabilities to challenge your legacy processes?

Common global process

One of the big drivers for new tooling is standardisation. Not only can you rationalise your current IT-stack, you can also ‘clean-up’ the sprawl of business process exceptions. In transformation journeys I often hear verbage like ‘common global process’. When I do hear this, I try to understand how will employees and customers will benefit from a common global process.

Do customers want a standard one-size-fits-all process, or do they want a contextual transaction? Do employees want a business process that is cast in iron, or do they need a level of flexibility to address the unforeseen? This brings me to the theme of this blog: is the happy path really so happy or do we essentially need something different?

Contextual processes

At the Copperberg Power of 50 event we talked about “managing the hybrid service paradigm”. If on the one end of the scale we have forces driving a common global process, then hyper-personalisation is pulling towards the other end. The good news is that technology can help us find the middle ground. One does not have to go at the expense of the other.

If we picture the blend of interests:

Business and IT leaders want to exercise control over the execution of business processes.
Employees need a level of autonomy in how they deliver their work to cater to expecting and vocal customers.
Customer expect services to be delivered situational to their business impact … and those tend to fluctuate.

The above three actors operate in shifting contexts. Because priorities tend to change over time, we advise business leaders to enable and empower employees deploying contextual workflow beyond the happy path. Because it is beyond the happy path where friction, inefficiencies and dissastisfaction manisfests itself.

80% Global, 15% local and 5% situational

At the Copperberg Power of 50 event, we saw a video of service technicians Amy and Jake from DormaKaba. They talked about how every day is different, how they need trust and empowerment to get the work done. What this means? If we want happy customers and technicians, we need to abandon the belief in a happy path and move towards contextual business process behaviour.

Guiding many transformation journeys for our customers, we’ve seen we can strike a balance between business process standardisation and situational flexibility using modern workflow techniques. We call this 80% global, 15% local and 5% situational.

Global: Despite the uniqueness of service businesses there is a core of commonality in business processes. This core will ensure that global leaders are able to roll-up the data for decision making purposes.
Local: Instead of standardising everything, we have to be mindful that localisations exist for a reason. It’s often the commercial reality that a local product-market combination that dictates how we need to do business with those customers. Without localisations a company may not be able to do business.
Situational: Echoing the words of Amy “every day is different”, we may have agreed upon a process, but in day-to-day operations we encounter unforeseen situations. Instead of responding with a freeze we need enable and empower employees to make informed decisions to maintain a flow, to keep the world running.

Adoption drives Value

The happy path is what any software tool can support. Implementing the happy path may even seem to be the preferred transformation path. The value-proof is in eating the pudding. When you deploy the happy path it is very likely you will encounter the adoption hurdles assosciated with local and situational variants. Needless to say: no adoption, no value.Thus, the way forward is to account for local, contextual and situational workflows. When you ask for your next demo, do ask to deviate from the happy path. Ask how the software facilitates the excpetions. What insights and visibility will be available to the users, such they can make informed decisions? Decisions that align with your overall company objectives.

This article is published on Field Service Digital.

The mouse and the cheese

Who hasn’t ever played the game of drawing a line from the mouse to the cheese though a seemingly impossible maze? Do you still remember the trick? Spoiler, don’t start at the mouse but begin at the cheese. Start with the end result in mind.

Running a transformation journey in business isn’t any different. True, the end point may be a moving target, but still to a major extent your journey is defined by a business objective.

Why am I bringing up this topic? At the Field Service News Live Symposium in Birmingham, UK we had a lot of conversations on AI. If AI is the cheese, then the technician is the mouse. We know that no matter how much technology we deploy, as long as we live in a world of physical objects, ultimately somebody will need to hold the ‘wrench’.

Technician of the year

That ‘somebody’ who is holding the wrench is Jack Ogden. Jack works for Beckman Coulter. Jack was awarded technician-of-the-year by Field Service News. For me Jack and all the other Jacks are the true heroes in the service domain. They keep the world running. They are the heroes on site. To be successful they need the right tools, correct information and empowerment to perform their ‘magic’ in the face of ever more demanding asset owners. What do we give them? State-of-the-art field service management tooling? AI?

A different planet

Now picture yourself having toasted to Jack yesterday evening and today you are engaged in an AI conversation with a group of service executives. Have we landed on a different planet? I can’t shed the feeling there is a gulf of space between day-to-day service operations and the AI discussion. Echoing the words from Rajat Kakar, it feels like a maze separating the mouse from the cheese.

Paradigm shift

Don’t get me wrong. As much as I comprehend the world of Jack, the cheese is real too. I do believe AI has a substantial potential in the service domain. Though I may not have a comprehensive understanding of what AI means, the fact that during the service lifecycle massive amounts of data are generated, I can imagine that deep learning and mining tools can lead to better and optmised decision making.

And when I focus on decision making, service executives and Jack are not so different. In a recent ride along I did, the focus was on having reliable asset data. To be more efficient and proactive. The sheer amount of assets and the long lifecycle makes it practically impossible for humans to consume the data and to prepare for each eventuality. Tribal knowledge and experience drove historical service execution. Todays ambition for this company is to empower every service employee make informed decisions.

We want to move from ‘assumed’ to ‘informed’

Navigating the maze

When we were children we found joy in navigating^[1] the maze. Through trial and error we ultimately found a strategy. In business the stakes are a little higher. Still, there is a lot of trail and error with new technology adoption. But we can be smart at it when we have the cheese in mind.

With AI we don’t want to repeat the same ‘mistake’ a lot of companies made with big data. Big investments resulting in unused^[2]data lakes. An example of starting at the mouse and uncertain where the cheese is. If forementioned ride along is exemplary, we can define the cheese as the business desire to facilitate informed decision making over assumed decision making. Thus the path through the maze become much clearer.

Making an impact with asset data

AI has the capability to convert huge amounts of data into ‘intelligence’. The quality of intelligence is based on what you feed into the algorythm. Simple rule: garbage in, garbage out (GiGo). Before you start you have to be very conscious about your data. Illustrated by a failed AI implementation at Amazon. When you use historical data to teach the algorithm, beware that the decisions made by AI will be a compound of all bias and mistakes made in the past.This brings me back to Jack. If Jack wants to make an impact, he needs asset data. If the volume of asset data is big, it would be a great help to Jack if AI could make suggestions. Not decisions, but suggestions … because ultimately it is Jack who is holding the wrench.

^[1] For the mathmeticians amongst us, have a look at Trémaux’s algorithm.

^[2] According to Forrester “between 60% and 73% of all data within an enterprise goes unused for analytics”. InsideBIGDATA asks the proverbial question “are data lakes just dumping grounds?”

Should I Buy An Asset-Centric Solution or Build It?

Co-author: Katharina Streater

“It takes twice as long, at twice the cost and you will only get half of the expected functionality.” Many times, we have heard this proverbial phrase. And even if it is true, does it automatically mean you will go for the buy-variant? We’ve learned that decision-making consists of weighing many pros and cons. In this blog, we’ll provide you with a set of arguments to take into consideration.

More than just the financials (The Mindset Matters)

In our experience, a build-versus-buy decision is both multi-faceted and multi-stakeholder. To give you an example: A business leader will typically look for business process support and time to value. An IT leader may have a preference to stay on the same platform and exert control through the deployment of internal IT resources. Procurement will weigh the risk profile and continuity of the vendor base. The security officer may focus on secure, compliant transfer and storage of the business data. And finance? From finance, we expect that they will compare the cost of build versus buy in relation to the budgeting cycle.

What you have here is a mix of different personas, each with different priorities and objectives. So, how to tackle this, how to move forward? You can start to untangle this Gordian knot by genuinely trying to understand and acknowledge each stakeholder’s position.

One word of caution. However accurate the numbers are that you come up with. As you are zooming in on the pros and cons with the goal of creating a viable comparison, you need to do your homework and not only gather the facts but also be aware that each stakeholder has a different motivation.

As a business leader from Bosch said so eloquently:

“I don’t care about the make and model of the tool. I’ve got a business to run” – business leader at Bosch

We started this blog by outlining the various personas that each have their own priorities, but at the end of the day, there is one common goal: keeping the business running—today and tomorrow. And to do this, you need a solution that can either be built or bought.

What are the hidden and obvious costs?

Let’s start with the most rational comparison: the financial axis. For sure the first and foremost thing finance wants to do is compare the cost of build versus buy. The purchasing cost is easy to identify. It’s the figure at the bottom of the vendor’s quotation. What is on the build side of the equation is more elusive. If building software is not your core business, it is difficult to grasp what effort goes into creating and maintaining a business application. When we see stakeholders evaluating the financials of build versus buy, typically only a fraction of the build costs turn up in the comparison. The reputed tip of the iceberg.

Together with a number of prospects, we created a model to help identify and uncover how far the iceberg extends under the waterline, in other words—to make the hidden cost elements visible. While building the model, we had to face difficult questions such as:

How much effort does it take to retrieve the data points?
Is it even possible to obtain an insight into the below-sea-level items?
To what extent will a complete view of the build cost influence the decision-making?

In close collaboration, we discovered two findings:

Apart from any numeric comparison, getting a complete picture of all cost elements proved to be extremely insightful and changed how both scenarios are evaluated.
Appraising the ‘submerged’ cost elements is essential in defining the tipping point.

Evaluating build versus buy

When making a build-versus-buy decision business leaders strive to get a complete picture of the cost aspects and understand the impact on the business as a whole. But how do they know that? This is where the iceberg comes into play.

When working with prospects and customers to uncover the true cost for them, we found the iceberg to be an educational exercise and a great conversational framework to understand all aspects of business application creation and usage. Different areas in the framework have different owners and they don’t all have the same agenda, e.g. the cost for software developers falls within the IT department, whereas cloud-subscription fees come out of the line of business budget.

Our framework requires input from all areas that DIY touches on. By doing so, it also reveals the mindset and priorities of the different stakeholders and provides insight into the evaluation criteria of the build-versus-buy decision. As such it will be an eye-opener and helps to align all stakeholders.

Conscious Competence Learning Matrix

‘Hidden’ costs impact the tipping point

The hidden or underwater costs play a significant role in determining the tipping point. It’s a matter of simple mathematics. The more you can exclude hidden costs from the equation, the more your decision will lean towards build. This conclusion led us to investigate why one would exclude hidden costs. We found:

The effort to retrieve the hidden cost is too high.

What to do about it: This is fairly easy to mitigate. To find your way out of this impasse, think about using estimates and guesstimates as an alternative to actuals. As long as your data is ‘good enough’, you can still use it to make good decisions. Thus, not creating an exact cost comparison, but a probable comparison.

We don’t want to include hidden costs.

What to do about it: This finding is more of a political and commercial nature. Here it matters who you are talking to. You can imagine that a sales rep who is trying to sell the buy-scenario has an avid interest in having as many costs associated with the build-scenario and vice versa. To overcome this potential conflict of interest, we co-developed the cost comparison model. As a result, we know that all cost elements in the model are relevant to the decision-making. When we encounter a persona saying that a particular cost element is non-retrievable, we have solid arguments to go into challenger mode.

A blend of arguments

We started this blog by explaining that a build-versus-buy decision spans multiple departments and stakeholders, and we gave the financial aspect the most weight when it comes to making the choice. There are certainly other factors that play a role in the decision, such as time to value, feature richness and risk, but ultimately, all of these aspects affect the total cost to build.

For several of our prospects, the co-developed framework has been instrumental in finding an answer when faced with the question Do I Build or Do I Buy?

If you want to find out what other aspects are influencing the build-versus-buy decision, check out our Build-Versus-Buy Guide here.

This article is published in ServiceMax Field Service Digital on June 22nd, 2021

Maximize Virtual Round Tables – behind the scenes

For more than a year now we’ve been having these virtual meetings. We don’t know about you, but virtual triggers mixed feelings within us. On the one hand it is convenient and efficient. On the other hand, we really miss the live interaction and the ability to continue the conversation beyond the scope of a session. So, the biggest ‘reward’ you’ve given us at this year’s Maximize is your level of participation and engagement both during and post sessions. Thank you!

Get up early, stay up late

On the Maximize agenda we offered set of 12 round tables spanning a range from covid implications to asset centric business models. From technician skill profiles to commercial maturity. Yes, we were aware that some of these sessions may have occurred at an early or late time. We noticed that the value of the topic has not held you back to set your alarm clock or delay a meal or two.

In the ‘old days’ we may have continued the conversation over a drink or en-route to a next session. This year you found us on LinkedIn, via your account manager or direct message. The conversation will continue! For those that want to browse topics beyond the 12 round table sessions, do have a look at our blog repository: Field Service Digital.

The reward of preparation

In the days leading up to the round tables we look at the registrations. There’s always an element of hope and surprise. We’ve put a lot of thought in the 12 topics and of course we hope to receive confirmation about our choice. We saw counters going up, quickly, and way beyond numbers we would have during live events. This encourages us and confirms our service ‘compass’.

T minus 15 minutes. We launch our session applications and do a last check. Slides, poll, camera, microphone. Putting a ‘do not disturb’ sign on the door to inform house mates.

Fun fact: I had my son (11 years) colour a sign for me. On the one side it says, ‘knock on the other ‘do not disturb’. Because he created the sign, he felt involved in the new house rules. Few are the occasions when he barges in when I’m in call.

We’re live. Automatically my eye goes to the number of participants. How many people are showing up? Over the course of Covid we’ve seen the percentages varying. Today is a good day. I feel good.

Touching base

In preparation of the roundtable, we’ve created content. More than we can cover in the allotted time. We’ve prepared a dialogue structure. But no matter how much we prepare, we don’t know where participants will direct the conversation. We do anticipate though.

It’s our intention to provide both value and engagement. We do have an expectation, so the first thing we do is touching base. Who is in the call? Knowing that is important, because we understand that value is defined in the eyes of the beholder.

In a world of physical gatherings, I would have done a round of introductions to get a bearing of the group. In a virtual world I resort to a poll, knowing it is harder to put each participant on the spot. Comfort level and technical setup do play a role. The poll is easy and safe.

Engagement

When we chose the topic for the round table, we believe it is an important topic. Registrations and actual participation confirm (or shatter) that belief. The real litmus test is getting engagement.

W ask the first question: “why is commercial maturity important for your organisation and what is its impact?” Those first seconds are ‘killing’. What if nobody responds? What if everybody wants to speak at the same time? How do we give every participant a fair share of attention when we can only see a subset of participants? We wish we could see you all in person. We wish we could see your body language.

We feel a big relief when the flow of the conversation starts going. The discussion becomes a show of examples. We’ve prepared a few to ‘fuel’ the conversation. Ultimately your own examples are the best. Those examples add to the value and practicality.

Value

In the conversation we elevate to 30,000 feet for a broader perspective, only to descend rapidly. We’d like to give you handles you can use tomorrow. The best praise we can get is when you say you have learnt something new and/or you are able to put those handles to use.

Let me give you one example from the Commercial Maturity roundtable. In the poll we asked the participants to assess their current commercial maturity on a scale from low to high. Later we provided a practical handle to compare current service revenue against the maximum obtainable service revenue. The gap between the two may inspire you to re-assess your maturity … or even more powerful, to use the gap to define your compelling reason to act (more about the gap in my next blog ‘Mind the Gap’).

Call to action

Why do we host roundtables? Why do you participate in roundtables? We do hope we can mutually agree that it is because we want to action business issues and challenges. The roundtable is an instrument.

We can imagine that we’ve given you food for thought. We recognise you need to digest. We understand you want to get more information, to compare and involve additional stakeholders. Feel free to reach out and make use of our resources and expertise.

Lief niet zo stoer

Mijn zoon van acht maanden groeit als kool. Vier weken geleden hebben wij voor hem een ‘Stoer’ sweater besteld van leverancier Lief. Behorende tot de standaardcollectie zou deze binnen drie dagen kunnen worden geleverd. Wachtend op een teken van leven van de supply chain of de customer service, heeft mij zoon de volgende maat al weer nodig. Lief is niet zo Stoer.

Wat is hier aan de hand? Het is bekend dat in kledingland de aansturing van de supply chain hoofdzakelijk op een push manier gebeurt: de winkels krijgen eenmalig een vastgesteld assortiment toegestuurd en daar moeten de winkelier en de koper het mee doen.

Wanneer fabrikant en winkelier als extra service nabestellingen van de ‘vaste collecties’ willen aanbieden, dan stuit dit onverhoopt op administratieve en logistieke hobbels. Niet omdat deze zo moeilijk zijn te realiseren, maar omdat er een andere houding nodig is.

Nu verschuilt de winkelier zich achter het (vermeende) onvermogen van de fabrikant om de supply chain te organiseren en wijst de fabrikant naar de winkelier als het gaat om het doen van (vermeende) beloftes aan de klant. Hoe je het ook wendt of keert: de standaard levertijd van x dagen is als afspraak tussen fabrikant en winkelier onvoldoende en transparantie via track & trace van het bestel- en leverproces is niet adequaat.

Vandaag heb ik aan de winkelier gevraagd of de sweater toch maar een maat groter kan zijn. ‘Natuurlijk, geen probleem. Regelen we voor u’, antwoordde de winkelier. ‘Maar ik houd wel een slag om de arm.’

Mijn zoon heeft geen weet van deze perikelen. Zijn vertrouwen in zijn ouders is momenteel oneindig. Konden de ouders dat ook maar zeggen van de winkelier en leverancier. Het is dat de sweater zo Stoer is, de customer service en supply chain vinden wij niet meer zo Lief. Met grote interesse kijk ik uit naar wat er wordt geleverd en wanneer. Ga ik de winkelier en fabrikant betalen voor deze customer service en supply chain prestatie?

Gepubliceerd op SCM Online op 3 juni 2010

An introduction to service management

Introductie in Service management

Wat wordt er onder Service Management verstaan? Hoe kijken klanten en leveranciers aan tegen service? Welke ontwerpbeslissingen kunnen en moeten er gemaakt worden bij de inrichting van de supply chain? Hoe positioneer je de service portfolio in de markt? Welke “key performance indicators” komen er om de hoek kijken?

Deze introductie Servce Management is interessant voor iedereen die wil weten welke wereld er schuil gaat achter het woordje “Service”. Van student tot medewerker, van marketeer tot logisticus.

Deze introductie kunt u downloaden in kleur of zwart/ wit.