The rise of servitisation for manufacturers
Engineering giant Rolls Royce pioneered servitisation in 1962 with its Power-by-the-Hour approach to jet engine maintenance management. The service, which allows operators to purchase the power used rather than a complete engine, celebrated its 55th year in 2017 and has proven extremely popular in the aerospace market.
Here, Nick Boughton, digital lead at systems integrator Boulting Technology, discusses what servitisation can offer other industries including high-volume, low-margin manufacturing.
Simply put, servitisation is the trend of selling solutions rather than products. It has been growing in popularity in recent years across sectors such as healthcare, automotive and food processing. By providing solutions, the interests of providers and consumers can become much more closely aligned.
Companies such as Siemens use servitisation as part of their Industry 4.0 offering, drawing data into a cloud platform that the end user subscribes to as part of an as-a-service model. This is a model in which the industrial business receives equipment, such as a motor, for free and is charged for its use as the ‘owner’ monitors the unit remotely and makes sure it runs as efficiently as possible.
Another important element of Industry 4.0 is the ability to apply digitalisation to the production environment by adding more intelligence to existing processes. Plants across a wide range of industry sectors contain an abundance of legacy equipment, which often has no inbuilt means of communicating with other systems.
However, these machines, which can be between 15 and 30 years old, can still perform their main functional tasks successfully. Therefore, a high-volume low margin manufacturer may be unlikely to replace it.
A wealth of ‘black boxes’ are now on the market, which can be installed alongside existing, isolated equipment to integrate it with the network. In addition, software within the system can allow for visualisation of performance metrics, making it easy for plant managers to identify targets for improvements — allowing the system to run more efficiently.
Although many products are now designed with retrofitting in mind, integration with older and even obsolete equipment could still prove challenging. Consulting an experienced systems integrator such as Boulting Technology is one way to research the possibilities and avoid costly downtime during the integration process.
In this way, retrofitted digitalisation and its benefits such as predictive maintenance, asset tracking, condition monitoring and energy measurement can all be delivered as a service.
In the case of predictive maintenance or condition monitoring, the digitalisation of equipment as a service allows for maintenance engineers to focus on looking after their existing equipment, with no additional concerns. They can benefit directly from the service, through accessing data that can be fed into their own individual maintenance schedules.
A traditional maintenance structure requires engineers to become familiar with all equipment in a plant, organising maintenance around their own schedules as much as production regimes. Often, a lack of manpower during busy times can lead to less-crucial machinery becoming neglected, which could be detrimental to the plant’s performance.
Even with remote monitoring, starting over with a brand-new maintenance plan can be a time consuming and difficult task. A detailed survey, such as Boulting’s BRISK survey, can provide a traffic-light system, which gives plants a risk profile for each piece of equipment. This can be an invaluable starting point when planning a risk-based maintenance strategy.
The offer of services such as maintenance, or digitalisation through retrofitting, to manufacturers who may not have the budget to otherwise invest in industry 4.0, could be the perfect answer for plant managers, particularly within low margin high volume sectors such as food and beverage.
A plant manager needs their equipment to work effectively and efficiently, reducing its chance of unplanned breakdowns and profit loss through energy wastage. This same plant manager doesn’t mind how these goals are achieved, for the most part, they just need to be reassured that necessary work will be carried out within budget, in the most effective manner.
Other discussions are often necessary but are ultimately a fact-finding exercise to meet these objectives in the best way. Manufacturers of production equipment must recognise that their product is a platform to produce a service.
With the servitisation model, the same plant manager can purchase transportation, electricity or power, as with Rolls Royce’s customers, rather than a motor, conveyor, generator or jet engine. The model means it is no longer the client’s responsibility to ensure the final product is delivered, whether this is power, transportation or electricity.
Servitisation is a growing area that many manufacturers, particularly within the high volume, low margin sector, could benefit from. Similarly, digitalisation of legacy equipment can connect machinery to the network and bring about the benefits of industry 4.0. In addition, it can provide a wealth of data that can be fed back to predictive maintenance schedules.
With a manageable monthly budget, engineers can use data produced to avoid downtime, which is extremely costly for high volume low margin manufacturers and the aerospace industry alike.
The author of this blog is Nick Boughton, digital lead at systems integrator Boulting Technology