Achieving digital service excellence in three steps

The benefits of a strong service offering

Service is an anchor of stability in the machinery and plant engineering sector during times of global crises. After-sales revenues are less susceptible to external developments and economic fluctuations compared to new plant business. Additionally, their higher profit margins stabilize companies’ cash flows and mitigate risks. Moreover, an attractive service offering provides a clear competitive advantage in global markets.

According to McKinsey, customers can expect a longer product lifespan from manufacturers with corresponding maintenance contracts since no one knows the equipment better than the manufacturers themselves. Regular after-sales touchpoints deepen customer relationships and offer recurring sales opportunities, making it easier for machinery and plant manufacturers to understand their customers’ problems and resolve them with the appropriate service offerings.

The 2020 Customer Service Benchmark by the German Mechanical Engineering Industry Association (VDMA) shows that many companies in the machinery and plant engineering sector have recognized these opportunities and are expanding their services. While at the time of the last major VDMA study on this topic four years ago, only about 61% of companies offered maintenance contracts and generated around 20% of their revenue from services, an increase in these values ​​can be expected in the next survey.

This places us in the midst of a market development that will accelerate in the coming years. Technological progress also contributes to this: the Industrial Internet of Things (IIoT) allows service business to be optimized on a customer-specific basis using data from the product’s operation.

In the future, it will become more important but also easier for machinery and plant manufacturers to increase the maturity level of their service. The following maturity model helps you assess where your company stands on the road to service excellence.

A Maturity Model for Service

Companies with low service maturity handle customer inquiries exclusively reactively. Such processes take a long time because they are still partly processed with paper forms, and searching for the required information is a tedious routine activity that does not generate value. If inquiries via email or phone are not digitally collected, this complicates the structured and prompt processing of service cases. In the worst scenario, inquiries get lost in email inboxes or remain unprocessed during an employee’s vacation because no one has insight into the current status of communication.

Digital Service Management

Digitalizing service processes is the first step to increasing internal efficiency. Companies can use a CMS (Customer Service Management) tool to manage delivered products. Services are planned and documented digitally, resulting in a service logbook for each customer and asset. Incoming customer inquiries via email or telephone are automatically converted into tickets internally and then systematically processed.

Only once service processes can be handled efficiently is it worth building up the after-sales volume. Therefore, the digitalization of internal processes is the basis for the transition from reactive to proactive service business. For example, by offering standardized service contracts with regular maintenance for sold equipment.

Connectivity & Automation

The next step for machinery and plant manufacturers is to develop their products into smart products that transmit selected operating data. In the past, there were concerns about the feasibility of this approach because providing this data depends on the customer giving his consent. However, more and more plant operators are now willing to do so. McKinsey has validated this trend in a survey and identified two significant factors:

  • B2C customer experiences lead to increased expectations for service experiences
  • Positive experiences with IoT-based remote services during COVID-19

Plant operators are generally motivated to share information with the manufacturer when the added value is tangible, for example, in the form of cheaper maintenance contracts and the promise of higher availability. Manufacturers can achieve this by using operating data to introduce usage-based maintenance strategies instead of following calendar-based maintenance cycles. This results in fewer services per plant and reduces overall costs. Furthermore, software can detect suspicious patterns in operating data early on and automatically initiate preventive measures based on rules.

Customer Integration

Companies with high service maturity integrate their customers into their business processes via a customer portal. Such a portal is the centerpiece of a modern service experience and strengthens customer loyalty. It enables customers to view their purchased products along with their operating data and the service logbook for each asset. An overview of past and planned services provides planning security and streamlines scheduling between the manufacturer and operator. A ticket system allows customers to submit new requests, track their processing status, and respond to corresponding inquiries directly in the system without the need for a service employee to answer phone calls and manually convert them into tickets. Additional services such as spare parts orders or trainings can also be requested through the customer portal, which streamlines and accelerates the sales process.

Conclusion

A strong service business has positive effects on cash flow, minimizes entrepreneurial risks, and simultaneously strengthens customer experience. How this is best achieved depends on the current situation in customer service, the company’s products, and the offering of the competitors and is unique for each company. Blueprints such as the maturity model described here provide guidance and enable a quick assessment of how excellent service can be realized step by step with the technologies available on the market.

CONTACT Elements for IoT helps your team effortlessly manage the increasing number of customer inquiries while enhancing the efficiency of your service department.

MES and MOM – A clarification of terms

Digitalization in manufacturing

Production is one of the most heavily optimized industrial sectors, and for good reason. Avoidable scrap or machine downtimes not only consume time and nerves but, above all, a significant amount of money. To prevent this, companies organize use digital systems to organize and execute their manufacturing processes. For this purpose, they often rely on Manufacturing Execution Systems (MES). Recently, another term has gained increased attention: Manufacturing Operations Management, abbreviated as MOM.

This blog post explains how MES and MOM are related and what to consider when choosing an MES.

What is MES?

MES is software that helps manufacturing companies organize their production. Initially, sales planning is carried out and corresponding production orders are created in the Enterprise Resource Planning (ERP) system. Subsequently, the production department uses the MES to execute these orders.

In the MES, it is determined who will execute which production order and which resources and tools they will use. During production, employees manually enter operational data into the system and therefore supplement the automatically collected data from machine controls and sensors. To ensure product quality, the MES enables planning and documentation of quality inspections.

The MES thus creates transparency within the production department. Finally, employees report completed orders back to the ERP system, triggering logistical and commercial follow-up processes.

What is MOM?

Manufacturing Operations Management (MOM) is a holistic concept with the goal of optimizing the overall value chain process. Companies achieve this by digitally managing their manufacturing processes and transparently providing manufacturing-related information across multiple departments. Production processes are considered an integral part of cross-departmental business processes. To ensure seamless communication from the manufacturing to the management level, information exchange between different IT system domains is essential. This includes, for example:

  • Product Lifecycle Management (PLM) for product development and planning work steps in production,
  • Enterprise Resource Planning (ERP) for sales planning and commercial order processing,
  • Manufacturing Execution Systems (MES) for executing production orders,
  • Quality Management Software (QMS) to ensure product quality,
  • Industrial Internet of Things (IIoT) platform to consolidate data from machine controls and sensors and monitor manufacturing processes in real-time.

The interaction of IT systems makes collaborating between different departments and teams more efficient, positively impacting the entire value chain process. Production operates at lower manufacturing costs and can ensure shorter delivery times and high product quality. By integrating production processes into the overall value chain process through the holistic MOM approach, companies can adapt quickly and flexibly to changing market situations.

How do MES and MOM differ?

MES is an important component of the MOM approach. As shopfloor software, it primarily focuses on executing tasks and processes within production. MOM, on the other hand, describes the overarching concept that integrates production processes into the business processes of the overall value chain. The approach aims to optimize the value chain by coordinating information across various departments. The concept includes not only the execution level (MES functions) but also adjacent functions from areas such as ERP, PLM, QMS, and IIoT.

What to consider when choosing an MES?

The challenge in selecting MES software is ensuring that it fits the company’s manufacturing structure and corresponding needs. For example, process manufacturing often requires recipe management, while discrete manufacturing involves working with bills of materials.

Furthermore, it is crucial to focus on the seamless integration of the system into the current IT infrastructure, encompassing elements such as PLM, ERP, QMS, and IIoT platforms. Following the MOM approach, maintaining cross-departmental information consistency significantly improves overall efficiency.

Companies should consider the following aspects:

  • Expandability
    Depending on the project scope, initially rolling out some basic MES functions minimizes project risks. Subsequently, it is possible to gradually add further functional areas until all relevant processes are integrated. For this approach, a modular software that grows step by step with the company’s needs is recommended.
  • Scalability
    In addition to the functional expansion of an MES to cover more areas, it is relevant whether the solution can scale to all manufacturing locations. This requires support for the relevant languages and the ability to centrally consolidate and analyze local information. Ultimately, the MES provider must also be able to conduct implementation projects on a global scale.
  • Customizability
    Production processes are as individual as the manufactured products. The better the MES supports the company’s processes and information needs, the greater the benefit.
  • Future-proofness
    The economic resilience of the MES provider and their affinity to integrating new technologies, such as IIoT and artificial intelligence (AI), are crucial factors for the system’s long-term development.
  • User Experience (UX)
    If the software is intuitive and well-designed, it avoids acceptance issues and the need for extensive training measures. The most feature-rich system might be worthless if end users do not use it correctly.

If you are looking for an MES for discrete manufacturing and want to follow the MOM approach, CONTACT Elements for IoT could be the right solution for you. This holistic manufacturing management system combines traditional MES functions with advanced maintenance management, energy monitoring, and seamless IT integration. The result: cost savings through reduced scrap and downtime and the integration of manufacturing into the overall value chain process. Learn more about CONTACT’s IoT offering.

Numbers, please! Energy efficiency is measurable

Energy is cheapest and most environmentally friendly if we do not consume it in the first place. Therefore, energy efficiency makes a significant contribution to the energy transition, and we have already tapped into savings potential in many areas: LEDs are now standard and energy-intensive devices like old refrigerators or water heaters have either been replaced or switched off. At CONTACT, we have initiated a project to optimize energy efficiency in office buildings. It is surprising how much saving potential still exists, even though employees are already conscientious in their resource usage. By replacing electrical devices and air conditioning in the server room, as well as turning off and merging old servers, energy consumption has been reduced by 50 %. This is not only ecologically sensible but also economically beneficial. A lot can be achieved with little effort, provided consumption data can be logged and visualized.

Energy efficiency is not possible without software

The German government’s report on “Energy Efficiency in Numbers” provides an overview of the final energy consumption in Germany for sectors such as industry, transportation, private households, and commerce/trade/services.

Nearly a third of Germany’s final energy consumption comes from industrial processes. To achieve efficiency improvements here, it is essential to examine them more closely. A significant portion of energy (about two-thirds) is attributed to process heat, which is used, for example, in the production of products. To identify which facilities and machines in the production hall have saving potential, monitoring and controlling are necessary. Our software platform, Elements for IoT, provides companies with the ability to monitor, graphically represent, and analyze their consumption data. Data from metering points, such as those measuring power consumption, can be assigned to individual machines and production processes. Additionally, it is possible to process sensor values and machine control states and merge them into a digital twin of the machine. For the specific requirements of energy management, we have developed a new module that represents a continuous improvement process of energy performance indicators (according to ISO 50001). Starting from energy consumption, broken down by different energy types such as electricity or compressed air for a machine on the shopfloor, consumption values can be calculated down to a manufactured unit of the product. This also provides the opportunity to calculate the CO2 footprint of the manufactured product. The following example of a dashboard for a production facility shows a summary of a shift and provides information on energy consumption for the production process, as well as the average consumption for each manufactured unit from that shift.

Energy efficiency in production

Energy performance indicators can be used in various ways and are particularly important for audits according to ISO 50001. These audits require proof of a continuous improvement process. In addition to implementing sustainability concepts, this simultaneously saves resources such as electricity or gas.

Furthermore, energy information can be used to calculate the CO2 footprint, which can then be exchanged across supply chains. In the context of this data exchange, we implement the concept of the Asset Administration Shell to integrate the submodel for the CO2 footprint into our IoT platform.

Energy consumption data can also be useful in the manufacturing industry to optimize production processes. By assigning energy consumption data to the processes happening simultaneously, analyses show which sections are particularly energy intensive. Often, the usual metering interval of 15 minutes is not sufficient and higher time resolution data is required. Smart meters allow for sampling rates in the minutes or even seconds range, facilitating analyses that help optimize production processes.

AI-based forecasts for energy consumption

Interestingly, machines on the shopfloor are often found in standby mode, waiting for the next production order, even when there are no orders for the next few hours or the upcoming weekend. Optimized machine shutdowns which consider ramp-up times can directly save energy costs. A specific example of this is the implementation of an alarm mechanism that informs machine operators based on planned tool changes, services, or manufacturing orders about when it is advisable to shut down the machine. Additionally, the machine dashboard displays when the next order is due. Historical data studies have shown that for machines equipped this way, electricity cost savings can amount to about 23%. In the dashboard shown below, the shutdown recommendation is visualized by the red traffic light. It also indicates by how many kilowatt-hours the predicted value deviates from the actual measured power consumption.

The forecast of electricity consumption is based on decision trees and directly implemented in the platform. Consumption data is accessed through the digital twin of the machine. The forecast’s inference model uses data from planned manufacturing orders, including time data and information on the material to be produced, to calculate the expected electricity consumption in kilowatt-hours. If the actual measured value deviates from the forecast by a fixed limit, the system informs the responsible person(s) with a red traffic light on the dashboard.

Furthermore, peak management uses forecasts to avoid load peaks. If multiple machines or systems are in operation simultaneously at a production site, this can lead to overlapping peaks in energy demand, resulting in higher fees. Based on forecasts of the electricity consumption, it is often possible to optimize execution times and machine occupancy to evenly distribute energy consumption and prevent expensive penalty payments.