Expert Q&A: Rapidly Changing IEM Marketplace Requires New Capabilities
As the industrial equipment manufacturing (IEM) industry rumbles through the remainder of a challenging 2021, headed for a potentially more successful 2022, it’s important to understand the ongoing evolution of the industry and its enterprise technologies. We asked one of Ultra’s most experienced manufacturing consultants, Dave Lechleitner (DL), what IEM companies need to know to thrive in today’s fast-changing marketplace. Here is an edited version of the conversation.
Let’s start with the big picture: What are the most important trends in the industry?
DL: Today, a significant trend is the development and deployment of new service models after the sale. In the past, industrial equipment manufacturers were focused on manufacturing their products. But now, with the ability to leverage machine data streams from embedded sensors, companies can offer strong, data-driven predictive maintenance and service offerings.
Another trend is that IEM organizations are getting creative with pricing models based on usage.
And some companies are pushing hard to engineer and produce smart machines that require less human interaction and monitoring – or none at all – in order to enable lights-out factories.
So, the industry is seeing rapid technologic change – and a corresponding rapid expansion of what is possible for products and services. What are the challenges?
DL: For many companies, it’s a difficult transition from the traditional approach to a new business model. We see organizations that are struggling to move into the future, struggling to adapt their existing systems and struggling to execute the service component efficiently and effectively.
A lot of IEM companies are just coming to understand the impact of the shift from being a product business – where you manufacture and sell the same product over and over again – to being a product-and-service business.
They don’t have a service team or service organization built. They may be contracting the service component to a third party, and are finding that they need to bring it in-house. They need to create conduits to carry the product and part information to the service side, and to carry service insight back to the manufacturing side.
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We saw this with a client recently – a company that builds large, complex products. Its field service people had no product information and no bill of materials, so when they were doing an install, they had no way to know if they had everything they needed or if the customer was getting everything they ordered. And they had no structured way to communicate the issues and problems they found – information that could have been used to improve service quality, product quality and customer satisfaction.
It’s common to have this kind of siloed information. And it’s a challenge to manage, analyze and share it across the organization.
How are IEM ERP solutions adapting to meet these challenges?
DL: Field services management is becoming core in IEM ERP solutions. It used to be a bolt-on, or third-party tool, or the solution didn’t do it very well. No more.
Cloud connectivity is key now, too, because of the need for a real-time link to machine sensors, the need to convey the data streams required to analyze and optimize production, and the need to connect machines in the field with engineers in the office.
Where should IEMs focus their attention for the near future?
DL: In addition to the development of service capabilities and implementation of two-way data conduits, I think, as we talked about, forward-looking, smart organizations will focus on breaking down the silos of information that impede efficiency, impair decision-making and prevent communication and connection.
To succeed in a rapidly changing marketplace, Industrial equipment manufacturers need reliable and complete information, accurate analysis and broad access to data from every part of their organization.
Paul is a global supply chain management expert and manufacturing operations specialist with more than 30 years of experience in leading complex ERP projects in a variety of manufacturing environments.