Realising the value of the service supply chain

Digital service supply chains are key to enabling original equipment manufacturers to provide successful customer experiences

Leslie Paulson
By Leslie Paulson on 14 February 2022
Realising the value of the service supply chain

Ingrained in original equipment manufacturer (OEM) management teams is the need to streamline and improve the efficiency of the engineering and manufacturing life cycles.

The focus is well-placed when it leads to well-designed manufacturing products that exceed customers’ expectations. However, many of these teams overlook a bigger opportunity: the service life cycle.

A well-designed, well-manufactured product will last many years, or even decades. There is a lot of revenue and high profitability within reach if the OEM can capitalise on the potential of the service life cycle. One example shows that for every dollar in equipment sales, an OEM can experience up to $12 in the sale of service.

It’s challenging to deliver service for years or decades successfully. It requires an optimised service supply chain. Fortunately, digital technologies can facilitate this optimisation if appropriately employed.

Early adopter OEMs created service life cycle management programs, but these are now outdated, with siloed applications as a result. Digital thread programs leveraging exponential technologies are a more contemporary alternative as they capture and organise data and make it available to the entire enterprise spanning engineering, manufacturing and service.

The digital thread has never been more important. Customers demand more from the products and services they use. This evolution in customer demand drives ubiquitous market demand for asset uptime and availability. For an operator, always having the right asset for the job is extremely valuable. The single greatest leading indicator for a customer to repeat purchase is the answer to this simple question: when the asset required service, did it get fixed the first time? 

The rich data from the digital thread helps OEMs maximise equipment uptime, utilisation and availability. It’s such a competitive market, OEMs must deliver on their SLAs or risk brand equity bankruptcy. 

There is a lot of technology available today to improve service delivery. An organisation can have up-to-date and accurate product information, access to real-time or near real-time product utilisation data, and utilise augmented reality for expert on-site repair procedures. But there is one unmistakable aspect to service delivery, having the right service parts in the right place at the right time. Without it, all the other technology investments are for naught!

The service parts supply chain is an excellent example of how a digital thread strengthens with more and better data including, historical, current and predictive data. The more signals that the algorithms have, the better the forecasts, the better the optimisation, and the better the planning, which leads to maximised asset uptime and readiness. Better yet, service parts extend the asset’s usable life, which unlocks enormous revenue and profit potential.

An optimised service supply chain also has a dramatic effect on sustainability. First and foremost, technology helps make better decisions for which parts to manufacture. Technology streamlines processes, too, including repair, rework and remanufacture, which extends the life of the asset. 

Boeing Global Services is a leading-edge example of the digital thread strengthened by sophisticated service parts optimisation. 

Boeing is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defence systems. Boeing Global Services, the entity within Boeing responsible for aftermarket support, is a well-respected industry leader with 23,500 people in 300 facilities across 70 countries.

It set the service bar very high for every customer. Its assets, comprised of hundreds of thousands of parts, operate in highly variable conditions and live a very long time. Their supply chain environment has highly regulated parts, long lead times, and very long asset life, which adds to the complexity of their service parts supply chain. To get the highest service levels at the lowest costs, Boeing Global Services standardised on Servigistics.

With Servigistics as a foundation, Boeing set out to gather and organise all relevant enterprise data to maximise the value of Servigistics.

With the expert guidance of Capgemini, Boeing Global Services embarked on an intense 12-week process to create a data planning layer. The project aimed to capture a robust variety of data inputs upstream to support supply chain planning decisions with less customisation downstream.

All the service parts data is invaluable to the broader organisation for sales, inventory and operations planning. Better understanding what’s breaking and where helps Boeing meet its customer commitments.

This is just one example of how Boeing Global Services is building a digital thread with an integrated flow of data, improving communication and collaboration among sites across the enterprise. A powerful digital thread should break down silos within the enterprise and lead to maximum equipment uptime and delighted customers.

The digital thread can unlock tremendous value in the service life cycle. Regardless of where a business starts, with the pace of innovation and accelerated modernisation, the best time to get started is now.

Leslie Paulson is general manager of Servigistics Business Unit at PTC

This article was originally published in the Winter 21/22 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.

Number of views (1573)/Comments (-)

Comments are only visible to subscribers.

Theme picker