How digital models help increase service revenue

For many machinery and plant manufacturers, the after-sales sector often accounts for around 25 percent of sales, but usually contributes more to profits in percentage terms. An increase in service revenues is therefore a stabilizing factor, especially in the current dynamic market situation. The panel of experts at the mechanical engineering summit salon discussed digital concepts that have proven to be service boosters. But it was also about solutions for the typical hurdles that many machinery and plant manufacturers face today. First and foremost are the questions of a cultural change and the focus on solving not just technical but customer issues - and accessing the right data from the machine's lifecycle.

"It is very clear from the events on the topic of service that there is huge interest," stated Ghebrekedus Ashera, service and project management consultant at VDMA e. V. Especially in the wake of a shortage of skilled workers and generational change, the willingness to engage with digital services has increased.

Organization and corporate culture as core factors

"We transformed our service into its own business unit with profit and loss responsibility years ago. This has brought us into discussions with other business units on an equal footing within the company, and we can develop and implement our own service strategies and changes much more easily," explained Jochen Pfeil, head of the service business unit at Vecoplan AG. The machinery and plant manufacturer, with 500 employees, produces shredding machines for the recycling and wood industries and generates more than 30 percent of its sales from service. Another factor is consistently focusing on proactive service business. At Vecoplan, there is an independent sales department for machines, and the aftersales area is exclusively responsible for spare and wear parts.

To design the digital service globally uniform yet customer-oriented, simplicity and standards are key, explained Lukas Neuenhausen, project manager digital engineering at Albrecht Bäumer GmbH & Co. KG. The company, with 400 employees, specializes in machinery for the foam industry and produces over 50 different active machine types for various purposes, including cutting. "Every machine is delivered with a router as standard so that we can always access it everywhere: there is only this one way. The second important aspect is simplicity: if it's not super simple, then all the subsidiary organizations won't keep up. That's why everyone has exactly the same path and is centrally trained," Neuenhausen described the approach. Because if it becomes too complicated due to alternative paths, the processes can no longer be unified worldwide.

No success without a fundamental change in mentality

The discussion also addressed why the machinery and plant engineering sector seems to struggle to develop viable business models from the digitization of its products. The participants agreed that the necessary change in mindset is one of the central hurdles. According to Lukas Neuenhausen, in a rather mechanically oriented organization, it is difficult, for example, to charge for software - the change in mentality often does not work well. To achieve this, the transformation from a product provider, keyword steel and iron, to a solution provider through change management is a necessary prerequisite, stated Donatus Weber, managing director of Jagenberg Digital Solutions GmbH. "That means I engage in conversation with my customers and see how I solve their production problems. In my opinion, we have often made the mistake of not listening closely," said Weber. Instead, more and more technical innovations are incorporated into the product.

"In some cases, the service lacks the qualifications needed to appropriately query customer needs. The main focus is on repairing the machine, while business knowledge, marketing, and business model development are less pronounced," noted Ghebrekedus Ashera. Although the service manager knows the customer needs, this valuable information must also flow back into the process to understand how to approach the entire product lifecycle. "Many companies are already working on this and are placing someone alongside the service who knows these business connections," said Ashera. But this does not happen overnight. To gain this basic understanding within the company, one must actively work on it and stay on it, believes Jochen Pfeil. "Because if this mindset change doesn't happen, it won't succeed. But as soon as you notice that you have some success with it and can offer the customer added value, then the bridges fall, and it moves forward step by step," reported the service manager from his practical experience.

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Instead of higher, faster, further, better understand the customer process

Everyone in the group agreed: understanding the processes at the customer is crucial. From Lukas Schattenberg's perspective, it is first necessary to collect data from the actual use of the machine in the field and thus check one's own understanding of innovation: "In some cases, it becomes apparent that none of the customers have ever driven the machine to its maximum performance limit. Once I know something like that, I can then package service offerings that truly meet the customer's needs - and not make a false promise of innovation to produce an even more powerful machine." Getting the data on how a machine is actually used will be essential for German mechanical engineering in the coming years.

"Not every customer uses their machine the same way, as a machine builder typically supplies a very heterogeneous field of customers. Therefore, not every digital service can be sold equally well to every customer: I need to know very precisely how the customer produces," said Schattenberg. The most important KPIs from his experience are: better quality in production, higher performance, and higher availability of the machine. For digital services to work, providers must make their customers' KPIs more efficient, the experts are sure - especially the overall equipment effectiveness (OEE). But how do you best access the data needed for this?

The path to field data

"We simply sold a one-year subscription with the machine as standard over several years. This means the customer already had a data connection from the start. That was very, very enlightening for us," Neuenhausen describes his company's successful approach. This includes not only looking at one's own machine but also, for example, how and what material is used or how waste can be avoided. From a sustainability perspective, there is a very large lever for customers with foam - every centimeter saved is worth a lot of money. But OEE is definitely the most important parameter. Donatus Weber advised collecting data not randomly, but based on a specific use case. For customers, it is less about graphical visualization, for example in the form of traffic lights, and more about concrete action recommendations.

It is an important advantage if you can tell the customer, for example, with a shredding machine, when the cutting tools are no longer sharp-edged and need to be replaced, Jochen Pfeil explained. But to get to this point, a learning curve had to be completed. Among other things, a lot of machine data was collected over two or three years. "Is this going in the direction of shop floor consulting in service?" moderator and production editor-in-chief Claus Wilk wanted to know. Weber confirmed: A key point is a holistic approach, where not only the isolated process on one's own machine is the focus, but the entire process that happens in the customer's production before and after. He cited as an example products related to cutting, winding, and coating plastic film. "Here it is important to engage in conversation with the producers who are upstream and downstream, to provide each other with data as manufacturers, so that the entire line can be optimized," Weber explained. Ultimately, the customer is not interested in the locally optimized maximum in a machine, but in the overall result.

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Concrete added values convince the customers

Above all, the advantages of digital services are convincing: "If the customer has a benefit, then they are also open to allowing access to the machine," said Pfeil. For example, the emergency service can connect directly to the machine in the event of a failure and search for the problem. "We succeed in 80 percent of the cases - and this is an empirical value over the last few years - in at least getting the customer back to the point where the system and machine are temporarily running again," said the service manager. In some cases, customers are already ahead of the manufacturers. Here, experts advise working together with these customers on solutions and learning from their momentum.

Added value can also be achieved through AI technology. The group saw AI primarily as a tool for support and simplification in service. "The service technician who does not use AI will be replaced by a service technician who uses AI," Weber summarized. "We asked ourselves how to use all the knowledge, some of which is handwritten in service reports, to provide customers with 'help for self-help' via AI on a platform," reported Jochen Pfeil. At Albrecht Bäumer, AI is mostly seen at the HMI for operational support. "The operator, for example, no longer has to search through the 700 pages of the operating manual for an answer but simply enters their question via voice control," explained Lukas Neuenhausen. The technology is also being tested for formulating a machine order.

revised by: Dietmar Poll