The Uptime Blog
The 4th Asia Pacific Airline & Aerospace MRO & Operations IT Conference, organized by Aircraft Commerce, took place in Bangkok, Thailand this week.
Attending the conference were mid-to high-level managers from airlines and MROs in Asia with about 30 solution vendors vying for their attention (and future IT budgets). Conspicuous in their absence were delegates from the largest airlines in the continent – the Chinese – but this did not seem to impact the lively atmosphere in both the conference rooms and the exhibition space.
The mobility “buzz” dominated the conference proceedings, with EFBs (Electronic Flight Bags) leading the pack. I counted no less than six presentations with the words “EFB” or “iPad” appearing in the speaker summary notes. The proponents of mobile solutions also made sure they were creating a parallel “buzz” on the LinkedIn group “Aviation Service Lifecycle Management” by commenting to each other about the greatness of mobility in the cockpit. Given all this background noise, a visitor from Mars sitting in the conference ballroom would surely have reached the conclusion that the aviation industry is obsessed with one topic only: how to put iPads in the hands of pilots, and fast.
But if one were to turn from this hypothetical Martian in the conference room to an even more hypothetical fly on the wall in the exhibition room, the conclusion would have been markedly different.
When the managers and executives of the airlines actually sat down for serious discussions with each other and with the IT vendors, the issues that came up were very far from the “sexy” image of pilots in crisp uniforms holding an iPad in one hand and navigating the airplane with the other. The issues discussed were, alas, more mundane and down-to-earth: how to make maintenance mechanics more efficient, how to reduce unnecessary overhead in maintenance operations and how to make the multiple MRO IT systems work together in an integrated environment. As one sober industry executive put it recently: “The iPad is a basic, consumer product with limited built-in connectivity and content upload capability. It was never designed to be used in an aircraft environment and is not manufactured with aircraft-grade components. It is a consumer device, not an aircraft device”.
So it was encouraging to see IT and M&E managers sitting down for serious evaluation of the solutions available on the market. The hard times that have been hitting this industry for the past few years have helped introduce some rationalization in the airlines’ approach to MRO IT solutions. We no longer see extreme approaches to IT projects, with some airlines embarking on ambitious, all-encompassing, paradigm-shifting, multi-million dollar projects, with other airlines sitting on the sidelines and doing nothing for fear of change. It seems the approach today is more focused on achieving tangible results for a reasonable investment.
A welcome new vendor on the exhibition floor this year was Enigma’s partner, Oracle, offering their cMRO solution. Mr. Sook Hyun Cho, leader of the MRO ERP project at Korean Air gave a keynote case study presentation of the implementation of cMRO and Enigma’s InService MRO at the airline’s M&E organization, a project that went live almost two years ago. Mr. Cho highlighted the tight integration between the Oracle and Enigma systems, enabling KAL engineers to generate thousands of job cards daily. He stated KAL has met its project goals and can already boast efficiency improvements in MRO operations.
Kudos to Aircraft Commerce for organizing another successful Asia Pacific event.
Tags: Electronic parts catalogs, Bobcat, Dallas Area Rapid Transit, InService EPC, Enigma, dvautier, diane vautier, manufacturing, missing middle, OEM, midsize manufacturing, Ditch Witch, Toshiba America Medical Systems
If you’re a manufacturing company with over 500 employees, you’re not the middle. If you’re a single man shop with local customers only, you’re probably not the middle either. But if you’re somewhere in between, then you’re one of many that makeup the supply chain backbone that feeds the large OEMs. Collectively you represent more than twice the global employment of big name manufacturers. This bulging mid-section of the manufacturing world is what has been dubbed the missing middle.
“Being in the middle”, as the phrase suggests, comes with its own set of unique challenges and pressures. There is a gap between what is expected from this group of manufacturers and what they’re capable of delivering. They’ve become overlooked and under-resourced.
The Manufacturing Institute website says, “The United States funds and conducts extensive basic research and possesses the manufacturing base to commercialize products, but lacks the development, engineering, and prototyping assets that enables ideas to move from mind to market.”
Changing R&D Responsibility – pushing innovation downward
Big manufacturers used to lead innovation. They were idea generators, research and developers (R&D) and leaders of change. In the early 1980’s big companies contributed vast amounts to R&D investments. Today, their contribution appears paltry by comparison. “In the past 30 years, R&D investment in the larger companies has plummeted — from 72 percent of total in 1981 to 40 percent in 2007” cites Jon Riley & Matt Sakey of National Center for Manufacturing Sciences (NCMS) in a joint report by Digital Manufacturing Report and NCMS.
So where did innovation go? The middle.
More and more mid-size manufacturers have taken on the responsibility that big OEMs used to own. “Developmentally, 60 percent of R&D investment comes from the missing middle — up more than 40 percent since 1983” say Riley and Sakey. That’s a huge shift of time, resources and investment, and one that only the most fiscally sound manufacturers are poised to support. As many mid-size manufacturers are struggling with their new ‘innovation’ job description, they’re still contending with other more day-to-day economic pressures in order to survive.
Economic Challenges – first to get hit, last to recover
The missing middle of manufacturing is getting uncomfortably squeezed from all sides. Over and above shifting innovation responsibilities, a faltering economy has added even more pressure.
“Small to midsize manufacturers are often hurt early during economic downturn because they tend to have limited resilience: limited cash reserves and access to credit, few customers, and limited product portfolios and inventory. For the same reasons, small to midsize manufacturers also take longer to recover” says Joe Barkai, Analyst and Practice Director for Product Lifecycle Strategies for IDC Manufacturing Insights.
Is Technology the Answer?
Technology shines like a bright spot in a dismal sky. It can help midsize manufacturers find sure footing in an otherwise rocky middle landscape. NCMS’s Riley and Sakey believe that digital manufacturing – a computer based system of integrated manufacturing, modeling & simulation is the path to success. “Those companies that do not leverage this technology [digital manufacturing] will take longer to design more at greater cost and with less guarantee of success.” From Enigma’s perspective, we agree but on a much broader scale. Any integration of technology that improves an OEM’s manufacture, service and support leads to healthy competitive advantage.
As a software developer of an electronic parts catalog (EPC), Enigma has seen the impact first-hand, of technology on our own ‘middle’ OEM customers. As the demands of midsize manufacturing become more stringent, the power of software to maximize operational efficiency as well as aftermarket parts, service and repair becomes a fundamental imperative. InService EPC is a textbook case of how midsize OEMs can leverage their existing product, parts and service information to improve aftermarket efficiency and profits.
Enigma InService EPC has proven itself across industries. We’ve helped construction equipment manufacturers like DitchWitch and Bobcat as well as medical equipment manufacturers Toshiba America Medical Systems and public transportation like Dallas Area Rapid Transit (DART) leverage their parts and service content and integrate with in-house business systems to reduce cost and improve customer support.
We believe InService EPC is the best first step for the “missing middle” to apply technology because it uses information that already exists to enhance the most profitable part of a company’s business—the aftermarket. By extracting new value from existing resources, the missing middle will make room for more innovation and accelerate response to ongoing customer demands.
Previous posts have highlighted the fact that autos are aging and that there is stiff competition to properly maintain those senior citizen vehicles and keep them on the road. But what on earth does that have to do with the Medical Devices Industry? You may be surprised.
How Cars are like CAT Scan Machines
According to a recent press release by Global Industry Analysts, Inc., (GIA) the recessionary forces that have extended road life for automotive vehicles are exerting the same kind of pressure on the healthcare industry.
“With most medical equipment and systems, in particular medical imaging equipment, being capital intensive investments, tight liquidity, reduced credit availability, capital shortages, and high borrowing rates triggered by the recession forced hospitals and healthcare facilities to reduce capital expenditures on new equipment.”
The GIA report also goes on to say that “… the market witnessed a sudden spurt in demand for the servicing of older equipment.”
That means that hospitals and healthcare organizations are doing exactly what car owners are doing; they’re keeping their car (or in this case medical equipment) longer and relying on service providers to prolong the life of their X-ray, Ultrasound, CAT, MRI, PET Scanners and other medical devices.
Lost and Found Revenue
Because hospitals are fixing rather than buying new medical equipment, manufacturers are losing revenue and are looking for new ways to replace the lost income.
As the Automotive industry has shown, one logical place to find new revenue is in the aftermarket service (and parts) for their cars. Therefore, as medical equipment OEMs look for new business they may find that offering extended service and parts contracts is a good place to start.
But Who Will Get the Service Contracts?
Traditionally, medical equipment OEMs provided 60% of the aftermarket service of their equipment. But lessons from the auto industry’s battle for aftermarket parts and service dollars may provide some insight for ways to improve those numbers.
Regularly automotive OEMs see a sharp decline following the end of the car warranty when customers take their service and repair work to independent repair facilities (IRFs) rather than continue the dealer relationship.
Although medical device OEMs enjoy higher aftermarket service retention rates, they can still expect keen pressure from Independent Service Organizations (ISOs) and in-house Clinical Engineering Departments. ISOs and hospitals are both expanding their service offerings to aggressively bid for some of those maintenance and repair funds.
Consequently, much like the auto OEMs, medical equipment OEMs will have to step up their game and fight harder. In the auto industry OEMs have increased efforts to make it easier for dealers to do business with them and to purchase from them – key elements in dealer loyalty. Dealers in turn, with the help of their OEMs, are working harder to retain the customer’s service business after the warranty ends.
In the medical devices field, similar efforts will most likely be aimed at end users themselves – the hospitals that actually purchased the device – with the hope that better equipment support translates into higher loyalty, which turns into increased parts and service revenue.
A Common Tool
One tool that helps both automotive aftermarket and medical device OEMs nurture their dealer and/or client relationship is an integrated electronics parts catalogs such as Enigma InService EPC. InService EPC helps service technicians (like those of Enigma customer Toshiba America Medical Systems) be more prepared on site with access to all equipment diagnostic information, parts and assembly illustrations, maintenance procedures, parts availability and price, as well as technical instruction, technical service bulletins and even sales brochures. And because the system can be deployed via web to laptops, desktops, mobile devices such as iPads, tablets or even smart phones or traditional paper, it becomes an indispensable tool for field service technicians to have on hand.
So, even though cars don’t exactly look like CAT Scan Machines, we think there is well-founded cause for comparison. Medical device OEMs can learn much from their automotive OEM counterparts.
Every day field service technicians and mechanics are charged with the critical task of keeping things running. That includes everything from heavy duty construction equipment and farming vehicles to high tech thermal processing equipment for the semi-conductor industry or even the most precise of medical devices like CAT scan machines.
It all has to work, all the time.
But overall equipment effectiveness isn’t the sole concern of the field technician alone. Uptime impacts three main stakeholders:
• the customer using the machinery
• the field technician fixing the machinery
• the company dispatching the field technician whether that’s the OEM or dealer
Field Service in a Perfect World and the Real World
In a perfect world equipment downtime wouldn’t be an issue. Equipment would seldom fail, and if on a rare occasion it did malfunction, downtime would be minimal. Field technicians would know the exacting details of each machine in their charge, remember all the part numbers and assembly combinations off the top of their heads, have the know-how to diagnose every function, be able to immediately order the right parts and then repair the machinery on the first try. Perfect and simple.
Unfortunately, we don’t live in a perfect world. In our imperfect real world, equipment goes down just when it’s most needed. New technicians don’t know the equipment as well as they should, part numbers change or are replaced, assemblies are redesigned, newer models didn’t come with field service training, service bulletins didn’t get distributed, part ordering is a multi-step process of calling the shop, having the counter rep research it, find it and order it, and then wait for its arrival, not really knowing if it actually is the right part or not. Quite often this all ends in multiple service calls, extended equipment downtime, costly service operations and a pretty angry customer.
Success Relies on the Field Technician or Mechanic
The pivotal point for all concerned is how well the field service technician/mechanic performs. For the machine owners, it’s essential to keeping income-producing equipment operational.
For the service provider (OEM or dealer) keeping field service in check is also important. Aberdeen Group reports in their Field Service 2011: Trends in Workforce Management that “58% of incoming service requests ultimately require a field dispatch of sorts”. Well over half of all calls end in a field service activity! So for the OEM or dealer, the performance of their field tech can cost them dearly if poorly managed, or become a source of revenue if given the right tools to do their jobs well.
The success for all three groups relies on the effectiveness of the technician in the field. The more knowledge, training, tools and updated information he/she has, the more effective they will be.
Tools of Knowledge
Not all field service technicians can be as perfect as those in our perfect world scenario. We are human after all. But how do we at least come as close as possible to that ideal?
Tools. Yes, of course we mean the manual kind needed to make the actual repairs, but we also mean tools to access a collective knowledge base about each particular machine, that may have taken hundreds of people to create, update and share.
Built into every piece of equipment is a deep well of information that isn’t always easy to disseminate to, or access from, the field. Engineering drawings, service bulletins, parts lists, previous service history, maintenance manuals, parts replacements, parts updates or available inventories, sales data sheets. The information exists, but field technicians and mechanics don’t always have access to it.
The tool best suited to equipping the tech with what they need is an Integrated Electronic Parts Catalog such as the Enigma® InService® EPC. With it, techs can access complete sales, catalog and service information by serial number, product line, or model. They can be granted access to diagnostics information, inventory and ERP systems or even videos on proper maintenance and repair techniques. The parts shopping cart streamlines the parts ordering process and reduces mis-orders leading to better first time fix rates.
And because InService EPC administrators can push catalog updates and service bulletins to the field immediately, the most current information is always available. This is especially useful if the service techs are also outfitted with technology to further improve service execution and increase profits. Wait, maybe that does sound a little bit like our perfect world scenario after all. The point is that with the proper organization of and access to collective bank of service information, knowledge becomes a serious profit generator for customers and OEM/dealers alike.
I’m sure Sir Francis Bacon, English author, courtier, & philosopher wasn’t thinking of the modern day field service industry when he originally coined the phrase “knowledge is power”. But I’m sure he wouldn’t mind us extending the meaning to include how profitable knowledge can be when applied to the unassuming field service technician or mechanic.
According to an article in Aircraft Commerce magazine, airlines are increasingly looking for fully automated Engineering & Maintenance (E&M) systems. The author claims that airlines are trying to establish paperless processes that automatically stay up-to-date, ensuring that all E&M systems (MRO, CMS, ERP, etc.) remain synchronized with the latest parts, procedure and effectivity information—pulled from AMM, SRM, IPC, FIM, EM, CMM, etc.
The magazine quote says, “The ultimate goal for airlines and MROs may be to achieve a paperless process, by: eliminating or minimising the manual management of data inputs and migration into M&E systems; fully automating revisions to documents and data, and reconciling changes; automating task and job card generation; publishing and distributing job cards electronically; and recording the completion of maintenance tasks and associated findings; and keeping maintenance records electronically.” That goal may sound ambitious, but large carriers like Korean Airlines (KAL) have accomplished it and it is now achievable and affordable for smaller carriers as well.
IT initiatives to integrate the whole E&M environment are not new; the largest international airlines launched such programs many years ago and similar projects are now being pursued by national, regional and low-cost carriers (LCC). The reason is a need for higher efficiency, lower cost, and greater quality/compliance for airline and MRO maintenance and operations activities. All carriers face these problems, even those that try to standardize on a single vendor/fleet often find themselves operating multiple aircraft types, engines and components.
To properly support any kind of mixed fleet requires IT systems that handle a variety of data formats, document types and workflows. While OEM-based solutions, like Boeing’s Maintenance Toolbox and Airbus’ AirN@v, may be buzzword compliant (i.e. they use all the right terminology), they have yet to prove themselves in real world operations supporting mixed fleets.
Airlines that understand the complexities of technical content and fleet requirements want their E&M systems to handle any data format that’s thrown at them (SGML, XML, PDF, etc.) in any data standard (iSpec 2200, S1000D, etc.) from any vendor (Boeing, Airbus, Bombardier, Embraer, GE, RR, PW, etc.). E&M system flexibility is necessary for current operations as well as future growth and potential mergers. Furthermore, airlines don’t want their E&M system to be limited to one file format/data standard (e.g. XML in S1000D v4.0.1) because such an approach would require an airline to convert all their technical content before it could be used within their E&M system—and that conversion (and QA process) would be required every 60-90 days for each revision of every OEM manual. (It’s actually worse than this because S1000D is so flexible that it allows OEMs to implement the same standard in different ways yet still be compliant.) No, most airlines understand that a truly automated and integrated E&M system must utilize technical content in its native format, just the way it came from the OEM.
Maintaining an aircraft fleet requires so many sources of technical content that the responsibility for keeping all the E&M systems synchronized can’t be achieved by the IT department. The difficulty of this task was highlighted by GE Aviation at the 2010 ATA e-Business Forum when they admitted that the manuals in use at many customers are 1-2 revisions behind and as much as 12 months out of date.
Without up-to-date and synchronized technical information an airline’s line, hangar and heavy maintenance cannot become more efficient and consistent. Some airline and MRO IT departments are trying to synchronize the E&M systems using manual labor (or a lot of custom code). Others simply require the maintenance planners and technicians to use multiple IT systems and figure out for themselves which pieces of information are relevant. However, modern software systems have emerged that can automate much, if not all, of this process. To that end, the Aircraft Commerce article highlights many of the concerns that airlines and MROs face when putting together an E&M IT strategy.
Fully integrated and automated E&M systems do exist for airlines and MROs. When evaluating such systems the challenge is to differentiate between necessities and luxuries. Enigma put our thoughts on this subject into a sample RFP (request for proposal) that represents 15 years of implementation experience for multiple airlines, IT systems and data formats/data standards. This tool is extremely useful for airlines and MROs that are seeking to upgrade their E&M systems, and can be downloaded from our website.
As airlines and MROs grapple with the challenges of operating and maintaining mixed fleets, it’s good to know that the “ultimate” MRO IT system can be achieved. We hope that airlines seeking to bring their E&M system into the 21st century find this and other resources on the Enigma web site to be most useful.
Tags: aftermarket, OEM parts, Electronic parts catalogs, parts and service, Automotive Aftermarket Industry Association, Carlisle & Company, warranty, J.D. Powers and Associates, EPC, InService EPC, Enigma, dvautier, diane vautier
Auto dealerships experience a massive drop-off in service and repair work following the end of a vehicles’ warranty. It’s a sudden and steep drop with devastating financial implications for auto OEM’s and dealerships alike.
Even the best dealership service departments are not immune. According to Steve Finlay of WardsAuto, citing a J.D. Power and Associates’ Customer Service Index Study, customer retention rates for maintenance and repair are often less than 60% and only top dealership networks with superior reputations for service do better.
Carlisle and Company research shares similar results with one of their clients reporting up to 50% loss in customer loyalty on the day the warranty expires.
Why the Drop?
Soon after the sweet romance of the new car purchase in the flashy front showroom, owners are whisked away to the backroom service department for the rest of their auto ownership relationship. The experience they have in your service department over the following years has a significant impact on their loyalty and satisfaction.
Finlay again sites Jon Osborn, J.D. Power's research director: “Since dealer service is the last touch-point in the vehicle ownership cycle that auto manufacturers have with customers, providing superior levels of service can leave owners with a lasting favorable impression of the brand”. Poor impressions damage brand loyalty and ultimately reduce future service revenue and new car sales. Customers simply seek out independent service shops or change brands all together.
Losing 40-50% of service business after the vehicle warranty ends suggests that dealers are not giving owners a lasting favorable impression.
Why is post warranty revenue important?
In today’s tough economy, drivers are purchasing fewer new cars and keeping the cars they do have on the road longer. This has pushed the average age of a vehicle up to 10.8 years. Savvy automotive OEM’s and their dealers have recognized the shift and are looking to that lost post-warranty revenue as a source of additional profits to offset fewer new car sales.
Both OEMs and dealers are eager to capture a larger piece of the post-warranty pie, which can add up to serious profits given the increased length of ownership.
So, what’s the issue?
Carlisle and Company is studying the challenge. Some of its preliminary findings are that customer expectations are not in alignment with the service practices of dealerships, which leaves everyone (the OEMs, dealers and customers) unhappy and probably a little bitter.
Carlisle identified the top 26 factors (grouped into 5 categories), which customers value most and compared that against what service departments offered. The results show that dealers aren’t stacking up. “According to the customers, their business migrates to operations perceived as more trustworthy, easier to do business with, and lower priced”.
What can be done to earn more post-warranty revenue?
Auto OEMs and dealers can eliminate some of the gaps by understanding the expectations of customers and delivering what they want. One tool that has proven to accelerate repairs, increase quality and improve customer-dealer-OEM relationships is Enigma’s InService® EPC (Electronic Parts Catalog). A well-executed EPC system streamlines the dealer’s diagnostic, troubleshooting, estimating, parts availability and ordering activities, which accelerates repairs, improves estimates and increases quality (first time fix). The right EPC also provides OEMs with on-demand analytics and dashboard reports so they can spot service trends faster, and minimize customer snafus before they become a recurring issue.
InService EPC makes it easier for dealers to communicate openly and effectively with OEMs and to answer customers quickly and accurately, which helps them build a long-term, trusted relationship.
And as we’ve learned from the J.D. Power and Associates’ Customer Service Index Study, top dealership networks with superior service retain a higher percentage of maintenance and repair dollars.
Korean Air (KAL) knows how to operate the A330 aircraft, at least according to Airbus. The manufacturer of the A330 gave KAL the award for Best A330 Operator at the Technical Symposium in Bangkok (June 12-14).
Based on a detailed evaluation of KAL’s A330 performance, including on-time operation and aircraft utilization, Airbus recognized KAL for its overall excellence in maintenance. According to the article, “Operating a total of 23 A330s, Korean Air has the highest recorded on-time operation rate of 99.78% amongst 120 airlines from 2010 to 2011.”
Enigma is proud that KAL has demonstrated such great success while using our InService® MRO product – ensuring maximum uptime with minimum turnaround time (TAT) for their A330s. At a recent MRO tradeshow KAL executives described Enigma's value, which was also reported in another recent magazine article.
Clearly KAL's maintenance strategy is paying off, for their passengers and for their operations department. Enigma extends our heart-felt congratulations to Korean Airlines, for winning this prestigious Airbus award!
A new report from Gartner indicates that e-commerce is the hot new trend in discrete manufacturing. The report says that, “E-commerce can be used for the direct sales of new products, services, digital goods/ content, replacement parts, accessories, entertainment, travel and much more.” Three items stand out in this list: services, replacement parts and accessories. Each of these items represents a new sale related to an existing product or piece of equipment (already owned by an end customer). In other words, e-commerce is changing the aftermarket.
Manufacturers typically start down the e-commerce path by implementing a few limited, tactical projects. Once there has been some success, initiatives get bigger and more strategic until e-commerce is ultimately viewed as a “mission critical” component for the entire business. According to Gartner, e-commerce is now viewed as an imperative for discrete manufacturing and to meet corporate expectations a consistent approach, across all departments, is required.
For discrete manufacturing, the Gartner report describes two business opportunities that are driving e-commerce: 1) create direct sales to counteract competitors and private labels; 2) reduce the cost of sales and marketing activities/ materials (printing and distribution). Gartner says, “…interest by both groups [revenue and cost] in online selling may have started with the sale of spare parts or accessories, and the groups are now moving on to selling the products.” In other words, allowing dealers and technicians to place online orders for service parts has proven to be so efficient and so valuable that OEMs are now opening up e-commerce to more products and additional customers. Gartner’s findings reflect a similar trend that Enigma sees where customers follow a multi-phase approach to making product, service, and parts information available online, offline and mobile.
The Gartner report tries to measure the interest in e-commerce for discrete manufacturing according to three different dimensions of business impact:
- High heat—reflects the level of interest observed during client inquiries and market analysis
- High rate of change—described as, “how fast organizations are changing their websites to improve the amount of sales coming through the websites”
- High customer-facing business potential—described as, “the degree to which an organization’s customers expect a company’s website to offer online transactional capabilities and their willingness to buy through the Web”
As the report from Gartner clearly indicates, more and more industries (like discrete manufacturing) are turning to their websites for increased revenue, reduced cost and better customer support. Enigma has 20 years of experience helping companies turn the promise of e-commerce into a reality and a recent webinar on electronic parts catalogs (EPC) freely shares the lessons we’ve learned over that time.
Tags: parts and service, service information, field service, customer support, FTFR, Interlog, parts logistics, parts ordering, No Fault Found, Enigma, John Snow
How can OEMs reduce inventory and logistics costs? That was the question being asked at Interlog 2012 (in Dallas) and most presentations focused on either improving logistics or on the importance of customer satisfaction. Unfortunately, these discussions were fairly process oriented, which made them more tactical than strategic. The inventory and logistics conversations revolved around optimizing inventory levels, safety stock and fill rates while the customer satisfaction conversations focused on improving fix first time (FFT) rates (service quality). However, none of the presentations discussed whether or not there is a connection between the two, which raises an interesting question, “Does the pursuit of higher service quality drive up inventory and logistics costs?”
This is not an idle question, it came directly from a conversation I had with a VP of Support Operations. His company partners with various third-parties to service their equipment in the field. To ensure customer satisfaction, technicians get bonuses if they achieve certain FFT levels. However, he’s starting to wonder if FFT bonuses are prompting technicians to order more parts than necessary (driving up returns and re-stocking fees), to perform “pop and swap” maintenance (resulting in more parts with no fault found (NFF)), or to pursue other short-cuts that improve FFT but ultimately drive up costs. To that end, he's been trying to monitor technicians in the field to see if they’re using the proper service procedures before starting a repair.
From our conversation, it’s clear there are three distinct inventory and logistics problems related to field service: ordering the wrong parts; ordering too many parts; replacing “good” parts. Each of these represents a type of misorder. However, none of these misorder problems can be fixed by inventory management systems, which was the primary topic at Interlog. Misorder problems can only be solved by the technicians—giving them better tools that provide accurate service and parts information, configuration-based bills of materials (BOMs), and integrated workflows (tied into ecommerce, inventory and logistics). When service technicians are basing decisions on poor data, or when they have to search for the information they need, is it any wonder that inventory and logistics costs increase?
According to the companies I spoke to, service organizations that focus on quality see a clear pattern emerging:
- Technicians pack more parts than needed to fix a job (over ordering).
- Any extra parts are saved by the technician for future use (trunk spares that can’t be easily tracked as inventory).
- Technicians try to accelerate repairs by replacing different components one after the other until the problem goes away (pop & swap).
- Rather than determine the faulty component, each replaced part is returned to the OEM and tested to identify which one(s) failed (or determine NFF).
- NFF components are processed and returned to inventory (re-stocking fees).
In other words, as OEMs offer FFT incentives technicians are responding by ordering too many parts, stashing them locally, ignoring repair procedures, and replacing perfectly good components…all without any repercussions for their actions.
Enigma believes that improving service quality is critical to our customer’s success however, the methods used to raise quality levels are important. Recognizing that the service and parts business is essential to OEM profits, OEMs need to move beyond customer satisfaction via simple FFT bonuses and start asking better questions. To get an objective view of their aftermarket business, OEMs should be:
- Tracking how many parts are requested for each customer, for each type of equipment, for each service visit, for each service organization, for each service technician.
- Tracking NFF rates for each customer, for each type of equipment, for each service visit, for each service organization, for each service technician.
- Tracking the number of parts requests and service calls where all returned parts were "good" (all NFFs), all returned parts were "bad" (no NFFs), one or more returned parts were NFF (judgment call).
- Tracking which service organizations and service technicians are using approved service procedures.
- Tracking which service procedures or part selections are causing the most difficulty for technicians (without resorting to surveys or feedback from the field).
- Monitoring differences in how technicians approach corrective maintenance vs. preventive maintenance.
These are just a few of the key performance indicators (KPIs) that help uncover problems within aftermarket service and support. OEMs that know some of these numbers can start to ask the next question, which is “what to do about it?” However, capturing an accurate picture of field service doesn’t come from technicians filling out post-service reports and surveys; it comes from monitoring the actual tools that technicians use to perform their jobs.
To maximize customer satisfaction and minimize support costs, OEMs need to continuously improve service quality while simultaneously reducing inventory and logistics costs. New tools are required that not only report on the situation in the field, but also provide an integrated system that improves the technician’s performance as they execute service and support.
If your company is facing service and parts challenges, contact Enigma. We can help.
Tags: MRO, Airbus, aviation, Boeing, technical documentation, ATA, S1000D, SAP, PDF, Tablet, Enigma, John Snow
Last week, the Danish Defense Forces sponsored SUGAIR 60 in Copenhagen, Denmark. The SAP Users Group for Airlines (SUGAIR) is a bi-annual conference for experts, executives and managers of MRO operations in the airline, aerospace and defense industries. Enigma was invited to describe the challenges associated with moving to the S1000D data standard and to discuss the opportunities for tablets in the hands of technicians. It was also an opportunity to update SUGAIR members on the SAP-Enigma integration strategy. (The deep integration with SAP has made Enigma the de-facto standard for delivery of technical information in SAP projects for A&D.) SUGAIR 60 had an impressive list of airlines and defense organizations in attendance and the feedback Enigma received was very positive.
SUGAIR attendees found the S1000D discussion very enlightening. The audience came to realize there is a lot of cost and effort required when implementing a functional S1000D environment; more than previously understood. Many of the “features” touted by S1000D vendors and consultants require custom implementation because OEMs (Boeing, Airbus, et al) have implemented the standard in different ways. (New standards often seem to make matters more complicated, as vendors try to establish or retain a perceived competitive advantage.) The attendee’s reaction reflects the concern expressed by airlines at last year’s Aviation Week MRO IT in Chicago. It turns out that because certain S1000D attributes are considered optional, or vary by OEM, most airlines and MROs won’t be able to reap the benefits of S1000D without a customized solution. However, Enigma did demonstrate some of the potential benefits of S1000D including:
- Fault isolation decision trees – dynamically generating the next information set based off the technician’s inputs, and recording the user’s path to feed a symptom/resolution knowledge base
- Truly interactive maintenance operations – where each maintenance step performed is passed back to the system of record
The next topic generated a huge amount of interest, which is the ability to make PDF data behave like XML...no conversion required. Enigma demonstrated the extraction of text fragments from PDF documents and the dynamic (on-the-fly) creation of job cards based on that PDF content. Furthermore, Enigma demonstrated the ability to link back and forth between XML and PDF documentation so that PDF functions essentially the same as XML. Given the amount of PDF that resides in aviation technical libraries (and the amount of PDF continues to grow) this capability helped many in the audience wake up to the opportunities to leverage existing data (without a complete data conversion initiative).
As in the past, the topic with the greatest “cool” factor was Enigma’s discussion and demonstration of a tablet-based solution. This is not a special tablet-only implementation of Enigma; it is standard InService® MRO using style sheets that have been tailored to the unique requirements and capabilities of a tablet device. The demo showed how single source access to the complete technical library can support routine maintenance as well as non-routine maintenance disposition and correction, and seamless, enhanced maintenance turnover events. By this point in the presentation, Enigma had run over the allotted time but the attendees readily offered more time to complete the demonstration/discussion.
For many attendees, the social highlight was a boat tour of the canals around Copenhagen, which was sponsored by Enigma. It was a great opportunity for members of SUGAIR to connect in an informal way, and for the many defense and airline organizations to get acquainted and compare notes.
Throughout the three-day event Enigma reinforced the strong bonds we've developed with many SUGAIR attendees, and we extend a heartfelt thank you to the members of SUGAIR and to the Danish Defense Forces for their gracious hospitality. Enigma believes that participating in SUGAIR 60 allowed us to help solve today’s (and tomorrow’s) aviation maintenance challenges, and from the feedback we received the airline, aerospace and defense attendees gained valuable insight for how to leverage SAP and partner technology to create success.
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