The Uptime Blog
A recent blog post by Sally Foster, a Technology Service Industry Association (TSIA) blogger, focuses on how much time an equipment owner loses when he/she must wait for a service technician. She writes mainly in terms of the hours that customers lose (while on the phone with customer support), or waiting for a service technician to show up. Foster references a TIME Moneyland article that says that nationwide we lost $38 billion in the last year, waiting for in-home service.
Indeed, as consumers most of us can probably recall situations where we have waited a very long time for a technician to show up, or where we spent hours on the phone with customer support trying to resolve a problem. We are not only frustrated that our equipment isn’t working, we are doubly frustrated that we have to spend time just trying to get someone to fix it.
Although it’s interesting to read about the value of consumers’ lost time, it would have been better if Foster had written about the costs that businesses incur when they have to wait for their equipment to be repaired. In various industries, getting efficient, effective service for broken equipment is even more important because they typically lose revenue opportunities when their equipment is down.
The cost of downtime varies, depending on the amount of revenue the equipment generates per day/hour and the demand for its use. In the aviation industry downtime is extremely costly; it’s been estimated that an airline can lose as much as $250,000 per day when an aircraft is on the ground (commonly referred to as AOG). But what about other industries? When a car is undergoing service the costs are not so dear, but for a piece of heavy equipment like a crane or bulldozer, the lost opportunity costs can be significant, perhaps thousands of dollars per day. The costs are even more substantial for something like an MRI machine (in terms of both human health and revenue) or a semiconductor chip manufacturing machine.
That’s the main reason why field service organizations exist: to reduce equipment downtime. It’s why they invest in parts logistics and inventory solutions, and spend lots of resources trying to get expert technicians to a job site, as quickly as possible. But technicians (and customer support representatives) not only need to respond quickly to service requests, they need to be armed with accurate, complete parts and service information. This is what enables them to efficiently diagnose problems, identify and order the right parts and perform repairs, so they can get equipment up and running again. Accurate, accessible information at the point of need is the key to boosting first-time fix rates (FTFR), improving mean-time-to-repair (MTTR) and increasing mean time between failure (MTBF).
Updating and delivering that critical technical content to service technicians is not easy, because it involves large volumes of data, usually in different formats spread across multiple locations: EAM, ERP and ECM systems. But this is Enigma’s strength; we specialize in helping OEMs and operators publish and distribute technical documentation that is essential for maintaining complex machines. Companies that invest in field service solutions like Enigma InService EPC drastically increase equipment uptime, which means their customers don’t lose revenue while their machines sit idle.
During a recent conversation with Joe Barkai of IDC Manufacturing Insights, he mentioned that he’s often asked about improving MTTR and FTFR but rarely MTBF. (For those of you that have forgotten your maintenance acronyms: MTTR is mean-time-to-repair, FTFR is first-time-fix-rate and MTBF is mean-time-between-failure.)
It seems that the natural inclination of many service departments is to focus on quickly getting equipment back in service, with less concern for proper equipment maintenance and calibration. During a break-fix event (unscheduled maintenance) this is a rational response: the equipment is down, revenue generation has stopped, so get the machines working again. However, even during scheduled service events mechanics can become overly focused on speed. This is an example of reacting to the urgent rather than resolving the important. The problem is that service departments are often measured more on productivity than on quality.
Looking at each of these acronyms: MTTR is all about fixing stuff faster, which requires streamlining repair processes; FTFR seems like it’s about quality but is really more about accurate diagnosis, which takes us back to productivity again; However, MTBF is all about how long equipment continues to function properly.
For example, when the wheels on a car are aligned there is a certain range of adjustment that qualifies as “straight.” That range is the tolerance of the alignment. If the mechanic adjusts the wheels so that they’re barely within tolerance, then one small pothole can knock the wheels out of alignment again. However, if the mechanic is diligent about centering the wheels in the tolerance zone then it may take several potholes before the steering needs another adjustment. In this case, the length of time between wheel alignments is the mean-time-between-failure.
As you can imagine, focusing on MTBF can have a negative impact on MTTR but that can happen when any measurement criteria gets too much emphasis. In future blog posts we plan to take this discussion deeper, and talk about some of the challenges and solutions for keeping these three service measurements properly aligned.
With all the projections of gloom and doom for the coming year, one area we’re not hearing about very much is aftermarket parts and service. Perhaps that’s because the economic downturn has a smaller effect on the aftermarket than it does on manufacturing. The reason is pretty obvious; the wear and tear of normal equipment operations guarantees a need for parts and maintenance. This need never goes away as long as the equipment is in service. So unless customers stop using existing equipment altogether, which can happen, there will continue to be a market for service and parts.
It’s true that in certain industries, and certain regions, some of the equipment is being mothballed. In many industries, new equipment purchases are being delayed. However, most companies are simply finding ways to continue existing operations with the equipment they already own. These companies have an urgent need to operate their equipment more efficiently—improving uptime, reducing mean-time-between-failures (MTBF) and improving mean-time-to-repair (MTTR). The only way to accomplish this, with existing equipment, is to improve the processes associated with parts and service. And that means improving IT, for both the manufacturer and the operator.
A TechWeb Research Report in the print version of the Nov 24 Information Week (”The Road Ahead: Tough Times Call for Strategic IT”) says: “An unintended consequence of the global economic problems is that they may further elevate the strategic role of IT in organizations, as the business looks to its technology platforms and processes to help drive efficiencies that save money and accelerate business activities that can have an impact on customer loyalty.” (The full report is available for registration here.)
For instance, under normal circumstances an automotive OEM gets less than 5% of corporate revenue from spare parts sales but those same sales provide more than 30% of corporate profits. With the decrease in car sales what must that picture look like now? And how much better would it be if the OEMs could position themselves to compete more effectively against Pep Boys, AutoZone and NAPA? Many manufacturers are now trying to find out by implementing advanced parts and service systems to support their customers and dealers.
The economy may be bad but companies are still running their equipment. Enigma’s job is to help manufacturers and operators support that equipment, with software that simplifies the work of mechanics, technicians and parts managers. The result is a more efficient aftermarket with lower costs and higher profits for all involved.