The Uptime Blog
“If your business hasn't been paying attention to your documentation, you're ignoring a sales tool and a revenue generator and you need to rethink your priorities.”
—Aaron Fulkerson, “The Evolution of User Manuals,” Forbes.com, August 9, 2010
A recent article on Forbes.com indirectly speaks to why online parts catalogs are so critical to manufacturers and owner-operators of complex machinery. The author Aaron Fulkerson writes, “Indeed, online product and services documentation has now proved to be an immensely effective way to increase new customer acquisition and to shorten sales cycles. It is now a critical business tool.”
We couldn’t agree more. Though Fulkerson’s argument is largely centered around documentation for high tech equipment, similar rules apply for all products that need service and support. When customers need to fix a complex machine—whether a car, tractor, locomotive or valve—they need the latest service information and they need the right parts. If the OEM doesn't provide it, customers will go to an independent dealer or even a competitor, and so the manufacturer loses a sale.
As described in our white paper, “A Business Case for Implementing an Electronic Parts Catalog,” parts and service is typically no more than 25% of an organization’s total revenue, however they represent as much as 75% of a company’s profits. One Fortune 500 company estimated that each percentage point increase in market share for parts delivered another $3.2M in annual revenue and another $1.3M in annual profit.
Companies should also explore improving their online documentation as a way to drive down customer support costs. One company reported that customer support representatives (CSRs) regularly spent 45 minutes on the phone with each customer, identifying problems and ordering parts. Traditional customer support requires a lot of back-and-forth to understand the current product configuration and isolate possible faults, which then influences parts selection and repair procedures. Typically, CSRs use the same information as dealers and customers, including the inadequate/antiquated catalog search and filter capability. These issues lead CSRs to spend a substantial amount of time searching multiple systems, and ultimately contacting the engineering department to help resolve the customer’s problem.
With up-to-date online documentation in the form of an electronic parts catalog, a customer can quickly find the information he needs on his own. The result is a happier customer and reduced CSR costs. In this way, customer support can spend more time providing higher value service and less time looking up part numbers, price and service procedures. Seems like common sense, doesn’t it?
Our previous blog post talked about the challenges facing maintenance, repair and overhaul shops (MROs) in light of the decline in MRO work. Today’s blog elaborates on some of those challenges, and discusses some IT solutions that can help MROs reduce costs, which will help them weather the downturn in business.
Aircraft maintenance is anything but simple. The machines are expensive and complex, and they operate in an environment that is global, hazardous, and highly regulated. As a result, the back office systems and organizations that support aircraft must achieve multiple conflicting demands. It should come as no surprise therefore, that different organizations manage and use maintenance content in different ways.
Line maintenance relies on a technical library, which is used to resolve unscheduled and non-routine maintenance events that may result in flight delays. (There are as many as 12 different manuals used by line maintenance on a frequent basis.) In contrast, Base maintenance relies on a maintenance scheduling system and pre-defined job cards to assign and describe maintenance activities. (Line maintenance ultimately requires a job card as well but the process doesn’t start there.) Having different systems for each environment is not unreasonable because each organization has different responsibilities, cost drivers and time pressures. Thus there are separate departments, writing separate sets of documents, for separate audiences.
However, if the maintenance procedures in those systems are different there will be problems. If maintenance plans, job cards and technical manuals are not synchronized, then aircraft may not be properly maintained, which can result in fines.
Things get even more complicated with 3rd party MRO shops because technical content must now be sent and managed offsite. Nevertheless, the airline still owns the responsibility for ensuring proper maintenance.
When the countless OEM updates and airline-originated changes are taken into consideration the result is an enormous increase in workload for engineering, planning and tech pubs. Reconciling OEM updates with existing maintenance documentation has historically been a labor intensive and time-consuming process. And the longer it takes to process revisions, the less likely it is that technicians are working from the most up-to-date maintenance instructions, parts information, drawings and schematics.
These are some of the problems when maintenance systems have inconsistent information… what’s the solution? The solution is to synchronize tech pubs with maintenance planning and execution. Automated revision management and job card generation are just a couple of today’s IT offerings that can ensure each department is working with the same content, while speeding up the processes of managing the information and conducting maintenance.
When properly implemented, integrated and synchronized maintenance systems deliver lower turnaround times (TAT), and increased efficiency and consistency. If an MRO shop can brag about that, they can compete effectively against anyone, even when MRO industry growth is slow or flat. For more on this topic, playback the recorded webinar that Enigma conducted with SAP and HCL Axon.
A recent news story in MarketWatch notes that although the airline industry is seeing a rebound in passenger travel, the maintenance, repair and overhaul shops (MROs) that fix the aircraft aren’t realizing similar gains.
One would think that more flights would mean more maintenance, so what explains the trend? According to MarketWatch, the answer is that airlines are flying their newer, more efficient aircraft, which require less maintenance. (As aircraft age, they typically require more complex/ comprehensive inspections and maintenance.) The demand for passenger travel has gone up, but is not so high that the airlines need to use their older planes, many of which are “mothballed” in storage hangars. So, unless or until airlines tap into their fleet capacity, the MRO industry is bound to remain relatively flat.
“Worldwide, spending on aftermarket services is set to fall 7.5% this year to $42.3 billion from about $45.7 billion in 2009, according to data provided by Team SAI Inc., an aviation consulting firm. That's likely to remain flat through 2011, with the market expanding just 4.4% by mid 2015.”
Ironically, it was less than 2 years ago when we quoted an article in Air Transport World about how the booming airline business requires more MRO. The recent MarketWatch article quotes Peter Arment, an analyst with Gleacher & Co., explaining "Operators are unlikely to bring back many of the parked older less efficient aircraft, which the aftermarket heavily depend on."
On the other hand, I just received an email sales pitch last week from Aviation Week MRO Prospector (their online database product), claiming that “…there is roughly a $13.7 billion Commercial MRO market in Eastern and Western Europe and that it is expected to grow 18% in 5 years and 27% in 10 years. Of that $13.7 billion, almost $5 billion is in engine maintenance, $2.8 billion is component maintenance, $2.8 billion is line maintenance, $2.2 billion is airframe maintenance and $900 million is modification maintenance.”
So which source is more accurate? The Aviation Week pitch seems to be talking about the future, which as we all know, is somewhat unpredictable. Therefore it makes more sense to focus on the current situation, which is pretty bleak for MROs. So MROs have to be asking themselves, what can we do to weather this downturn? They have to either drum up new business (which is hard to do in a recessionary economy) or they have to reduce costs.
One way to reduce costs is to improve efficiency; with powerful new IT solutions available, this is definitely an option. It’s important however to track total cost of ownership (TCO) to ensure the upfront investment in technology pays significant dividends—both short term and long term.
Stay tuned for next week’s blog post on this topic, of how MRO shops (and airlines) can synchronize tech pubs, engineering, line and base maintenance.
Tags: aftermarket, Electronic parts catalogs, parts and service, service technicians, Goodrich, SaaS, OEM content, automotive, service information, parts ordering, heavy equipment, Volvo, Ford, dealer support
OEMs that make complex machinery (whether it’s heavy equipment, automobiles, oil rigs, or other discrete manufacturing products) need to support their dealers and distributors. This can be a challenge because dealers and distributors tend to run as stand-alone operations (often they are independent franchises) that have their own business issues, separate but related to the business issues of the OEM. One of the ways OEMs help these business partners is via an electronic parts catalog, to provide accurate parts and service information, streamline parts purchases and simplify customer support/service.
But creating an up-to-date parts catalog is no small task; many forms of data (schematics, manuals, service bulletins, inventory, etc.) must be pulled from multiple database sources, and formatted into an application that is accessible to many users. That’s where Enigma comes in, providing Electronic Part Catalog (EPC) technology that: 1) makes it faster and less expensive to create and publish aftermarket support applications; 2) makes it easier to buy service parts from the OEM and distributors; 3) improves customer support/service.
Some OEMs are motivated by saving money on the front end; i.e., saving money on the cost of producing their catalog. Goodrich Aerostructures, for example, saves $1-1.5M per year in production costs. Others, like Ford, primarily want to help sell the right parts fast, without increasing customer support costs. Others are keenly interested in improving their end-users’ customer service experience, like Volvo, which embeds the Enigma EPC into Volvo VIDA, its dealer support system. (Relative to its former system, Volvo service techs now make repairs faster and service more cars per day.)
The advantage of Enigma’s InService EPC software solution is that it can be tied into the OEM’s order management, inventory, ERP and CRM systems to automate the entire customer support workflow. It also allows dealers and distributors to integrate the EPC to their dealer management (or ERP) systems to automate workflow and part procurement for the dealer.
However, some companies require a faster rollout and lower costs (in dollars and IT resources), and consider fully-integrated parts logistics to be a future objective. The solution in these cases is a software-as-a-service (SaaS) solution. As more companies embrace a SaaS approach to IT, Enigma has responded by offering a SaaS version of our tried and true EPC technology. Enigma SaaS EPC is a powerful product that helps OEMs put parts and service information online very quickly, allowing the OEM to support dealers and customers with unlimited updates of service and parts data.
One advantage of Enigma SaaS EPC is that it reduces the time and cost of launching a Web-based service and parts storefront. It can be rolled out in 90 days, with little or no upfront IT investment. Furthermore, because the application is hosted “in the cloud,” it reduces hardware server and maintenance costs. The SaaS EPC solution is particularly compelling for two business profiles: 1) small-medium businesses (SMBs) that wish to keep infrastructure requirements low; 2) larger companies that want to start small as they move their customer support (and EPC) to the Web.
There are good reasons for both solutions; OEMs need to determine their immediate requirements, as well as their future goals, and choose an EPC solution that supports both.