Manufacturing Executive - November 2008 - (Page 33) Q: How does PSS work in practice? Are there role models out there? A: The classic example is Rolls-Royce aircraft engines and their total-care package, “Power by the Hour.” Rolls-Royce don’t just manufacture gas turbines anymore; they provide a long-term service. Over half their profit now comes from the service end of the business. It’s key for them to understand what their end users are doing with the engines. They also have to guarantee a certain level of performance. And they have to provide a service over an extended period of time, maybe 25 to 30 years. So they need to understand how this all influences their business processes — and how it influences the technology that they are going to put into the engine. It’s a different philosophy in terms of things like reliability, and it has changed the way in which RollsRoyce looks at manufacturing. This philosophy applies more and more across different manufacturing sectors. gineering through to customised production processes, such as additive manufacturing, rather like rapid prototyping but using it as a full production process. Companies like Rolls-Royce are doing that. You design your components or product on your CAD system, deposit your materials, build up structures, then finish machine it all in one process. It is very quick, very flexible; it reduces cost; and you can respond very quickly. CRM is very important. If we can provide high value and integrate functionality into products and think about customisation and integrating customers into the process so that they become co-designers and contribute to product creation — And how do you quantify the added value? Q: Are you working on methodologies to help manufacturing companies transform their service approach? A: Yes, part of Cranfield’s work with PSS is to develop methodologies so that companies can decide what is the right direction for them in terms of service. How do they transform the business to become a manufacturer and service provider? And what would the business look like in terms of its optimum configuration? This is quite a new area. Q: It’s also a lot of questions. Have you reached any conclusions so far? “Generating these multidisciplinary teams is critical because otherwise you don’t fully understand the issues.” those are the things that are really going to benefit manufacturing in Europe. A: The key thing is to get the management people working with the engineers and technologists, which really hasn’t happened before. It’s key to success. We all have different mind-sets and think about things in a different way. We even use different terms to say the same thing. Generating these multidisciplinar y teams is critical because otherwise you don’t fully understand the issues. It allows people from different backgrounds and experience to approach a problem in quite different ways and find a solution. Once they work together, they can see the benefits of doing that — across the board. Q: How does a company begin the process? A: Look at the way we create products. With the new technologies and materials that are being developed, one of the key areas is integrating more functionality into products. Think of smart material sensors, or monitoring systems, built-in at the design stage to anything from an aero engine to smart health devices that let you remotely monitor patients at home instead of in hospital. In terms of design manufacture, these products offer far greater functionality. That’s an enormous service opportunity for a manufacturer, but it involves a lot of business issues and ICT [information and communication technology] issues to make it happen successfully. Q: What kind of issues? A: The key enabler, in terms of developing new manufacturing strategies, is based initially on technology. Companies need to do things quicker, need to be more flexible, need new technologies to integrate functionality into components and products — and all that needs to link into the provision of service. It can involve everything from micro-en- Q: So where are the biggest challenges — in technology, process, production, or management? A: Definitely the business end of it. The real challenge is selling this to management so they are going to invest in the service end. I guess it is partly education. We are pretty innovative at developing new processes and technologies that will do wonderful things. It is getting that link to the business case for how we best apply them to creating service revenues. Q: How can executive leadership drive this change? A: You have got to be proactive if you are going to be successful. Low-cost economies are not going to stay behind for long. We can’t afford to be too conservative in how we take business forward in terms of new technologies. We’ve got to invest in R&D and high-value approaches to keep ahead of the game. We need people who have a mix of skills, who have that greater vision and are willing to take more calculated risks. Investing in the future — in terms of working at the interface between technology and management — that’s really important. Finally, linking new technology to service — integrating systems, design, and service into one profitable process — I think that will be key to maintaining a competitive manufacturing sector in our high-cost economies. s November 2008 Q: Won’t this new service focus require almost a complete mind-set change in some companies? A: It does. One of the things companies have to do is to think about what they understand as service and what it means to them. What are they going to provide in terms of added value? Is it the right business decision to go down that route? And how do they sell it to their customers? In the end, the customer has to pay for it, so how do you sell the added value in that link between the product and service? 33
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