Best-in-class OEMs are looking beyond product-based sales approaches to post-sale strategies that can build customer value during the product's entire installed operating life. That's the philosophy that initiated a smart services strategy at Gardner Denver, a $1.9 billion manufacturer of air compressor products and industrial equipment, explains Mike Bakalyar, manager of enhanced services, Gardner Denver Compressor Division.
Using smart service strategies, manufacturers can strengthen product support for owners and operators of industrial equipment, he explains. "With our air compressors it all started about four years ago when Gardner Denver intensified its energy conservation involvement by focusing on air compressors from a total cost of ownership approach."
Bakalyar says the approach was motivated by a desire to help customers monitor and control electrical power usage. He quips that compressed air is really an expensive form of reconstituted electricity.
"By leveraging on-board sensing and control devices with wireless Internet connectivity, we gain asset visibility that enables us to help our customers optimize operation of the product." Smart services solutions allow manufacturers to remotely capture and analyze asset performance data, identify root causes of failure and trigger corrective action. The results can be repairs, upgrades and the dispatch of repair technicians and parts.
Bakalyar says the air compressor initiative started with the selection of nPhase as the solution provider. "We knew what we wanted to do in terms of communicating with the asset and nPhase helps us develop and optimize the Web-based platform for data handling and our wireless approach. In our applications, asset information is conveyed via a cellular connection for gathering at a server level for presentation on the Internet." Bakalyar says the eight beta sites have concluded 18 months of evaluation and commercialization is the next step.
Bakalyar contrasts that approach with the more common reactive mode where nothing happens until equipment failure occurs. "At that point a frantic customer calls the OEM to report the unintended equipment shutdown. Our smart services concept will enable us to get ahead of the curve."
Bakalyar says Gardner Denver goes to market through distribution, the entity in the chain that also provides the smart services. Data access is given to anyone having a stake in the installation where data is being collected and monitored.
In addition to reacting to sensor data, Gardner Denver's system can also issue alerts based on actual instrument readings -- specific analog data measuring such things as temperatures, pressures and power consumption. The system is designed to access as many as 16 points on an asset.
At the beta sites Gardner Denver found they couldn't routinely substitute Ethernet for wireless connectivity. Bakalyar found that IT departments at the test sites were uniformly reluctant. "They feared the emergence of security problems. Going via Ethernet would require requesting a portal in the firewall in order to transmit out of those facilities," he explains. "Using wireless lets us stay completely away from their Internet infrastructure." However, he says Ethernet will still be available for those who request it.
Bakalyar emphasizes that the smart services approach delivers its value by monitoring air compressor operating variables, especially power consumption. Consider that even when a 150 hp air compressor is operating correctly, the annual electrical power bill for 24/7 operation can be as high as $114,000, figured at 10 cents per kwh. That's almost $1.15 million in a ten-year product lifecycle.
Does monitoring matter? Bakalyar stresses that being even 10% or 15% off best practice applied efficiency can result in big numbers. "And they are dollars that come off the net level for the operator -- in other words, if we can save that money, it is net profit salvaged. And it has a significant impact on the cost to produce."
Don't think, however, that Bakalyar's solution will require the likes of "Star Trek's" Captain Kirk or Mr. Spock to sit in a control room watching a visual dashboard to catch operating discrepancies. "Philosophically, the solution is designed to function as a rake being drawn across a coal field. As long as the only thing it uncovers is coal -- good data -- we really don't care. Essentially it is designed to sort through the mundane, "everything is okay" information, and only report and advise when action is required. Neither Gardner Denver, nor its customers, nor its distributors have the time capital just to sit before monitors waiting for something to deviate. The application is designed to essentially ignore what's going right and only report on something that needs to be addressed. However, Bakalyar says that full access to the collected data is available to the customer if so desired.
In transitioning to smart services, Bakalyar cautions that the process has to be done with the mutual understanding that to be done properly, both the OEM and the customer go through transformations. "With smart services, the OEM/customer relationship continues, even grows, after the sale is made and the product is shipped."
Bakalyar says the OEM has to fully adjust to the necessity to stay engaged with the asset throughout its entire lifecycle. And the only way that can be done is for the OEM to maintain product visibility after the sale. That's how best practice efficiency levels can be maintained, he asserts."
The other issue, he says, is that the OEM gains important understanding on how the asset has to "live" where it "lives." That knowledge could lead to faster, more competitive product development cycles and greater customer satisfaction. He ties it to the admonition that "to manage it, you've got to measure it first. What could be better than having a 24/7 real-time connection to a design that's being used?"
For those who would also wish to pursue a similar smart services goal, Bakalyar suggests starting by defining expectations. "Know what kind of asset information you want to access, develop a good understanding of what those data points are and carefully define their value. Then discover whether you have the capabilities to develop the communications internally or whether it makes more sense to look for a partner."
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