Knowing when to ditch old equipment is tricky but essential to avoid waste and downtime. “Data is a precious thing and will last longer than the systems themselves,” wrote Tim Berners-Lee back in 2006 in A Framework for Web Science. It’s an interesting quote because 19 years later it can be applied to what we are starting to see in the field service industry. As new research from Forrester Consulting has revealed, the value from equipment and service data will exceed the value of equipment itself within five years.
The research, From Grease To Code: What Drives Digital Service Transformation, found that 41% of organizations say they don’t know if they are retiring equipment prematurely, and a lack of service data insights means they have no knowledge of how much capacity remains in their capital assets.
Interestingly, this statistic was taken from a cross-section of industries including manufacturing, healthcare, utilities, and telecommunications. Organizations of all shapes and sizes are reaching the same conclusion. Something drastic has to be done to ensure they are not pouring money down the drain by ripping out machines too early or risking productivity by keeping them in situ for too long.
“Firms struggle with understanding the lifetime of their equipment and how to improve it. As a result, they face high maintenance costs and unplanned downtime that affects their revenue and customer experience,” says Forrester Consulting in the report.
Missing Data Means High Operating Costs and Missed Opportunities
Most, according to the report, have high maintenance and operating equipment costs, as well as a lack of knowledge on how to reduce these costs. More than half of organizations surveyed say unplanned downtime is becoming a bigger issue, which of course directly impacts revenues and customer experience.
It’s a huge challenge for organizations, especially those with considerable fixed assets. While the average lifespan of equipment is under ten years for most companies, 80% of firms say they need better insight to extend the life of their equipment. Close to 70% of businesses say extending equipment life would result in financial gains.
Whoever owns the assets also owns the risk of overcapacity and underutilization, poor machine up-time, management of the supply chain required to keep the machines running, recruitment, training, and retaining staff to service the equipment—or paying someone else to do so. It’s a catalog of tasks that needs managing, but how?
As-Maintained Equipment Data Isn’t Available in Your ERP
There’s an assumption that as-maintained equipment data resides in the company ERP system, but that’s a record of business transactions of the equipment “as sold,” rather than a record of service history, equipment location, etc. Overcoming invisibility of assets should be a primary task and that means on-going health, repairs, patches, and add-ons.
Accurate as-maintained equipment data is critically important for any business as it not only enables companies to see how much longer they can ‘sweat’ their assets, but it also ensures they’re dispatching the right technicians with the proper tools should anything go wrong. The last thing organizations want is to delay repairs by having multiple visits or truck rolls to get a machine up and running again. Otherwise, it’s a bit like a doctor trying to help a patient without having any medical records. It’s still possible to fix the problem but it could take much longer to do.
And of course, it’s important to take the issue of ‘skills fade’ into account. As a piece of equipment ages, so too does the workforce—you need a system to share knowledge and collaborate around asset maintenance.
In short, businesses need a system of record for equipment as it is maintained to prevent downtime, lost revenue, negative customer experiences and expensive and unnecessary premature retirement of capital assets. With live equipment information, technicians can minimize outages and downtime. Response rates will increase and be more efficient. Calls to the service desk to log a “case” should become obsolete as service teams can be alerted to issues through live product visibility.
Only then can organizations truly know when their machines’ time is truly up.