When organizations delve into the realm of Environmental, Social, and Governance (ESG) considerations, a common question that arises is, “How does this truly impact us?”
A report by Bain & Company in April emphasized that strong ESG performance is indicative of a strong business. It highlighted that these companies tend to make strides in reducing carbon emissions, embracing renewable energy, and fostering diverse leadership and talent. The report underscored that when these elements work harmoniously, they lead to enhancements in financial and operational outcomes, including heightened profitability, revenue growth, customer satisfaction, and employee contentment.
However, for many businesses, the challenge lies in the path to achieving these goals. Evaluating and consistently managing the “E” in ESG can be intricate, and maintaining control over energy suppliers can be a complex endeavor in terms of both costs and renewable energy consumption. Hence, there is a valid argument for organizations to concentrate on factors they can directly control and understand.
For any organizations selling and servicing products, a substantial portion of costs and carbon emissions is linked to production and post-sales services. This is where businesses can have a big impact on ESG initiatives by gaining a deeper understanding of product life cycles and maintenance needs.
Leveraging real-time field service management tools
Field service management (FSM) tools enable companies to be more sustainable and reduce emissions via improved first-time fix rates and remote triage and troubleshooting. This translates into fewer on-site visits, leading to reduced fuel consumption, more efficient dispatching, and heightened visibility within the supply chain.
This also allows for more effective parts management. While it may seem like common sense to have the right parts available in the right locations at the right times, executing this can be a costly and challenging endeavor without proper management. Monitoring customer machine performance in real-time using AI-driven predictive maintenance, for instance, can assist organizations in optimizing their service and parts operations.
One of the most obvious benefits is better planning, which means less costly knee-jerk emergency shipping of parts, a reduction in paper-based processes (which also means less errors) and a more optimized field service team of engineers.
But it is in improving product lifecycle rates where businesses can achieve significant financial and carbon savings. Each product has direct and indirect carbon impacts and there are lifecycle analysis (LCA) tools to measure this – it’s worth pointing out here that the Ellen McArthur Foundation warns against the short-termism of LCA measurements and not using them as the single source of truth. However, as the Foundation also points out, these tools can be valuable if used correctly.
This is important because you can only really manage what you can measure. Understanding how the life cycle of a product affects emissions is pivotal in determining where to focus efforts. Organizations can utilize FSM to manage processes such as reverse logistics and depot repair that enable products to be refurbished and remanufactured.
Closing the loop with asset data
Naturally, using performance data captured in FSM enables organizations to feed intelligence back to product designers, aiding in the improvement of energy consumption, product durability, and maintenance processes. For example, if a product is designed to facilitate easier part replacement or disassembly, it can lead to cost and carbon reductions.
Embracing a circular approach demands new thinking in product development, and FSM provides the means for organizations to understand the real-world impacts of change on customers. How customers utilize machines can significantly influence product life cycles and should be factored into any new development.
We now live in an age of data intelligence, and field service is no exception. FSM plays a pivotal role in analyzing and enabling, allowing organizations to make significant changes to how they operate. Pitney Bowes, for instance, reported a reduction in inventory by as much as $4.7 million after integrating data from its parts management system and FSM systems. Schneider Electric has also reaped substantial benefits from FSM implementation, achieving a 70% reduction in paper-based processes through digitalization.
As businesses embark on, or continue to refine, their ESG strategies, a deep understanding of product life cycles should be integral to the process. The principles of repair, reuse, and recycle should be applied whenever feasible. Service teams play a central role in this endeavor, and their ability to contribute to carbon reduction and bolster ESG initiatives hinges on the quality of their FSM data.