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Streamline operations across the entire service
chain
Dr Howard Lightfoot – Cranfield UniversityLo Hintzen - Salesforce
Forward-Looking Statements
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www.cranfield.ac.uk
Servitization
and
Technology Enabled Service Delivery
Dr Howard Lightfoot21st March 2017
Operations Excellence Institute
A Changing Manufacturing Landscape
Operations Excellence Institute
In Depth Case Studies
4 yrs
Knowledge from previous studies
Understand leading practices and technologies
Su
rve
y o
f 400 U
K
co
mp
an
ies
Knowledge from previous studies
Operations Excellence Institute
Servitization Explained
Operations Excellence Institute
Competitive Strategy
Customer Intimacy:.
Combining detailed
customer knowledge with
operational flexibility. You
are creating the best
total solution for the
customer
Product
Leadership:
you sell the best
product on the
market
Operational Excellence: you have your
processes so under control that you
deliver best total cost to your customers
Adapted from Treacy & Wiersema, 1997
Threshold
performance –
Industry Standard
Operations Excellence Institute
Traditional Product Purchase
Cash
Technology
Service
Use
Monitor
Cash
Consumables
Selection & disposal
Operations Excellence Institute
Purchase of Capability / Outcome
Use
Cash
Disposal
Cash
Technology
Service
MonitorConsumables
Operations Excellence Institute
..an emerging picture of the Servitized World
Contract
Product
Monitoring
Servicing
Disposal
Touch points
Partners
The Product P
rod
uct
in U
se
OEM
Spares
Services
To
OEM
To
spares &
services
Spares
Services
Manufacturer Suppliers
Operations Excellence Institute
Service Types
Advanced services
Pay Per Use
Fleet Management Availability contract
Integrated solution
Intermediate services
Repair
TrainingCondition
monitoring
Help Desk
Field service
Overhaul
Equipment Spares
Base services Incre
asin
g
~ Responsibility and risk adoption
~ Customer revenue and lock-in
~ Servitization of OEM
~ Sophistication of PCS
Operations Excellence Institute
Enabling Technology
Transducers
Data storage
Fault code
generation
Fault code
recording
Continuously
sense critical
systems and
subsystems of
asset
Base data
Fault code data
Satellite, cell
phone, GPRS,
radio, Internet
Hard
and soft
storage
system
State
and
trend
analysis
Get more dataMake
contingencies
Repair/ replace
Inform customer
Modify design
Periodically
communicate
with home
Compile
historical
records
Diagnose and
predict
behaviour
Determine
appropriate
interventions
Technology systems focused on informing and
advancing actions on maintenance, repair and use
Monitor Transmit Store Analyse Respond
Operations Excellence Institute
Now let’s look at some
Industrial Case
Studies
Operations Excellence Institute
Business Examples
• Rolls-Royce TotalCare®
• ‘Power by the Hour’.........
• Airline operators pay per flown hour
• Long term contracts with pre-defined
patterns of operation
• “piece of mind”
Rolls-Royce (Civil Aerospace)
Operations Excellence Institute
Business Examples
Alstom Transport
West Coast Main Line
• 47 of 52 Pendolino Class 390
EMU trains available
everyday’
• 1000 miles per day per train
with narrow daily window for
maintenance / repair
• Fundamental KPI - Lost
Passenger Hours
Northern Line (London
Underground)
• 91 underground trains with 3
Spare trains available everyday’
• Mean distance between failure
14000Km / train
• Fundamental KPI - Lost
Passenger Hours
Operations Excellence Institute
Business Examples
Xerox (Document Outsourcing)
• Document services optimising client print
infrastructure
• Life cycle management – people, technology, service
operations
• Reducing the total cost of ownership
XEROX
Operations Excellence Institute
Not just high value capital equipment !
Operations Excellence Institute
Industry Boundaries
Operations Excellence Institute
The Internet of Things - IoT
The Internet of Things is still in early stages of adoption
IoT enables real time data collection from assets in the field
More objects are becoming embedded with sensors and gaining the ability to
communicate
The resulting information networks promise to create new business models
It is no longer the industrially manufactured product that is the focus, but rather the
service that users access through that device
Operations Excellence Institute
SMART CONNECTED PRODUCTSSmart Connected Products
Operations Excellence Institute
What are they?
A ’Smart’ product comprises:
Physical components: the product is composed of mechanical,
electrical, and other material components.
Smart components: comprising microprocessors, sensors ,
software, controls and data storage with an embedded operating
system and user interfaces.
Connectivity : via ports, antennae, and protocols enabling wired /
wireless connections allowing data to be exchanged with the
product. The connectivity may be point to point, hub and spoke or
as part of a network of products
What Are They
Operations Excellence Institute
What can they do?
The connectivity and intelligence of smart connected
products enable new functions and capabilities, which are
generally grouped into the following four categories:
Monitoring of a product’s operating characteristics,
condition and history and its external environment
Remote Control using remote commands or algorithms
that can be embedded in the product or in the ‘product
cloud’
Monitoring product data combined with the ability to
remotely control the product and provide Optimization
capability in terms of output, utilisation and efficiency
The previous functions can be combine to provide the
product with hereto unattainable levels of Autonomy
What can they do
Operations Excellence Institute
Tesla Motors Automobiles – a smart product with an intelligent maintenance
system that periodically monitors itself.
Philips Lightning Hue Light Bulbs and Bridge – provides users with a connected
device for home automation..
Joy Global’s Longwall Mining System – able to operate autonomously
far underground, overseen by a mine control centre on the surface.
Medtronic’s Continuous Glucose Monitoring (CGM) – a smart device with
wearable technology
Babolat’s Play Pure Drive Racquet System – a smart product that looks like a
regular racket
Some Other Examples other examples
Operations Excellence Institute
New Technology Infrastructure Infrastructure
PRODUCT
EXTERNAL
INFORMATION
SYSTEMS
BUSINESS
SYSTEMS
INTEGRATIOM
CONNECTIVITY
IDENTITY
SECURITY
PRODUCT
CLOUD
Applications Rules / Analytics
Applications Platform Product Data Base
Operations Excellence Institute
Industry Boundaries
+
+
+
Product Smart Product Smart Connected Product
Product
System
Industry Boundaries
Streamline Operations Across the Entire Service Chain
Salesforce for ServiceLo HintzenHead of Service Cloud
Together, We’re Building a Path Forward
2009 • 2010 • 20112012 • 2013 • 20142015 • 2016 • 2017
September 2016
2011 • 2012 • 20132014 • 2015 • 2016
The world’s most innovative companies
in GDP impact by 2020
$389B
$8.39B FY17 revenue
25K employees
“Innovator of the Decade”
IDC White Paper, sponsored by Salesforce, "The Salesforce Economy," August 2016
2M jobs created by 2020
IoT
AI
Social
Mobile
Cloud
LAN/WAN
Client
Server
SNA
Mainframe
Terminal
The Age of the CustomerEverything and everyoneis connected
MillionsThousands Billionsconnected things of customer interactions
Trillions
Todays Customer Profile
Social
Mobile
Connected
High expectations – service experience: EFFORTLESS
IoT and Servitization
Customer Behavior and Demand, drives use of new Channels and Business Models :
1. Include new channels
2. Move from product to service
IoT – A new channel for your service business
Service delivery :
• No longer only performed by people
• Inclusion of Bots - pre scripted questions – gain basic understanding before passing to human
• Machine2Machine – collecting data that triggers actions in the service organisation: case creation – technician tickets
ProactiveserviceResponsive PersonalizedDigital
Smart-enabled
Customer-CentricProduct-Centric
Focused on driving internaloperational efficiency
Gap Between Companies and their Customers’ Expectations
Expect high levels of personalized service
Servitization can close the gap….
Salesforce Customer Success PlatformSales ServiceMarketing AnalyticsCommunity Apps Commerce IoT Quip
force.comHeroku
ComponentExchange
Data Management Platform
CRM DataIoT & Social
Data
Platform
AppExchange
high-performing IT
teams are more focused
on innovation
2.3X
• Secure, multi-tenant cloud platform with AI built right in
• 99.98% FY18 availability
• 9 global data centers
• 3 major, automatic & seamless updates per year
`
Salesforce for ServiceThe world’s #1 intelligent customer service platform
Personalized
Personalize every service
conversation
Make agents, managers & mobile
workers more productive
Use Intelligence & AI to make agents
smarter & customers happier
Productive
Predictive Connected
Connect on one intelligent
platform
An agile layer of engagementDelivering rapid time to value and strong ROI
Extend the capability of existing Systems of Record
Intelligent processing filter incoming data with rules and then develop insights that drive better decisions
Overcome Silos that get in the way of delivering the desired Customer Experience
Faster Path to help you achieve targeted improvements & keep up with pace of change in customer & industry expectation
Systems of RecordOptimized for Transaction Processing
System of Engagement / Agility Layer
Integrated Console
MobilityIoT
Connected Applications
OmnichannelCustomer
Experience
Core Operations Workflow
Acceleration
Faster Time to Value
SAPMicrosoftDealer
ApplicationsLegacy HRIBM IFSLegacy CRM
Oracle
Not only does Salesforce seamlessly integrate 3rd party systems systems…it
also creates an all-encompassing social layer of agility and engagement to
power your applications
Customer Examples
Transactions per day
4.3B+
Transactions via API
50%Faster Deployment
47%
Transform connected products into engaging experiences
Engage through customer journeys
Automatic Reorders
Alert Service reps of immediate issues
Integrate External Data Sources
Connect to custom processes
CRM Added Services
Enable partners with communities
Build Connected Apps
Embed Intelligence to identify patterns
Create business value by wrapping connected devices with engagement services
Our Customer Trailblazers are Redefining
Customer Success+35%
Customer
Satisfaction
+28%Agent
Productivity
+31%Faster Case
Resolution22%Cost
Savings
Source: Salesforce Customer Relationship Survey conducted 2014-2016 among 10,500+ customers randomly selected. Response sizes per question vary.
Thank Y u
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