Keynote at Roland Berger Service 3.0 evening in Zurich 12 Dec 2014

Toolbox: Key organizational issues for services Keynote for Roland Berger’s Service 3.0 workshop, 12 December 2013

Dr Shaun West Lecturer for Service Innovation Blog: dokumenton.com

Manufacturing+and+services+are+different+and+our+customer’s+value+these+differences+

Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

Both'examples'from'GE'–'the'OEM'values'the'equipment,'the'service'business'values'experience+

Service+is+humanis<c+and+manufacturing+is+technocra<c+and+this+difference+creates+misunderstandings+in+product=based+businesses+


Manufacturing+ Service+

Mathieu++ Technocra<c;'Suppor1ng'product;'Efficiency'based'innova1on''

Humanis<c;'Suppor1ng'the'customer;'ClientRbased'innova1on''

Herrmann++ Factual' Emo<onal''

Kotler++ Tangible'goods'with'minor'services''

Service'with'minor'goods''

Bretani++ Separate'produc1on'and'delivery''

Combined'produc1on'and'delivery''

CoppeE++ Service'is'a'cost++ Service'creates'value++

Normman++ Complex'structures'' Simple'structures''

As'‘good'engineers’'our'ins1nct'is'to'the'technical'rather'than'the'human,'how'do'we'challenge'this?'

If'you'are'tac<cal'you'will'follow'–'if'your'culture'is'‘service’'you'lead.''Where'is'your+business+on'the'matrix?'

Benchmarking+of+your+business+and+your+compe<tors+posi<ons+on+Mathieu’s+matrix+is+important+for+service+excellence+


Tac$c% Strategic% Cultural%

Customer%services%

A"Toll&free"numbers"

Dell"on&line"

Toyota/Lexus"

Product%services%

Basic"extended"warran;es"

GE"Medical"systems"

Caterpillar"

Service%as%a%product%

Non&OEM"repairs" Fiat"in"IT" IBM"Global"

Services"

Organiza;onal"intensity""

Service"specificity""

Mathieu

Value+chains+for+manufacturing+are+not+the+same+as+for+services+–+the+service+value+chain+fosters+open+coopera<on+

The'differences'create'conflict'and'require'different'organiza1onal'structures'


Chesbrough'

Porter'

≠'

Can'you'iden1fy'the'pain+points+and'find'strategies'to'limit'their'impact?'

Services+Manufacturing+

The+installed+base+is+key+to+securing+service+–+it+is+paramount+that+you+have+names+and+addresses+


Do'you'know'who'buys'the'equipment?'Do'you'know'the'opera<ons/maintenance'team'at'every'loca<on?'

Maps.google.com'data'for'“power'sta1ons,'Germany”''

The+opera<onal+outcomes+define+the+markets+


Do'you'know'how'the'equipment'is'used'to'generate+value+for+your+customers?'

GE'published'data'for'Frame'9FA/FB'gas'turbines'

The+life=cycle+of+the+equipment+helps+you+to+iden<fy+poten<al+service+revenues+


0"

10"

20"

30"

40"

50"

60"

70"

80"

90"

100"

0"

10"

20"

30"

40"

50"

60"

,3" ,2" ,1" 1" 2" 3" 4" 5" 6" 7" 8" 9" 10" 11" 12" 13" 14" 15" 16" 17" 18" 19" 20" 21" 22" 23" 24" 25" 26" 27" 28" 29" 30"

Percen

t'

M'USD

'

Years'(note:'1'is'the'start'of'opera7on)'

CAPEX" OPEX"fixed"costs" OPEX""inspec>ons" Reliability" Usage"

Installa'on/commissioning.

Ini'al.spares.and.rou'ne.mtc.

Rou'ne.mtc.

Inspec'on/revision.

Upgrade.

Decommissioning.

Original.design.life.

Unplanned.outage..12M.USD.

Do'you'understand'your+customer's+cost+base?''How'much'of'the'life=<me+revenues+do'you'capture?'

What+is+the+impact+on+the+organiza<on+of+shiQing+to+services?+–+some+key+ques<ons+to+ask+<me+and+again…+

R  What'impact'will'the'cultural+changes+create?'R  What'changes'will'be'required'to'align'to'the'service+value+chain?'

R  What'has'to'be'done'to'track'the'loca<on+of+equipment?'R  How'can'the'employees'be'empowered'to'provide'reliable'outcome=based+informa<on?'

R  What'will'be'needed'to'fully'understand'the'equipment+life=cycle?'

R  What'tools'and'resources'are'needed'to'create'and'sustain'a'service+network?'


How'oQen'do'you'check'how'journey'into'services'is'progressing?''

Change'

Processes'

People'Culture'

Service+excellence+in+prac<ce+–+Caterpillar’s+service+model+

What+is+the+Caterpillar+model?+

R  Seed'R  ValueRbased'products'and'services'

R  Design'and'development'R  Grow'

R  Large'installed'base'R  Many'channels'

R  Harvest'R  Pursue'parts'and'services'R  Unmatched'dealer'support'

What+can+be+learnt?+

R  Culture'R  Customer'first'R  Value'products'and'services'equally'

R  Value'chain'R  Mul1Rchannel,'dealers'as'equals'

R  Installed'base/use'R  Know'where'it'is,'support'outcomes'

R  LifeRcycle'R  Driving'to'lowest'lifeRcycle'costs'


How'does'your'service'business'model'compare?'

Any+ques<ons?+


Caterpillar+in+prac<ce+–+they+are+able+to+deliver+what+their+customers+really+want+in+terms+of+outcomes+

What'is'tradi1onally'delivered…'+++++++sell'equipment,'parts'and'technical+services'hours+


What(our(customers(really(want…(What(we(tradi@onally(do(for(customers…( What'customers'really'want…'

'''''''is'to'achieve'the'outcomes'and'improve'the'boEom+line'results'

Outcomes'R  Beier'efficiency'R  Improved'revenues'R  Reduced'costs'R  Mi1ga1on'of'risk'R  Improved'safety'R  …'

Source:'Cameron'Ferguson,'Caterpillar'

They'are'able'to'deliver+services+what'their'customers'really'want'in'a'form'in'which'they'are'willing'to'consume+

Produk<nnova<on+|+Management+Competency+Centre+at+the+Lucerne+University+of+Applied+Sciences+and+Arts+


Dr'Sabine'Sulzer' Peter'RadcliffeRLunn*'Markus'Raschke' Dr'Christoph'Imboden' Fabio'Mercandel*'Dr'Shaun'West'

Innova1on'research'and'its'impact'on'business'models'and'people'R  Direct'mandates'and'KTI/SNF'sponsored'research'R  Student'projects'–'PhD,'Master,'bachelor'or'industrial'projects'

Education

Keynote at Roland Berger Service 3.0 evening in Zurich 12 Dec 2014