Committing to product performance and uptime through a lifetime service agreement has far-reaching implications, both for product design and field support operations. In the last of a three-part blog series, IFS considers the implications of delivering a cradle to grave service-based model in an increasingly circular economy.
In my previous two blogs we have discussed the shift to outcome-based revenues, and the need for quality improvements to produce longer lasting, better performing products. In this final blog in my servitization series, I’ll look at the ways servitization drives product design that is serviceable and can be cost-effectively maintained, and the ways technology like IFS Cloud helps to sustain a circular economy.
Designing for serviceability
Selling a product-as-a-service, as opposed to simply making and selling goods, has several implications. First and foremost, it means products need to be designed for serviceability at the outset. Gone are the impenetrable glued casings and ‘non-replaceable’ components. Servicing products efficiently requires design simplicity that increases accessibility and service speed, uses fewer, more standard interchangeable parts, and, if possible, leverages IoT monitoring to reduce the risk of unexpected failure.
Simplifying design also has business benefits for servitized manufacturers. Using fewer and more standardized service parts means that field technicians can be less skilled –a major advantage in today’s challenging employment market. With a smaller interchangeable inventory, component production costs are also reduced due to economies of scale. Technicians attending field service calls can be confident that the most frequently required service or repair items needed will be held in stock on the van.
Essentially it means manufacturing for service – and often a radical re-think. To help, IFS Cloud includes Product Data Management (PDM) capabilities, importing digital CAD drawings to manage the design and release process. Advanced revision management capabilities help to comply with complex regulations, with the solution flowing seamlessly through to product manufacture, asset management and servicing.
Re-use, Repair, Refurbish: embracing the Circular Economy
At the same time, the circular economy also represents a unique opportunity to support viable sustainability strategies. By engaging with a wider ecosystem, manufacturers can expand into entirely new markets, creating new revenue streams by focusing on business activities that preserve value from energy, labor and materials.
The 9R framework – Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle and Recover – can help to map the move from a linear to a more circular economy. In particular, Re-use, Repair and Refurbish approaches can eliminate or dramatically reduce the use of energy and production of CO2.
Take Volvo Group, for example, the world’s second largest manufacturer of heavy-duty trucks. The group is committed to both remanufacturing and recycling to reduce energy consumption, cut CO2 emissions, protect resources and eliminate waste.
By using IFS software to manage and analyze processes across eight remanufacturing centers, and orchestrate remanufacturing partner operations, Volvo Group’s Circular Operations & Solutions has been able to halve emissions and use just 20% of the energy required for new part manufacture.
Another way that IFS technology is helping is by maximizing the value chain within Volvo’ Group’s remanufacturing plants to create the highest possible salvage grade products. By visualizing historic data in IFS, engineers can see the optimum remanufacturing processes that should be applied, and necessary new components needed, to maximize quality and efficiency.
Remanufactured components are delivered with the same or higher quality as new ones, with a full warranty, often at a better price, to customers worldwide. Volvo’s Group’s current remanufacturing program operates with engines, filters, gearboxes and rear-axle transmissions, with future aims to cover more markets and more components.
In summary, materials usage during manufacture can constitute up to 45% of total production cost. Finding ways to reduce material consumption, and minimize waste and energy use, demands data-driven decision making. Leveraging enterprise technology solutions such as IFS Cloud can provide the granular insight and control needed to optimize production, extend product life cycles and develop new, service-based revenues as part of an environmentally sustainable business model.
For more information about the ways IFS Cloud can support sustainable manufacture, visit Ifs.com.
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