Service as a Knowledge Intensive Activity

HSC-8 Technician (U.S. Navy photo)

The Product Service Challenge

Maintaining, servicing and repairing complex products have been a longstanding challenge. While much has been written on service metrics and performance indicators, it’s worthwhile highlighting some facts and figures. The following anecdotes are from various research studies I conducted in various discrete manufacturing sectors and additional sources:

  • Auto dealership repair shops are able to fix about 80% of cars during the first customer visit. While about third of the dealerships are able to deliver 90% or better first time fix (FTF) rate, nearly 20% of all dealership can manage only FTF of less than 70%.
  • When auto repair activities are scrutinized by the automakers for warranty reimbursement and qualify improvement, 37% of the replaced parts do not exhibit any problem and are identified as “no fault found” (NFF).
  • In commercial aviation, approximately 40% of mechanical parts and 60% of avionics parts are classified as NFF.
  • Consumer electronics manufacturers, wireless carriers and electronics retailers spend an estimated $17 billion to receive, repair, restock and resell returned merchandise. Nearly 70% of these returns are characterized as NFF, amounting for about 15% of the total loss resulting from product returns.

The financial burden incurred by product service and the critical influence poor service has on brand image and customer loyalty lead product companies and service organizations to make significant investments in developing diagnostic tools, training and service manuals. However, many service organizations report seeing only modest return on those efforts.

The Outcome Based Economy

Over the last 3 decades, the role of product service has gradually evolved from an activity to support product sale revenues and protect customer loyalty to having a greater role in the company’s revenue stream. Most service organizations have migrated from pure “necessary evil” cost centers to selling extended service contacts and even offering billable services for competitive equipment.

Forward looking brand owners and product companies are undergoing an even more radical change, shifting the center of gravity from physical products and functional specifications to thinking about outputs and performance metrics that are better aligned with their customers’ business. Much has been written about the concept of “power by the hour” as a prime use case of this strategy. While this example may be a tad worn by now, it is a good example of the outcome based economy, which is highly dependent on the ability of the brand owner to deliver effective and efficient service.

Yet, service challenges persist.

When a Problem Strikes

Service technicians responsible for the maintenance and repair of complex equipment encounter non-routine diagnostic and repair challenges at a growing rate. Multiple intertwined factors contribute to and exacerbate this phenomenon:

  • Product complexity. Virtually all contemporary products, from consumer devices to complex machinery are becoming more complex and function-rich, requiring more expertise than ever before to understand their operation and how to effectively diagnose and repair them.
  • Software driven configurations. The transformation from hardware to software-based systems enables enhanced and greater functional density while containing cost and physical size. At the same time, the proliferation in product options and variants adds to operational and diagnostic complexity.
  • Improved reliability. Although software based systems help reduce parts count and improve overall reliability, the combination of many one-off configurations and higher reliability reduces the level of practical experience service technicians accumulate and share.

This situation is only getting more challenging. In a study I conducted among auto dealership technicians, they indicated that 62% of service incidents are not immediately obvious and require extra information to determine the root cause and corrective action. Among independent automotive technicians, the number was higher: 74%.

But it’s hard to put the blame squarely on the shoulders of service technicians. The design, engineering and manufacturing of software-intensive and configuration-rich products has its challenges. These products are extremely difficult to test thoroughly, as is evident by the increasing number of software related recalls. Consequently, developing training materials and service information that will account for all potential failures under an infinite number of configurations and conditions is virtually an impossible task.

And to wrap up the discussion about challenges in equipment service lifecycle management, it’s important to recognize the dynamic and highly responsive environment of product lifecycle and the many changes complex equipment will undergo while in service. Over time, normal wear and tear, operating patterns and conditions, and even routine maintenance practices not only change the frequency of failures, but could also expose new failure modes. In parallel to this dynamic, software updates and other product improvement reduce the frequency of familiar failure modes or eliminate theme completely (but could also introduce new one inadvertently.)

Equipment Service is a Knowledge Intensive Activity

Service lifecycle management and service operations entail multiple structured and transaction-centric activities such as service level agreements, workforce management and policies, and inventory management.

However, as the detailed in the discussion of the challenges of equipment maintenance above, diagnostic and repair activities are first and foremost knowledge intensive activities.

When determining the possible root causes of a symptom and devising a commensurate diagnostic strategy, a technician uses knowledge of the operation and failure mechanisms of the equipment, previous experience handling similar (but not necessarily identical) failures, and the specific configuration and history of the equipment being repaired.

The high number of product variants and their structural and operational complexity prevent most technicians, especially the less experienced ones, from utilizing what’s known as “diagnosis from first principal”: using deep knowledge and theory of operation to infer the symptom’s root cause and initiate a corrective action.

Closing the Service Knowledge Gap

To improve service performance, companies should view service lifecycle management (SLM) as much more than a suite of tools to manage service transactions and part inventories. They must think in terms of managing service knowledge and closing the ever-present service knowledge gap.

Key to SLM is managing all of the product structures and variations together to ensure that all product and service knowledge are linked, managed, and configurable. The product and service organization should create a digital backbone that ensures consistency and accuracy of information throughout all bill of material (BOM) variations for current and future product: as-built, as-configured, as-installed and as-maintained.

SLM as an Integral Part of the PLM Process

Service knowledge and knowledge communication tools such as training, service information and technical support must continually maintained and updated to reflect critical field operations information. Traditionally, these lessons learned focused on analysis of service operations and warranty claims, but as the use of the Internet of Things (IoT) for remote monitoring and diagnostic expands, it will offer yet another source of valuable information.

PLM is the overall governance and knowledge management process to maintaining the linkage between product design and configurations, and the fielded product’s operational and service performance.  PLM as the digital information backbone and product BOM as the knowledge organization principle, product companies can optimize service operation, improve product quality and accelerate the deployment of effective product service.

[Image source: United States Navy]