Converting data into services

Many companies are still looking for the best way to cope with data and to extract value from them. Having a strategic plan to use data as part of your business model is the first step and the best way to guarantee results. By defining and gathering appropriate actions, you can maximise the impact of data on your shareholders or your company’s value creation. Of course, (raw) data on their own do not create value. The goal is to implement an integrated approach of data acquisition (physical and virtual “sensor” data), data storage (metadata), data processing (refined data) and decision making (learning and reasoning), which leads to actionable insights and creates an impact on your products and/or production processes.

data-to-service

Depending on the business model, a company can choose different routes to success, as depicted in the figure below. The most promising and profitable business model is that of the “value-added partner”. Companies with this type of business model are:

  • Helping their customers to focus on their core business.
  • Helping their suppliers to optimise their product/production performance, efficiency and related costs.
  • Providing their suppliers with fleet data (data from products installed at different customers in different locations in different contextual situations), which generates valuable insights into product usage (e.g. speed & torque profiles), impact of contextual situations (e.g. humid, high-temperature or dusty environments) and changes in product behaviour over its lifespan.

data-to-service-1

The availability and proper analysis of the resulting data generates:

  • Insights in market needs and product usage;
  • Insights into opportunities to optimise the product design to better fit its use (e.g. lower weight, lower need for potential speed profiles, setting less demanding requirements to components);
  • The creation of product platforms with tailored options based on customer usage;
  • Inputs to acceptable criteria for service level agreements. As such, the contribution to sustainability is obvious as new products will have an optimised weight and material usage, consume less energy, have a lower CO2 footprint and will be better fitted for upgrading and remanufacturing.

Service offers lead to success faster

We expect that service offers will lead much faster to measurable success. What is needed to capture the corresponding value?

  • By using processed/refined data, you improve your forecasting and decision making, which makes you a value-added partner for customers;
  • By using automation based on domain knowledge, sensors and artificial intelligence, you create context-aware, adaptive, self-organising machines that not only optimise your plant’s performance, but also improve its efficiency and even lower the fault rates of your machinery;
  • By ensuring connectivity both within (internal) and beyond (external) your plant, you ensure that your services are always “on” and continue to be self-learning in an explainable, predictable and robust way;
  • By agreeing on customer access through a cyber-secure connection for bi-directional interaction and co-creation within mutually trusted parties.

Converting data into services

It should be clear that converting data into services will not happen overnight, but gradually, depending upon the availability or development of relevant capabilities (see figure below). It all starts with the collection of data, which are then used to improve product and production processes. Subsequently, the generated insights will enable design and development changes for an improved performance versus price ratio. Finally, data captured and processed by various companies and in various sectors can be made available and transferred to other companies, leading to better products and production processes. (Predictive) Maintenance and field services in general are really benefitting from these actionable data as they allow to upgrade products and production systems in due time and within a pre-programmed timeframe that is compatible with the production planning or the use of the product by the customer. As a result, the operational efficiency will also improve significantly. Finally, over time, as an increasing number of insights are generated, the value proposition will continuously improve, leading to better services.

data-to-service-2

Pitfalls

Although the latter presents a huge potential for many companies, you must avoid getting lost within the multitude of possibilities offered by many different partners. It is crucial to select the right partner from the start. A partner that offers services that are in line/compatible with your own maturity (data occupation) level and that guarantees gradual improvements focusing on your customers’ needs and the required services. It should also be clear that you need to invest in appropriate personnel for this task. He/she should be able to establish a good dialogue with the selected partner and understand its offer while linking it to your own offer to the market.

Industry 4.0 report

Do you want to know more about using data in your business? Be sure to download our Industry 4.0 report! Fill in the form below and we will send you the report via email.

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Dirk Torfs - CEO
Auteur

Dirk Torfs - CEO

Dirk Torfs is CEO of Flanders Make since 2014. Dirk is a Civil, Mechanical and Electrical Engineer as well as a Doctor in Applied Sciences (KU Leuven). He has over 20 years of experience in management positions in the Flemish industry and is Professor of Quantitative Decision-Making for the Executive MBA programme of the Flanders Business School.

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