Continuous improvement processes can follow two paths: internal productivity improvement or external customer value creation. Since both approaches will yield significant benefits, it is not advisable to choose between them, yet many companies inadvertently make the choice every day. That is why this article’s title is “Does Your Product Improvement Process Include Field Service Data?”
Internally-focused Product Improvement Processes
This area encompassed Kaizen, value analysis, cost reduction, inventory reduction, tooling, capital equipment utilization, and maintenance. All these programs aim to eliminate waste as completely and inexpensively as possible. We have all participated in these activities, so there is no value in repeating what we already know.
Externally-focused Customer Value Creation
I frequently write that people buy tools and equipment and hire additional workers or consultants because they believe the value they create for their company will exceed the cost of their expenditures. Part of your job, primarily if your organization produces and sells complete products, is continuously increasing product reliability, making it easier for customers to use all the features they purchased, and reducing as much downtime as possible.
Part of your customer value creation process is ensuring that Marketing specifies the best product that creates the most customer value. Another part is ensuring that Engineering designs the best product for your customers. Of course, Manufacturing must build the product to be as high-quality as possible to help the customer achieve their objectives. However, all these things are internal to your business, and the real action happens after the customer starts using what they purchased.
This is where Service joins the process.
The Role of Service in Creating Customer Value
While doing their daily jobs, the service organization gathers much information and turns it into data. Analyzing all the data can result in a great deal of actionable insights. For example:
- Technical support can collect specific operator questions and issues while identifying the product type, what the customer was trying to do, and how long they have used it.
- Field service collects information about product failures, failed parts, and the software actions that caused downtime. This is the start of a genuine product improvement process.
- The repair depot, run by either Service or Manufacturing, troubleshoots each returned part and identifies the failure mode. If the machine is instrumented correctly, how long did it operate before failing? They also identify parts that have not failed (NTF – No Trouble Found) and can highlight areas where troubleshooting procedures have to be improved. NTFs are a major customer annoyance and a significant cost for the overall Service operation.
Best Practices to Improve Product Reliability and Create Greater Customer Value
For OEMs, the best practice is to follow a methodology like this:
- Create a standing committee for product and process improvement consisting of representatives from Marketing, Engineering, Manufacturing, Technical Support, Field Service, Returns Repair, Logistics, and Quality. A Finance or Sales Department representative should be invited to meetings if necessary. The chair should either represent the Quality or Marketing departments. The representatives should all be senior enough to speak for their department and commit resources as appropriate to address the issues prioritized by the Committee. Minutes should be issued promptly after each meeting, and distribution should include the entire Executive Committee. Each scheduled executive team meeting should consist of a discussion of the latest committee report, and each operational department should have a budget for taking action to fix identified issues.
- Collect as much data as possible concerning customer issues and equipment failures. Include identifying the action taken to solve each problem in specific terms—this is the root cause analysis. The Standing Committee must review this data.
- Along with the previous data, it is essential to identify all internal and customer costs. Customer costs include downtime, lost productivity, overtime to recoup lost production, and even lost business. Internal costs include call center and technical support, field service labor and overhead costs, shipping, material handling, inventory carrying, and repairs or scraping and replacing a defective part.
- As cases are closed, the Committee should publish a summary report with a complete picture of all internal and external costs. The objective is NOT to point fingers at any person or department but to make it easier to spend money up front to prevent problems instead of spending it after the fact to correct issues.
OEMs must systematically address field failures and proactively work to implement a robust product improvement process to prevent these problems from manifesting themselves as new products are released to customers.
For another use of post-shipment data, read 3 Types of Post-Shipment Data to Use For Cost Reduction Improvements.
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals whose primary goal is to help capital equipment companies create more value for their clients and stakeholders. We continue to provide superior solutions to meet our clients’ needs by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization identify and use post-sales data for cost reduction and other improvements, please contact us or check out some of our free articles and white papers here.
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