Selling Services: How OEMs Can Use Smart Data to Generate a New Revenue Stream

Enabling “smart” technologies and capabilities across the plant floor is top of mind for nearly every manufacturer. These solutions generate a gold mine of data that organizations are desperate to turn into actionable insights, and with good reason. According to research from McKinsey & Company, leveraging smart data analytics can improve manufacturing efficiency by nearly 20%. OEMs have a unique opportunity to help their customers achieve their data goals and generate an entirely new revenue stream.

By packaging smart data feeds, including PLC and edge devices that collect both historical and real-time information, OEMs can provide additional value to their customers with new data services that deliver on the demand for actionable insight. From next-generation remote access to performance analytics and predictive maintenance, the future of an OEM’s business is about more than selling a product but selling a smart data service.

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This approach is a significant departure from how OEMs have operated in the past. Beyond just the initial product design and sale of a smart machine, this method can deepen the customer relationship and provides an opportunity for recurring revenue—especially as data is incorporated for future machine design enhancements. Building these capabilities and technologies into their platforms can essentially allow customers to “self-serve” and proactively identify potential machine or performance issues. These capabilities can set an OEM apart from the competition and help to establish long-term customer relationships. 

Following are four key areas where OEMs can leverage smart data feeds to unlock new revenue streams:

1. Performance Analytics

As any OEM can attest, the ability to continuously monitor products in the field is critical. Tracking performance and staying on top of monitoring load changes, output currents or any machine abnormality is paramount to troubleshooting issues. One crucial element that OEMs can impact right off the bat is monitoring machine profile set up and tracking for any changes by the operator. These adjustments may not be optimal and getting ahead of the potential performance issue not only ensures the output remains on track but also flags a training opportunity for the operators. As OEMs continue to collect and evaluate performance and runtime data, this insight can be further incorporated into future product development and machine design.

2. Predictive Maintenance 

Understanding when something might break down before it happens might seem far-fetched, but with sensors and other smart technologies, predictive maintenance is no longer a novel idea. By collecting and analyzing data from connected machines and devices, OEMs can proactively address when machine failure may occur. This enables you to alert your customer and recommend specific maintenance steps to eliminate potential downtime.

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For example, vibration sensors can detect when a machine might be operating outside effective parameters and could need maintenance. Other sensors can compare total runtime against runtimes for similar machines and send alerts if machines are approaching a typical service interval.

3. Remote Access

The ability to remotely log in to a machine and troubleshoot problems is not a new concept either, but as cost pressures, machine uptime and efficiency have become more critical, this feature has quickly turned into a must-have for end-users. Consider the process for addressing machine issues without remote access. When a machine goes down, if the end user can’t fix the issue on their own, they’ll need to contact the OEM and wait for a technician to travel to the site, identify the issue and fix it.

Clearly, this process is not efficient. Depending on the machine’s location and technician’s availability, the impact of the downtime and lost productivity could be significant. Adding remote access capabilities can greatly streamline the process. A technician can log in from virtually anywhere, diagnose the issue and walk through how to resolve it and get the machine back up-and-running.

With next-generation remote access capabilities, not only can OEMs enable their customers to rectify issues more quickly and save costs but get a firsthand look at the issue to incorporate into machine design for the future. 

4. Overall Equipment Effectiveness (OEE)

Maximizing OEE is a priority for any manufacturing process and many firms spend precious time and energy on maximizing this metric at (almost) any cost. But identifying the root cause for any loss in runtime isn’t always easy. For example, let’s say your customer makes side mirrors for a large auto manufacturer and their overall OEE has declined.

Does the issue lie with your machine or another piece of equipment in a different part of the manufacturing process? Could poor quality materials be responsible for performance or quality drops? The ability to provide information back to a manufacturer about lost performance can help them address and improve OEE. By communicating the full picture to the manufacturer, you can enable them to operate consistently and reduce downtime. As a bonus, this capability can help position an OEM as a value-added provider.

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Collecting and leveraging all of this smart data also benefits your operations by setting the stage for the future of machine design. For instance, equipping products with the right parts that empower smart capabilities or enable data collection can make all the difference in the next sale.

Consider asking, “Am I designing the right pieces of equipment that can capitalize on smart machine capabilities?” and “Can these capabilities extend into new data and revenue streams?”. If yes, then you’re well on your way to capitalizing on the demand for data. By contextualizing and packaging the insights into something more meaningful, OEMs can turn smart data into a competitive differentiator and a service-based revenue stream.

This article was submitted by Scott Dowell, senior vice president and general manager, U.S. Industrial and CIG, Wesco.

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