In a recent blog post, we thoroughly explored the concept of servitization. Now, we'll use a leading global manufacturer of heavy construction equipment as a case study to illustrate how a successful servitization process can be initiated and implemented.
Let's start by defining servitization. Essentially, it involves presenting services from your own company or brand as if they were products. In practice, servitization combines products and services to create mutual value for both the offering company and its customers.
How is Huisman revolutionizing services in its industry?
What do customers expect from Huisman today?
What are the objectives of Huisman's digital customer platform?
How does the myHuisman service portal cater to customer needs?
What do the specific modules within the service portal offer?
How do manufacturers benefit from the servitization approach?
What can e-commerce technology contribute to a successful servitization process?
How is Huisman revolutionizing services in its industry?
The Huisman company, in operation since 1929, has grown into a global manufacturer and designer of cranes, wind turbines, oil and gas drilling rigs, special ships for laying subsea pipelines, and other specialized equipment. Notably, Huisman takes pride in having designed the two largest cranes globally. Besides its predominantly customized and highly complex products, Huisman offers an array of services including spare parts, maintenance, repair, training, and consulting.
Prior to 2019, Huisman, like many in the maritime industry, lacked an online platform for its customers. In response, the company introduced myHuisman, marking the world's first service platform in this sector. While the company acknowledged that this project would yield a competitive advantage, its primary objective was to deliver genuine added value to customers.
What do customers expect from Huisman today?
Huisman aims to be a genuine partner for users of its systems, recognizing the growing preference among customers for comprehensive solutions rather than mere product transactions. For Huisman, providing total solutions, comprising products and associated services, holds significant importance for several reasons. The manufacturer's equipment is typically bespoke, with costs often reaching millions of dollars. These systems consist of thousands of individual components and boast a service life exceeding 30 years, necessitating continuous monitoring, routine maintenance, adjustments, repairs, and the replacement of components.
Given the harsh conditions in maritime environments – exposed to moisture, salt, corrosion, fluctuating temperatures, and strong physical forces – wear and tear are inevitable. The failure of such a system could incur substantial costs, easily exceeding several hundred thousand dollars per day. Thus, it becomes imperative to prevent unplanned downtime from the outset by closely monitoring ships, superstructures, cranes, and drilling platforms, coupled with regular maintenance practices. This task is inherently challenging as the platforms of oil and gas companies or offshore wind power plants are situated on the high seas. Specialized ships, crucial for tasks like laying pipelines, have limited time at the quay. Predictive maintenance emerges as a critical strategy, recognizing that specialists and materials cannot be mobilized to remote locations overnight.
What are the objectives of Huisman's digital customer platform?
Huisman faces considerable challenges in maintaining, modifying, or repairing its intricate systems, given their inherent complexity, variable operational locations, extensive component count, and the necessity to coordinate spare parts and engineers on a global scale. To surmount these hurdles, Huisman undertakes the comprehensive task of gathering, organizing, and interconnecting vast amounts of information about its products, offering accessibility through Intershop's digital service portal.
This robust e-commerce platform, hosted in the cloud, possesses the capability to store, process, and intelligently link vast datasets globally. Huisman's portal encompasses diverse data sets, including customer and product details, order histories, maintenance and service documentation, instructions, sensor data for wear parts, 3D graphics, animations, photographs, videos, construction plans, and internationally recognized certificates, among other critical information.
How does the myHuisman service portal cater to customer needs?
Huisman delivers a range of services to its customers through the myHuisman service portal, organized into distinct areas or modules. These encompass an online spare parts shop, a technical library, inquiry handling, project management, and a dashboard providing insights into the technical performance of the equipment. Huisman employs a strategic methodology across various phases throughout its product life cycle, spanning sales, design, manufacturing, international certification and training, and ongoing product-related services. Given the prolonged service life of Huisman's systems, the service phase may extend over several decades, presenting unique challenges for its customers – predominantly large international companies with multiple sites, plants, or vessels.
In a recent Intershop Talk recording, Dirk-Jan Goudswaard, product owner at Huisman, and Christian Kriesels, software architect at Huisman, delve into the challenges of Huisman's servitization (click here for the recording). They highlight the complexities engineers on a ship face in ensuring the smooth operation of systems. For instance, if they identify a component on the crane system requiring replacement due to wear or corrosion, they capture a photo and email it to the responsible buyer at their company's headquarters on the mainland, along with a message specifying the required action. However, this process poses challenges for the buyer, leading to a high probability of errors.
What do the specific modules within the service portal offer?
The online shop module for spare parts
The initial segment of the customer portal is the spare parts shop, designed to be tailored to each customer and their specific systems. Centralized storage of exploded views and other system-related documents in the service portal facilitates collaborative real-time identification of precise spare parts by engineers and purchasers, regardless of their locations. The process is seamlessly executed through an online connection, eliminating the hindrance of large distances. Once the component is precisely defined, the myHuisman portal promptly supplies additional details such as availability, prices, and potential delivery dates. Timely deliveries hold paramount significance for Huisman customers, given the costly nature of downtimes and the logistical challenges of transporting goods to remote locations or harbors, necessitating meticulous planning.
The technical library module
“We are legally obligated to provide an extensive documentation package with every installation,” explains Christian Kriesels. “Typically, this information is stored at a customer's branch office. Over a 30-year service life, numerous documents are generated for each system, including service reports for maintenance or repairs. Some originate from us, while others come from third-party suppliers whose components are integrated into our systems. For our customers, managing all this information and keeping it constantly updated represents a substantial undertaking – we're dealing with terabytes on a regular basis,” notes the software architect.
The new service portal simplifies access to all this information. It is well-organized, indexed, adheres to standardized formats, and, most importantly, consolidates everything centrally. Cloud storage ensures accessibility to this information base at any time and from any location, provided the user has the appropriate authorization. Customers can autonomously assign these authorizations to their employees, ensuring each individual can only access data pertinent to their role. “Whether it's upcoming maintenance tasks, service reports, price lists, order histories, or the interpretation of error codes – everything is now easily retrievable, and all involved parties share the same knowledge base. This significantly saves our customers both time and money,” explains Kriesels.
The enquiries module
Customers can leverage the enquiries module within the service portal to schedule Huisman engineers online for on-site inspections or other tasks. Additionally, Huisman provides the option of employing remote assistance. “In a typical scenario, one of our engineers connects to a system on a customer’s ship, allowing them to virtually observe the on-site technician while they perform specific tasks,” describes Goudswaard.
Another aspect of the module is handling content-related support enquiries, with Huisman receiving thousands of them annually via email or telephone. A challenge arises as Huisman's systems are often managed by multiple teams in rotation, and these teams don't always share the answers to enquiries with each other. To enhance transparency, Huisman archives all enquiries and responses, making them accessible to customers through the portal. Additionally, there are plans to implement artificial intelligence (AI) to expedite and optimize the processing of enquiries.
A notable feature in Huisman's service repertoire is inspections conducted using aerial drones. Instead of dispatching an engineer across continents to a plant site, the company deploys a drone equipped with high-resolution cameras to capture thousands of images of the entire object remotely. These images undergo analysis using an AI engine developed by Huisman, and the results are then transmitted to the customer. If the inspection indicates a need for action, the customer can promptly address the issue, with the option of remote assistance from Huisman if necessary.
The projects and dashboard modules
Within the projects module of myHuisman (to be launched end 2024), customers will have real-time online access to information about new build and modification projects in the design or production phases. They can track various aspects of the project, including responsibilities, achieved milestones, planning, budget status, and more.
The dashboard module, currently in the pilot phase, comprises diverse tools accessible to both Huisman and its customers. These tools enable graphical monitoring of operational performance of Huisman's systems. Christian Kriesels explains, “This allows us to detect potential issues at an early stage and address them before they escalate – predictive maintenance. Thus, we ensure seamless system functionality without unplanned downtime.” To achieve this, Huisman products are equipped with sensors that capture relevant data and transmit it to the service platform. Here, the data is instantly and continuously digitally analyzed, with results displayed on the dashboard. The Internet of Things (IoT) is already a reality in this context.
How do manufacturers benefit from the servitization approach?
The provision of a service portal for customers along with the associated process of servitization presents a range of clear and quantifiable benefits for companies. Here is a selection:
Recurring revenue: Instead of relying on one-off transactions during product sales, manufacturers can generate long-term revenue, for example through service contracts or subscription models.
Closer customer loyalty: By offering after-sales services, they can increase customer loyalty, generating repeat business and a longer customer lifetime.
Differentiation from competitors: Servitization enables manufacturers to offer unique added value. This sets them apart from competitors who only sell products.
Improved product understanding: In the course of servitization, manufacturing companies receive data on how customers use their products. The insights gained in this way can be channeled into product development and improvement.
Operational efficiency: Regular service calls and the data they generate can also lead to better inventory management, more predictable maintenance, and optimized resource allocation for the manufacturer itself.
Higher profit margins: The initial shift to servitization may require investment, but the long-term service contracts and value-added services often come with higher profit margins than traditional product sales.
Adaptability to market changes: Servitization models can be flexible and allow manufacturers to adapt quickly to changing market demands and customer preferences.
What can e-commerce technology contribute to a successful servitization process?
As an infrastructure, e-commerce technology offers a whole range of options that manufacturers can use to implement and support the process of servitization. When selecting the appropriate software, however, companies should carefully consider its performance spectrum. This is because only truly mature e-commerce solutions with strong performance can cope with the complexity associated with servitization and thus realize a wide range of benefits. A selection of important functionalities is summarized below:
Digital platforms for service offerings: E-commerce platforms empower manufacturers to showcase and offer a spectrum of services alongside their products – ranging from maintenance plans to training programs.
Automated subscription management: Manufacturers can offer Products-as-a-Service (PaaS) via subscription models. E-commerce software should therefore automate billing, renewals, and notifications, creating a seamless user experience for businesses and customers.
Real-time data analysis: An important functionality is analysis tools that provide insights into customer behavior, product usage, and service requirements. Manufacturers can use this data to customize their service offerings.
Integrated customer support: Service platforms should include or be able to integrate (AI-driven) tools for customer support – such as chatbots, live chat, or ticket systems. This provides customers with immediate support when needed.
Inventory and supply chain management: Integrated inventory management and automated reordering functions are also essential, allowing manufacturers to ensure that spare parts and products are available for service calls when needed.
Targeted marketing and upselling: E-commerce solutions can use purchase history and user behavior to promote relevant services, maintenance packages, or upgrades to existing customers, maximizing their lifetime value.
Self-service portals: They allow customers to independently access their account at any time, view their service history, plan maintenance work, reorder parts, or upgrade their service packages.
IoT integration: If required, an e-commerce system should be able to integrate with IoT-enabled products to enable predictive maintenance. A product equipped with sensors then automatically notifies both the manufacturer and the user when maintenance work is required.
Optimized payment processes: Various payment options, automatic renewals, and simple invoicing can improve the customer experience for service-based offers.
Global reach: E-commerce enables manufacturers to offer their services worldwide, tap into new markets, and adapt to regional needs and preferences.
If you would like to learn more about the topic of servitization or are interested in exciting practical insights from market leader Huisman, we recommend watching the following webinar recording:
