4 opportunities for machine builders to increase revenue with digital services
Leading machine builders estimate that 20% of their revenue in 5 years will come from digital services. What is your vision and plan?
Creating and selling digital products is one of the best ways for machine builders to generate new revenue streams. It is expected that in 5 years at least 20% of machine builders' turnover will come from digital services. Where will you be in 5 years?
IXON wants to help machine builders realize this ambition. Not only by getting the ball rolling with opportunities for new business models, but also by offering concrete ideas and tangible solutions with minimal investment and fast ROI.
In this article we discuss the challenges faced by machine builders and introduce new business opportunities that will disrupt existing business models. By implementing one of these new business models, you will be able to realize savings based on intelligent use of logged data.
Digital services – income opportunity for machine builders
Current challenges for machine builders
Machine builders are currently facing a number of challenges on their path to digital transformation.
Operating in the extreme competitive mechanical engineering industry is difficult. Most machine builders are guided by the needs of their customers, rather than creating their own path to success, which can be very complex. To produce cost-optimized machines, you need to determine how to start your digital journey and where to go.
The exploration of digital possibilities to use machine optimization, without being tied to one huge investment, can be a challenge. The lack of knowledge, the enormous amount of digital technology and the potential safety risks during the life cycle of machines make this even more difficult.
That brings us to the key question: how can you achieve 20% of your revenue from digital services in 5 years with a business model that both you and your customers benefit and what your customers are willing to pay for?
Revenue Stream Opportunities for Machine Builders
New revenue opportunities that extend beyond just VPN
Earning money with digital services is over remote access, it all starts with one change in mindset. A critical look at your existing services and discussing and coordinating your ideas with your customers will lead to new possibilities.
We cover four business opportunities based on different machines in a production line. All ideas become driven by data which can lead to new sales growth or cost savings to better position your machines in the market.
Recurring revenue with a consumable strategy
Out of specification consumables can be a are a major cause of machine downtime. When consumables are optimized for your machines and in stock, this leads to higher uptime. So why not supply your own consumables, or better yet, sell machines to sell consumables? Granted, not all machines offer this option, but it's worth considering how this fits into your machine's market.
There are numerous examples of this strategy being successfully applied in the printing and packaging industry. By sending the consumables to your customer before he even knows he needs them, you take the worry out of them. This is a win-win situation, which leads to a higher uptime and recurring revenue for the machine builder.
Lack of consumables leads to unplanned downtime
Monitoring service for wear-sensitive parts that leads to multiple profit sources
Some parts of a machine have a certain lifespan and will wear out at some point. Unplanned downtime due to worn machine parts leads to negative customer experiences and rising costs. For example, you prefer it when your car notifies you when maintenance is needed than when you suddenly stop on the roadside.
Machine builders can use machine data to determine when wear-sensitive parts have reached the end of their lifespan. They can use this as a new service by warn customers in advance, for a small fee, which prevents production from being halted. This leads to an increase in spare parts sales, potential service contracts and customer satisfaction.
Do you want customers who are more satisfied and profitable? Find out how condition monitoring of your machine can help.
Condition monitoring of wear parts
Savings on machine parts by learning from your machines
Implementing machine learning is difficult and difficult to achieve, especially for smaller machine builders. But learn from your machines in the field it is not. Most machine builders focus on having well-functioning machine software with limited bugs and a stable operating system. Changing the software is a no-go and using self-optimizing algorithms and AI is only a possibility in the distant future.
Imagine that some parts of your machines are 'too' good. When designing new machines, you apply certain safety margins, for example 20% on drives and motors. But what if those parts never break and your safety margins are too high? Typically, failures lead to improvements through root cause analysis. However, machine builders rarely focus on parts that do not fail.
What if you use the safety margin could decrease without running the risk of market failure? By collecting and analyzing data you can redesign what is too good. This will greatly reduce costs and this knowledge can be used in your design phase of future parts and machines. This way you can optimize the new generation of machines and gain a competitive advantage.
Learning from machine data saves costs on machine parts
Predictive monitoring service contracts for critical components
Have a lot of machines critical parts with a long production and design life, but these parts often fail during the life of the machine. Failure of critical parts often leads to long downtimes, because most companies do not have these critical parts in stock. This is disastrous for the production process and costs your customers a lot of money. How much will they lose as a result?
What if you could predict such failures based on data available at PLC level? Analyzing the data from defective parts and parts near the end of their life can potentially be combined with data science that leads to identifiable patterns. Experienced maintenance technicians can often determine whether the machine is running properly or not and determine the cause by listening to the machine or feeling vibrations.
Monitoring the correct data and comparing it with well-known patterns is the link that brings out your combined service experience on every machine 24/7/365. In principle, you and your customer know that the chance of a malfunction is high before it occurs. By replacing parts and providing service before a defect occurs, at a time when the impact on production is limited, you can increase the quality and revenue of your service contracts.
Analysis and predictive monitoring of critical machine parts
Implement new service strategies with a fast ROI
When it comes to digital transformatione and creating value for your customers by implementing new services, the solution is often within reach. But the need for IoT solutions and data to create those types of business models brings new challenges and investments.
How will you capture valuable revenue – and support your customer's success – with digital services? If you need help defining your digital strategy and creating value from machine data, you can contact one of our industry experts without obligation.
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