Service departments are new revenue drivers for manufacturers

A survey by Salesforce indicates that service departments are the main revenue driver for manufacturers, but some companies are still lagging behind with outdated methods and technology.

By Emily Poklar, MSI Data May 23, 2016

Many businesses today are viewing their service departments as revenue generators and are changing manufacturing business standards. Two-thirds of surveyed manufacturing executives agree their service departments are generating income for their business.

In the past, most service departments were viewed as cost centers that were necessary, but didn’t add revenue. With costs like fixing a faulty part and making multiple technician visits, it only makes sense that service was viewed as a burden. Now, according to a Salesforce report, manufacturing is transforming to the point where service will be the main revenue driver for companies.

Salesforce interviewed 200 manufacturing executives in their recent report and found that while 90% state their top priority is to improve field service, some companies are still using paper-driven, outdated technology to manage their businesses.

Despite their desire to adopt new technology into their service activities, 61% of executives are still using spreadsheets, and 37% are using a paper-based system to track customer information. While manufacturers desire technology-driven service departments, there is some hesitation to take the leap and invest in new technology.

Technology can help manufacturers prepare for the shift

According to the survey, 87% of executives agree that their company should invest in field service technology. As service takes over as the primary revenue driver, manufacturers can prepare for the shift with these key technological advances.

1. Connected equipment with the Internet of Things (IoT)

By connecting equipment with IoT sensors, service departments are able to be proactive rather than reactive to faulty parts or broken machines. Manufacturers can utilize IoT sensors to monitor how individual parts are performing and how systems are working together. They are able to quickly see when something is underperforming and proactively solve a problem before it becomes a bigger issue.

It is essential for manufacturers to provide more by investing in IoT-connected equipment because customers demand and expect more from their equipment and service. Manufacturers can save on costs by predicting breaks while keeping their customers happy and more willing to sign another contract. With only 19% of manufacturing executives reported utilizing an IoT strategy, this is an easy way to get ahead of competitors while generating revenue.

2. Using mobile devices in the field

According to surveyed executives, 78% of field service technicians carry mobile devices to their service calls. Most of these are also using a mobile app to manage their activities. It is clear technicians enjoy managing their service activities, schedule, and filling out documents through their mobile devices on-site. Giving technicians access to customer information and the back office through a mobile device will reduce manufacturing organization costs in the long run.

For example, 70% of executives report that their service technicians have to return to their service sites on occasion. For those who do return, it’s because of a missing part or tool 40% of the time; 45% are unable to complete the transaction on-site; and 35% have a lack of customer information on-site. Manufacturers will be able to increase their operational efficiency by giving these technicians access to a cloud-based mobile service application.

3. Measuring analytics

More than half of surveyed manufacturing executives are measuring analytics and gathering insights on what is and isn’t working. For example, analytics will be able to clearly show if someone is taking too long at one service on a regular basis or if a service site is spending too much time on one problem. 

Service technology is the future

Within 10 years, manufacturing executives believe service will be the primary source of revenue for their companies. By investing in the connected technologies today to fuel service management, manufacturers will be ready to capitalize on the opportunity in service revenue.

Emily Poklar is a content marketing specialist at MSI Data. MSI Data is a CFE Media content partner. See the original article here. Edited by Chris Vavra, production editor, Control Engineering,

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