Is Your Service Organization Turning a Profit? It Should Be

By CHRISTA PROKOS | Published: NOVEMBER 4, 2011

“I’m sorry, that part is not in stock. We’ll have to order it.”

“Our service center is closed. Please call back tomorrow.”

“A door latch is malfunctioning. We’ll have to move you all to a different plane. Thank you for your patience.”

Sound familiar? These are just some of the customer service phrases echoing around the globe—in all languages—and into the ears of all types of consumers from business travelers to homeowners to heavy equipment operators.

No one wants equipment downtime, whether it’s a plane, a washing machine, or a crane. For the traveler it’s an inconvenience. For the homeowner it’s the reputation of the brand at stake. For the crane owner it’s lost time and money.

You could say the same for all – it’s a costly pain that affects not only the customer, but the manufacturer as well.

Customer satisfaction levels directly impact the bottom line. When a manufacturer loses a customer it loses the opportunity to generate revenue through repeat purchase, up-sell and cross-sell.

In fact, improving service profitability has become a board-level initiative and a chief concern of most executives. The quality of customer service is only part of a much larger picture. Their goal is to strategically improve the entire service organization to ultimately drive revenue.

Sumair Dutta, Service Management Research Director at the Aberdeen Group, explains it this way: “Manufacturing executives look at service strategies to differentiate themselves from their competition and to ultimately drive profitability within the services side of their business.”

In his recent keynote at Aberdeen’s Chief Service Officer Summit, Dutta pointed out that “fifty three percent of manufacturing companies manage service as a profit center, and 63 percent of companies generate a profit margin on service.” He noted that, “this is a significant trend if we look back five years to when companies were purely cost-centric in service and now they’re profit-centric.”

In fact, 30 to 50 percent of a company’s profits can come directly from service part sales.

Manufacturers are investing in improving the quality of their service information—which includes parts information, user guides, warranty plans and maintenance manuals. If this information is out-of-date or hard to access, there is a direct correlation to product support issues and profit loss.

Winning manufacturers must improve information accuracy, provide configuration specific information and communicate with a product support ecosystem that often spans geographic boundaries. They must invest in advanced service information solutions which can give everyone the right information, at the right time.

Improving the quality, accuracy and usability of service information is a key strategy service organizations are implementing to drive profits. How is your company getting the right service information into the hands of those who need it most?

Creo 1.0 in the Multi-CAD, Multi-tool Workplace

By Geoff Hedges | Published: June 1, 2011

With Creo 1.0, PTC offers the parametric and direct modeling approaches to 3D design all in one product suite.  If you work in a multi-CAD environment or if you use multiple tools, Creo could lead to significant changes in the way you work—and I mean that in a good way.

The traditional multi-CAD experience

According to Aberdeen group, about 82% of you use multiple CAD tools in order to accommodate customers, suppliers, and other supply chain partners.  In fact, Aberdeen found many companies using up to 5 different CAD tools. Software vendors have worked hard to make a more interoperable environment for manufacturers. But the truth is, you can’t find one tool that will allow you to import, modify, and then incorporate your changes back to the original design. That’s because in a traditional parametric environment, you lose design intelligence when you export a model out of its native format.  The result is frustration, lost time as teams recreate models from scratch, and, well, a bunch of redundant CAD systems all under one roof.

The traditional multi-tool experience

Many engineers struggle with inflexible specialized tools too. You need your models to work with tools for electromechanical design, digital human modeling, associative tooling, etc.  As with incompatible CAD systems, when the specialized tools don’t work together you get lost time, redundant work, redundant tools, and frustration.

The Creo 1.0 experience

With Creo 1.0, you can move designs from one vendor’s system to PTC without having to start over again. You can launch the model in the Creo Direct App and make whatever changes you like without worrying about interdependencies. Behind the scenes, Creo 1.0 is applying your changes using a common data model that works in a parametric or direct environment. That means you can feely move imported models between Creo Direct and Creo Parametric, without ever losing design intelligence.

In fact, you don’t even have to use the direct app if you’re an expert parametric user. Creo 1.0 offers an extension, Creo Flexible Modeling Extension (FMX), that can give you direct-like capabilities in Creo Parametric.  So, load any model in Creo Parametric and modify it using FMX, as easily as if you were working with a direct modeler. In addition, Creo offers the broadest range of interoperable design, visualization, and illustration capabilities on the market. Plus, the Creo suite includes a huge range of tools in apps that all work together.  You won’t need to use redundant, incompatible tools to get your job done. And, since all the tools and apps are based on the same interface, you won’t have to learn a new tool for every job you perform. Working in a multi-CAD, multi-tool environment is just one process that gets easier when you can switch between parametric and direct modeling. I’ll tell you about several more in the weeks ahead.

Facilitating the Migration of 2D Drawings to 3D

By barb schmitz | Published: June 17, 2011

The advent of 3D CAD revolutionized the way in which new products were designed, saving companies significant ROI, while also enabling them to design better products faster than ever. In addition, the intelligence-rich 3D CAD model can be leveraged for downstream applications to facilitate and speed the development process enterprise-wide.

While most new product development today is done in 3D, there is still a significant amount of design data that resides in the form of 2D drawings, and many companies choose to retain their existing 2D designs and their related skills and expertise that they have built up over time. Nearly three-quarters of manufacturers today continue to use 2D for certain applications, such as shop floor drawings or collaborating with outside vendors and customers.

Despite the continued use of 2D tools, there are many compelling reasons for manufacturers to transition to 3D. It has become a competitive necessity for manufacturers to compete in today’s world.  The tougher questions might revolve around what to do with the treasure chest of 2D legacy drawings? How much of this legacy data should be converted to 3D? When do you convert them? Do you buy translation tools to convert them in-house or hire an outside company to convert them for you? These are some of the many questions manufacturers must address in regards to their legacy data.

Leveraging 2D for Reuse

Design reuse is one important way for manufacturers to shave time and cost out of product development processes. Migrating 2D drawings into 3D CAD systems, however, is a process often fraught with errors and often takes more time to do than if engineers had started from scratch using 3D.  Despite the fact that legacy drawings often contain critical design information, extracting that data in a usable format is often problematic, because the systems (hardware, CAD software, or operating systems) with which it was created, may now be obsolete. In addition, many companies now lack in-house expertise with these older design systems.

According to a study conducted by the Aberdeen Group, few manufacturers have a clear strategy for migrating their 2D drawings to 3D CAD. In the study entitled, “Best Practices for Migrating from 2D to 3D CAD,” among the participants designated as “Best in Class,” 21% migrated their 2D legacy data to 3D based only on a specific product/project line and another 50% on an “as-needed” basis. Among this same group (64%) are more likely to deploy translation tools to help them work with third-party CAD data or to leverage existing 2D legacy data.

Before moving 2D datswered.  Does this product generate a lot of revenue? Is it closely related to other successful products? Is there the potential for future market growth? If the answers to any of these questions are yes, then you will most likely want that 2D data converted to 3D.

A successful conversion program requires careful planning, preparation and logistics. Migration approaches will differ among companies based on myriad of factors. Some manufacturers will decide to not convert any 2D drawings and design all new products in 3D, often a path taken when there are infrequent changes to old product lines or when new products are not off-shots of previous ones.

Another approach is to convert 2D drawings on an as-needed basis or just those product lines deemed as offering the possibility of ROI. Another migration strategy involves migrating all 2D drawings to 3D CAD, though this is probably the least executed because of its high cost and the extensive planning and resource management required to execute it.

Some vendors offer bundled 2D/3D tools that can facilitate the migration from 2D to 3D, allowing users to leverage their years of 2D design data and expertise, and then incorporate and learn the 3D software at their own pace. Ideally, the 3D tool should provide direct ‘read and write’ of native 2D files while maintaining full associativity with the 3D model. This interoperability enables the engineers to safely reuse 2D files to build accurate 3D models and then communicate feedback from digital prototyping back to partners that operate in 2D environments.