Toolbox: Key organizational issues for services Keynote for Roland Berger’s Service 3.0 workshop, 12 December 2013

1. Toolbox: Key organizational issues for
services
Keynote for Roland Berger’s Service 3.0
workshop, 12 December 2013
Dr Shaun West
Lecturer for Service Innovation
Blog: dokumenton.com

2. Manufacturing+and+services+are+different+and+our+customer’s+value+
these+differences+
Both'examples'from'GE'–'the'OEM'values'the'equipment,'the'service'
business'values'experience+
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

3. Service+is+humanis<c+and+manufacturing+is+technocra<c+and+this+
difference+creates+misunderstandings+in+product=based+businesses+
Manufacturing+
Service+
Mathieu++
Technocra<c;'Suppor1ng'
product;'Efficiency'based'
innova1on''
Humanis<c;'Suppor1ng'
the'customer;'ClientR
based'innova1on''
Herrmann++
Factual'
Emo<onal''
Kotler++
Tangible'goods'with'
minor'services''
Service'with'minor'goods''
Bretani++
Separate'produc1on'and'
delivery''
Combined'produc1on'
and'delivery''
CoppeE++
Service'is'a'cost++
Service'creates'value++
Normman++
Complex'structures''
Simple'structures''
As'‘good'engineers’'our'ins1nct'is'to'the'technical'rather'than'the'
human,'how'do'we'challenge'this?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

4. Benchmarking+of+your+business+and+your+compe<tors+posi<ons+on+
Mathieu’s+matrix+is+important+for+service+excellence+
Organiza;onal"intensity""
Service"specificity""
Tac$c%
Strategic%
Cultural%
Customer%
services%
A"Toll&free"
numbers"
Dell"on&
line"
Toyota/
Lexus"
Product%
services%
Basic"
extended"
warran;es"
GE"
Medical"
systems"
Caterpillar"
Service%as%
a%product%
Non&OEM"
repairs"
Fiat"in"IT"
IBM"Global"
Services"
Mathieu
If'you'are'tac<cal'you'will'follow'–'if'your'culture'is'‘service’'you'lead.''
Where'is'your+business+on'the'matrix?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

5. Value+chains+for+manufacturing+are+not+the+same+as+for+services+–+the+
service+value+chain+fosters+open+coopera<on+
Manufacturing+
Services+
≠'
Chesbrough'
Porter'
The'differences'create'conflict'and'require'different'organiza1onal'structures'
Can'you'iden1fy'the'pain+points+and'find'strategies'to'limit'their'
impact?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

6. The+installed+base+is+key+to+securing+service+–+it+is+paramount+that+
you+have+names+and+addresses+
Maps.google.com'data'for'
“power'sta1ons,'Germany”''
Do'you'know'who'buys'the'equipment?'Do'you'know'the'opera<ons/
maintenance'team'at'every'loca<on?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

7. The+opera<onal+outcomes+define+the+markets+
GE'published'data'for'Frame'
9FA/FB'gas'turbines'
Do'you'know'how'the'equipment'is'used'to'generate+value+for+your+
customers?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

8. The+life=cycle+of+the+equipment+helps+you+to+iden<fy+poten<al+
service+revenues+
Installa'on/
commissioning.
100"
Decommissioning.
Ini'al.spares.
and.rou'ne.mtc.
40"
M'USD'
90"
Upgrade.
50"
80"
Rou'ne.mtc.
70"
60"
30"
50"
40"
Unplanned.
outage..
12M.USD.
20"
Inspec'on/
revision.
30"
20"
10"
10"
0"
,3" ,2" ,1"
1"
2"
3"
4"
5"
6"
7"
8"
9" 10" 11" 12" 13" 14" 15" 16" 17" 18" 19" 20" 21" 22" 23" 24" 25" 26" 27" 28" 29" 30"
Years'(note:'1'is'the'start'of'opera7on)'
CAPEX"
OPEX"fixed"costs"
OPEX""inspec>ons"
0"
Original.design.life.
Reliability"
Usage"
Do'you'understand'your+customer's+cost+base?''
How'much'of'the'life=<me+revenues+do'you'capture?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'
Percent'
60"

9. What+is+the+impact+on+the+organiza<on+of+shiQing+to+services?+–+
some+key+ques<ons+to+ask+<me+and+again…+
R What'impact'will'the'cultural+changes+create?'
R What'changes'will'be'required'to'align'to'the'service+
value+chain?'
R What'has'to'be'done'to'track'the'loca<on+of+equipment?'
R How'can'the'employees'be'empowered'to'provide'
reliable'outcome=based+informa<on?'
R What'will'be'needed'to'fully'understand'the'equipment+
life=cycle?'
R What'tools'and'resources'are'needed'to'create'and'
sustain'a'service+network?'
Culture'
People'
Processes'
Change'
How'oQen'do'you'check'how'journey'into'services'is'progressing?''
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

10. Service+excellence+in+prac<ce+–+Caterpillar’s+service+model+
What+is+the+Caterpillar+model?+
What+can+be+learnt?+
R Seed'
R Culture'
R ValueRbased'products'and'
services'
R Design'and'development'
R Grow'
R Large'installed'base'
R Many'channels'
R Harvest'
R Pursue'parts'and'services'
R Unmatched'dealer'support'
R Customer'first'
R Value'products'and'services'
equally'
R Value'chain'
R Mul1Rchannel,'dealers'as'equals'
R Installed'base/use'
R Know'where'it'is,'support'
outcomes'
R LifeRcycle'
R Driving'to'lowest'lifeRcycle'costs'
How'does'your'service'business'model'compare?'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

11. Any+ques<ons?+
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

12. Caterpillar+in+prac<ce+–+they+are+able+to+deliver+what+their+customers+
really+want+in+terms+of+outcomes+
What(we(tradi@onally(do(for(customers…(
What'is'tradi1onally'delivered…'
What'customers'really'want…'
What(our(customers(really(want…(
+
'
Outcomes'
R Beier'efficiency'
+
'
R Improved'revenues'
R Reduced'costs'
+
'
R Mi1ga1on'of'risk'
R Improved'safety'
+
'
+
+
+
sell'equipment,'parts'and'
technical+services'hours+
R …'
'
'
'
is'to'achieve'the'outcomes'and'
improve'the'boEom+line'results'
Source:'Cameron'Ferguson,'Caterpillar'
They'are'able'to'deliver+services+what'their'customers'really'want'in'a'
form'in'which'they'are'willing'to'consume+
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'

13. Produk<nnova<on+|+Management+Competency+Centre+at+the+
Lucerne+University+of+Applied+Sciences+and+Arts+
Markus'Raschke'
Dr'Sabine'Sulzer'
Dr'Shaun'West'
Dr'Christoph'Imboden'
Peter'RadcliffeRLunn*'
Fabio'Mercandel*'
Innova1on'research'and'its'impact'on'business'models'and'people'
R Direct'mandates'and'KTI/SNF'sponsored'research'
R Student'projects'–'PhD,'Master,'bachelor'or'industrial'projects'
Toolbox:'Key'organiza1onal'issues'for'services''|''Dr'Shaun'West''|''12.12.2013''|''©'HSLU,'Luzern,'Switzerland'