Machine Builder Business Models, Sustainability and Innovation
So my wife and I recently took a two week vacation to Alaska – without computers or anything but camera’s and our ever important smartphones. I didn’t realize that Marie Hattar, our Segment VP was going to write a blog about the importance of vacations and productivity – see that here. Imagine that, I overachieved via a vacation!
At any rate, back to the vacation – we left on Sunday so Saturday was reserved for clothes washing and packing. Great plan until the motor on the washing machine froze. We ended up Saturday night finishing the wash at her father’s house. Then after the trip (that was fabulous by the way. Everyone needs to take a cruise through the Inside Passage!) we ended up having the repair service visit to confirm the motor was shot (new motor cost more than the washer was worth, so conclusion: buy a new one) and using his washer/dryer for another week. That meant bundling up two plus weeks of wash, carrying it to his house, doing the wash for a few hours, etc.
I was reminded of the challenges a manufacturing company would have due to an unexpected machine breakdown. You have to isolate the problem, get appropriate repairs, possibly upgrade the machine, possibly line up alternate manufacturing capability, etc. I’ve blogged before about the needs for continuing MRO schedules and the importance of properly servicing your manufacturing machines and lines. But how do you prepare for a critical machine that suddenly breaks? Can you rapidly sub out the work? Can you quickly get the machine replaced? What if the newer machine doesn’t fit in the line directly?
That is sort of what happened to us. Washing machines have dramatically changed in technology and efficiency (innovation at its best), but the new models are front-load and are deeper. Same width, same connections. Aesthetically different colors, so clearly we had to replace the dryer too. And to make it easier to use the front-load machines, they have these optional pedestals that elevate the machine. Fortunately our laundry room space was deep enough for the new machines, and the built-in cabinets had enough clearance for the new machines and pedestals.
The new appliances are also much more of a commodity. That whole shopping experience will be another blog.
So I started thinking of this in the context of a machine builder. New innovative technology allows machine builders to provide more efficient and productive machines that satisfy more issues for the end user. But that new innovation may also present a new business model for the machine builder – new opportunities for remote diagnostics and troubleshooting (my new washer, for instance, allows me to hold a cell phone up to it, press a button, and allow the call center to provide diagnostic information back to me). That means the machine builder may now have to build in the communications infrastructure into the call center/data center to interact with his decorator, labeler, packaging, paint, whatever machine to use this new technology. But it provides a means of more quickly addressing issues at the end user without sending a service technician. That costs money but provides a differentiated service level.
The challenge for a machine builder is to provide that differentiated experience, to continually incorporate the new technology, while maintaining form factor and core functionality – all while keeping from becoming a commodity. Provide scalability and flexibility and sustainability to the end user. Adoption of a comprehensive open network infrastructure is a key step in this.
We’re going to be talking more about machine builder opportunities in the coming months. I look forward to your feedback.