How Can Industrial Asset Management Affect Profitability?

Industrial asset management system helps OEMs across the globe in many industries (aviation, power generation equipment, oil and gas suppliers, etc.) to enhance the profitability and create a highly defensible niche in their markets and retain the customers for long. But the existing models have two challenges: limited machine coverage and poor data analysis.

Reduced Service Revenues

When there is limited connectivity in remote equipment, it results in an inaccurate installed base that may hinder the assessment of the service opportunity and may lower the service revenues by up to 20 percent. As a result, the margins are reduced because of the increased service delivery cost. The unscheduled asset downtime affects the end customer’s profitability. It results in damaged relationships, lower satisfaction and also affects the product range reputation.

In the aftermarket contracts, the inaccurate failure forecasting and the related costs lead to inadequate pricing. The service operations are affected as well as the first time fix rate by technicians suffers due to the absence of adequate trials, availability of the spare parts and poor scheduling of services.

While the quantification of the contract risk in important but is not done properly. Poor reliability due to improper implementation of the engineering design changes results in higher maintenance and also increases the cost of quality resulting in poor service margins.

Growth Expected

Aftermarket services that are linked to remote diagnostic devices will see significant growth in coming years. OEMs that are looking for a new profit center can look for it. Some research companies are pointing to asset management, supply logistics and energy management as key drivers. Companies like GE and Rolls Royce deliver exceptional profits due to improvement in asset uptime and extension of the asset longevity.

Inadequate Models Of Operation

The existing models often fall short because of the imperfect and non-existent link along the services operations chain. The entire process from the setup and planning through contract management in very fragmented. The setup and planning suffer from the limited visibility in the existing databases. The information about the customer repair history and the equipment are difficult to track due to more numbers, dispersion across geographies, reselling and unconsolidated lists of the customers.

If real-time equipment monitoring is done selectively, the equipment diagnosis process is rendered ineffective. Real-time monitoring can be lead to a better diagnosis. It will work well at the initial call level, improves the availability of spare parts, more intelligent field-service operations and better training of the technicians.

Resources Are Hard To Find

The resources can be difficult to find for remote monitoring design and connectivity monitoring. Key resources like senior-executives, software experts and shared service experts are not available readily. And bringing these experts from different geographic regions is a complex task. A properly designed industrial asset management is more consistent and timely with effective delivery at optimal costs.

In The End

A mature industrial asset management system describes the role and activities of the main stakeholders and thus improves the efficiency and profitability.