Solving the Building Management and Factory Floor Automation Connectivity Challenge

With the goal of reaping the benefits of exponential gains in productivity at reduced operational costs, the revolutions in machine-to-machine intelligence, edge computing, the internet of things (IoT) and cloud computing are a top priority for large businesses and other organizations. One of the biggest challenges to the potential rewards of these automation technologies is one of large-scale, dependable integration via cloud computing platforms from the worlds of building management and the plant floor with their multiple devices and systems.

The Challenges

Building management and industrial automation have been separate worlds for a long time. They have been led by two largely separate sets of automation, control and equipment supplier bases with different priorities and tasks. 

One group specialized in building or facilities automation management, including HVAC, lighting, fire safety, physical security, communications, etc. The other world managed the factory floor’s complex requirements for discrete manufacturing systems such as product assembly lines or process industry systems with their pumping equipment, boilers, mixers, ovens, freezers, pipelines, tanks, packaging or bottling lines, etc.

These supplier camps tried to stay out of each other’s way and cooperated where the need was obvious, but still remained largely separate. Each world developed its own approach to device communication, networking and control systems.  These systems were separate communication and data silos with their own industry standards, making them difficult to integrate into enterprise-wide systems.

There are important reasons today to bring these two worlds closer together. For example, the industrial automation system might want to change the temperature set point for the chillers, or put the chillers into maintenance mode. Another application would be the presence of hazardous gases which are highlighted in the Building Automation System which could be critical information for the Industrial Automation system.

Do you really need to install two parallel HVAC automation systems with multiple controllers, IO modules and wiring that operate on two separate industry network communication buses that can’t talk to each other?  Or do you have to install duplicate I/O, PLCs and hard-wire both buildings together simply because the building management and factory floor automation systems can’t send data back and forth over a common communication bus and network?

A simpler, less expensive solution is to integrate network communications between these two worlds of building control and factory automation so that one hand knows what the other hand is doing. In most situations, two-hands are the best and safest approach to building management and plant automation. Once this paradigm shift in automation strategy is accepted, then the big question is… How?

Solutions to Consider

For these reasons, building or facilities managers and process or plant engineers often turn to system integrator partners. These professional integration specialists typically have extensive systems engineering and integration experience—often with proven, ready-to-go pre-packaged solutions involving multiple solution partners. One cost saving solution for integration is the MSA FieldServer QuickServer Gateway, which can pull data from multiple devices through the Gateway, requiring only one license. 

ICE Process Management

One such MSA partner is ICE (Integration, Controls, Engineering) Process Management, which can provide answers to large scale systems integration projects. Using its proven process system engineering and physical design capabilities, ICE develops a custom modular automation system for each client’s proprietary base building/campus site(s) and its plant manufacturing floor or industrial process technologies.

ICE offers an international approach to automation, data integration, and operational technology that capitalizes on cross-industry knowledge. By pulling concepts used in high-margin industries, ICE is able to competitively build integrated systems efficiently, with a high degree of integrity. Customers are able to witness system testing remotely, allowing resolutions from the factory, rather than costly on-site troubleshooting. Common integrations include BACnet servers, Modbus Servers, Rockwell Automation Allen-Bradely and Emerson DeltaV. 

MSA FieldServer QuickServer

In a recent building management project, the ICE team chose the MSA FieldServer QuickServer product line with integrated BACnet capabilities and custom-configuration options. The combination of MSA FieldServer QuickServer with BACnet and custom configuration allowed the ICE team to provide a tailored, automated building management and factory floor solution using programmable logic controllers from Emerson’s line of DeltaV PLCs (Modbus TCP/IP) and Rockwell Automation’s Allen-Bradley PLCs (EtherNet/IP) that met the customer’s exact requirements. Note: The ProtoNode from MSA FieldServer is from the same product family as the MSA FieldServer QuickServer.

The MSA FieldServer QuickServer is a fully configurable building and industrial automation IIoT gateway, which easily connects to the cloud and interfaces devices to networks in buildings, campuses, and industrial plants. A basic QuickServer Gateway supports 250 data points. Larger point counts are available and can connect to Serial, Ethernet, and/or LonWorks Free Topology (FT) links. Users can remotely and securely access its FS-GUI application, which is available locally on the QuickServer.

Emerson DeltaV DCS

The DeltaV Distributed Control System (DCS) from Emerson is an easy-to-use automation system. Its DeltaV PK Controller and EIOC are suitable for small- to large-scale plant automation tasks, such as building or facilities management when integrated with ICE solutions relying on MSA FieldServer QuickServer with BACnet capabilities. The MSA FieldServer QuickServer supports DeltaV applications from BACnet/IP to Modbus TCP/IP, LonWorks to Modbus TCP/IP, Rockwell’s Ethernet/IP, and any combination of these communication protocols.

Rockwell’s Allen-Bradley CompactLogix Control Systems

The CompactLogix™ and Compact GuardLogix® controllers from Rockwell’s Allen-Bradley line provide high performance, increased capacity, improved productivity and enhanced security in building or factory automation systems. The MSA FieldServer QuickServer provides these Rockwell products with BACnet/IP to EtherNet/IP and LonWorks to EtherNet/IP communications capabilities.

Conclusions

No matter the building management system or automation or control system, MSA FieldServer QuickServer communication products offer system integrators such as ICE a powerful tool that brings together complex building and factory automation systems. Together, ICE and MSA are breaking down the silos of building and plant automation by leveraging the power of the IoT and the cloud computing worlds, offering leaps in productivity and reductions in operational costs. 

Can connected devices increase air quality?

We’re increasingly seeing state governments ease their “stay-at-home” and “safer-at-home” orders to enable businesses to open back up. But, despite the easing of these restrictions, we haven’t seen a massive shift back to business as usual.

And there’s a really good reason for that. Many of the companies that operate in traditional office buildings and other traditional workplaces are concerned that they simply can’t ensure the safety of their workers. Even if they take precautions with social distancing and enable their employees to come back into offices in shifts, there are going to be challenges.

Every building has bottlenecks and chokepoints. Font doors. The lobby. The elevator. These are places where it’s virtually impossible to limit the number of people present at any given time. And it’s even more difficult to sanitize them after each usage – if not impossible.

Then there’s things like conferences and meetings. It’s impossible to conduct large meetings in the average conference room and maintain social distancing. The alternative would be to conduct meetings via phone or video conference from individual desks – but then, what’s the whole point of making people come back to the office? They could do that from home.

It’s safe to say that – when business does go back to normal – the office that employees have grown accustomed to is going to be very different. Desk layouts will be different. Bullpens and open workspaces that put multiple employees in close contact with each other with no physical separation will most likely go away. And telework and rotating days in the office will most likely become the norm.

But those are all changes to the physical layout of the office and the ways offices operate. There are other changes that we can expect that may not be nearly as visible or obvious to the employees themselves. And one of those involves the very air that they breathe.

Air quality takes center stage

When we’re dealing with a threat to employee safety that is transmitted through respiratory droplets that can linger in the air for hours, there’s going to be increased demand for air filtering and higher air quality. And that’s not unprecedented.

Hospitals and healthcare facilities go out of their way to ensure that their air is always effectively filtered and that a large percentage of outside air is being circulated into the building to ensure patient safety. And ASHRAE has long had standards in place for the minimum amount of outside air that HVAC systems should circulate into buildings.

I anticipate that we’ll see similar approaches to air filtration in office buildings as we see in hospitals and healthcare facilities in the near future. I also anticipate that those ASHRAE minimum requirements will not only be universally met, but universally exceeded moving forward, as outside air could help decrease the circulation of this airborne threat.

But how can building owners and facilities managers ensure that their air quality is meeting requirements and standards for keeping tenants and occupants safe?

Connected devices deliver air insights

The HVAC equipment that these buildings utilize to keep their air filtered and comfortable are becoming increasing network and cloud-enabled. With the ability to connect these devices to the cloud and gather device data, the building owners and facilities managers can get the actionable insights they need to make important air quality decisions and keep their air safe for building occupants.

For example, filters that are in need of changing let through less air. Utilizing cloud-enabled HVAC devices and sensors, building owners and facilities managers can monitor airflow and set alerts for when it drops below a certain threshold. When those alarms sound, facilities or maintenance staff can be dispatched to replace filters and keep air quality high.

The same system can be established for outside air.

Utilizing device data that’s being pushed to the cloud, building owners and equipment managers can monitor and manage how much outside air is being circulated into their building and make adjustments. This system monitoring and management could be done from anywhere, even from outside of the building, making it possible for management companies and remote facilities staff to ensure high air quality even if they’re not onsite.

In the post lockdown world, there’s going to be significant changes to business as usual and the traditional workplace. One of those changes will be a demand for improved air quality in buildings and offices. If building owners and facilities managers are going to meet these clean air requirements, they’re going to need information on how their HVAC systems are performing. Cloud-enabled and connected HVAC devices could be the answer – giving building owners and managers the actionable insights they need to keep air quality high.

Desire for increased uptime drives adoption of edge computing

If there’s one universal constant with commercial and industrial devices, it’s that downtime costs money. If the devices that operate a manufacturing facility, or a commercial building go down, there’s a cost in getting them diagnosed and repaired. But there’s the other cost, as well – the cost of decreased productivity.

This is easy to visualize in a manufacturing environment. Any slowdowns on the production line caused by failing or malfunctioning equipment obviously impact production and decrease profits. But this is equally true with commercial buildings like office buildings and corporate campuses.

If the elevator fails in a multistory building, there’s a chance that people will get to their desks later – or not at all if they have special needs. If the boiler fails or the air conditioning fails in the middle of winter or summer, there’s a chance that the working conditions could become unsafe and employees could be sent home. In each of these instances, productivity and revenue are ultimately lost.

To combat this, equipment owners are looking to identify failing devices sooner and work to proactively service and repair them. While this doesn’t eliminate the cost of having a repair technician service the equipment, it does save on the lost productivity that results from that device failing outright and unexpectedly. And that productivity loss is something that could extend for multiple days should a device fail since the technician most likely would have to come out multiple times – once to diagnose the problem and again with the appropriate and necessary parts to repair the device.

EQUIPMENT FAILURES ARE A SIGNIFICANT COST TO DEVICE OWNERS. PROACTIVE MAINTENANCE CAN HELP KEEP DEVICE ISSUES FROM ESCALATING INTO DEVICE FAILURES, BUT ONLY IF THE DEVICE OWNER KNOWS THERE’S A PROBLEM.

To make proactive equipment maintenance and servicing possible, the equipment owners need device data. Without access to device data, there would be no way to know that a motor is starting to draw extra power – a sure sign of motor failure – or another warning sign is occurring. This requirement is being met by equipment manufacturers that are increasingly network-enabling and cloud-enabling their devices. This makes device data available to the building owners from any location with an active Internet connection.

But is that really enough for equipment owners to make proactive maintenance decisions?

Pushing logic to the edge

The average equipment owner probably doesn’t know that decreased airflow could be an indication that filters need to be changed. They may not know that extra energy being used by the motor is a telltale sign of motor failure. They just know that their devices are essential for the operation of their business and that they don’t want them to fail.

Just getting a stream of equipment or device data isn’t enough for the average equipment owner to make any kind of predictive maintenance decision. Worse, pushing all of that device data into the cloud could come with cost considerations – cloud costs increase when data sets grow.

The answer to this problem is to push some of that data analysis and filtering out into the field, where the device lives. This is a concept that is often referred to as “edge computing.”

In an edge computing environment, some of the compute power and logic is decentralized and moved to where it’s most needed – out where the data sets are being generated. This accomplishes a number of things, it helps reduce the sheer amount of data that needs to be transmitted into and stored in the cloud, helping to reduce cloud costs. It also means that the data that’s being pushed is pre-filtered in such a way that the end-user isn’t just receiving data sets in need of analysis, but actionable insights.

How does this edge computing concept apply to the proactive maintenance situation that I described previously? Pretty exceptionally.

Edge computing doesn’t have to mean that there’s a powerful compute resource at the edge. It could be a simple and stripped-down device that’s incredibly cost-effective but still capable of solving problems, filtering data and translating data on-site.

Take, for example, an IIoT cloud gateway.

Cloud gateways can be used to simply push data up into the cloud and into a BMS system. But they can also be programmed to apply logic and filters to data. They can be used to filter data for red flags and actionable insights. They can also be programmed to send out alerts when device data meets or exceeds certain thresholds.

What could that look like? To use an earlier example, parameters could be set for acceptable motor energy consumption. Should consumption exceed those parameters, an alert could be issued that warns the equipment owner that the motor is potentially in need of service. From there, the device could even be remotely throttled down or powered off to keep it from failing completely.

Equipment failures are a significant cost to device owners. Proactive maintenance can help keep device issues from escalating into device failures, but only if the device owner knows there’s a problem. But just getting the device data isn’t enough. By implementing edge computing initiatives – even if accomplished with simple cloud gateways – device owners can get more than just data. They can get actionable insights and warnings to help ensure that no device issue goes unnoticed.

For additional information on how edge computing and cloud gateways can enable proactive maintenance in commercial and industrial devices, download a complimentary copy of the “HVAC as a Service Revolution” eBook.

Predictive maintenance: participating in the next Industrial Age, now

The next Industrial Age is now. Predictive maintenance is a key marker of this more efficient, cost-effective, and responsive era in manufacturing.

Martin Keenan, of Avnet Abacus, wrote recently that predictive maintenance is the killer app of IIoT. Martin has elsewhere suggested that while the technology is available for predictive maintenance to take a leading role, there are barriers to its ascension – like security concerns, major shifts in maintenance methods, and additional personnel.

However, there is no longer room for challenges to delay adaptation of predictive maintenance throughout our industrial automation sectors.

We have to realize that it’s already here! The era of smart factories, AI, predictive maintenance – the next Industrial Age – it’s our reality, today.

How will we see this new Industrial Age take shape?

In some respect, it comes down to basic product management principles. What are our customers’ needs? What resources are available? How can we maximize and build on work that’s already been done? How can we make this product efficient and beneficial for our bottom line?  Asking these questions as we enter into a marketplace that already expects a level of service that predictive maintenance delivers will drive our strategy and participation in this new era.

Perhaps a real-life example will illustrate. Only a few years ago, the Building Automation Manager of a major San Francisco area university came to us with the need for all the buildings on their campus, which were managed through their building automation system, to be managed and maintained remotely. He said, “I want my suppliers to jump to my machines, to look at them, to maintain them, to update them. And, I want them to do it remotely. I want to be more efficient, as efficient as possible.”

We gave him what he asked for. With that, predictive maintenance was now possible. He had boilers. Now, boiler manufacturers can manage the boilers remotely, but also actively monitor for variances, detect problems early on, schedule fixes, schedule and perform routine maintenance, and never have to roll a truck. And, better yet, by predicting small anomalies in temperature and pressure, the university can avoid costly damages for failure, the discomfort of students and faculty who wouldn’t be able to use hot water for extended periods, and perhaps even schedule repairs during lowest demand for hot water.

The capability for predictive maintenance exists. But, more importantly, the demand for a new era of efficiency and service also exists. Failure to move into this will be felt in the pocketbook. Resistance to this wave will result in unhappy end-users, which will mean our customers will likely look elsewhere in the marketplace.

If we aren’t adopting this now, someone else in the marketplace is, or soon will be. We will lose sales. And, in the fair market economy, shareholders certainly have no need to be patient if we aren’t maintaining competitiveness and offering products with service at this level. Predictive maintenance is no longer a future idea, it’s the demand of this newly arrived Industrial Age.

What about security concerns?

We can assure our clients that security is a baked-in, inherent deliverable. Our penetration tests and the myriad of security protocols at every level of connectivity all make security a standard rather than a goal.

Yes, we need to be vigilant in regard to security. But that vigilance is infused into our SOPs. With these in place, no one can access any device, even internally, without being known to the system and permitted by our security protections. It’s our job as product managers to assure clients, and proactively offer this assurance, that we have met these security concerns head-on, and in advance, according to industry expectations.

The next five years of this Industrial AgeThe landscape in industrial automation will grow exponentially. The number of devices connected to the internet will continue to explode. Our specialists will sit in home offices, analyze, diagnose, and update machines.

Machine learning and notification will become commonplace. With our machines connected 100 percent of the time, our system will make decisions, send alarms, and notify technicians. Our machines will tell us what is going on. That’s possible now. It will become normalized as we move forward. So, we are no longer anticipating the next Industrial Age. The marketplace demands our participation in it now.

Data is the key to smarter OEM product development

Product development is an essential part of business for  OEMs. 

Whether a company makes elevators, humidifiers, air conditioners, or some other type of equipment, they undoubtedly have competitors in their market. Those competitors are constantly working to innovate new, more resilient, and more advanced products to help them gain a competitive edge in their industry. 

Sitting still and not doing the same means losing a competitive edge and, ultimately, losing market share to other companies over time. This means that OEMs have to be constantly developing new products, improving their existing ones, and ensuring that their equipment is among the best, most resilient, and most advanced in the industry. 

And data can help. 

The product development testing conundrum

When it comes to the products that today’s modern OEMs are manufacturing, uptime is one of the most important factors. When industrial or manufacturing equipment goes down, time and productivity are wasted, and money is lost. 

The facilities managers, building owners, and factory operators that OEMs call customers just want equipment that works the way it’s supposed to when it’s supposed to. 

When OEMs are developing and designing new products, they’ll undoubtedly create digital designs and models that they can simulate in virtual environments. Then, once those digital models are tested virtually for functionality and resiliency, they’ll create real versions of the product that they can test in real life. 

And here is where the challenge lies. 

If an OEM is making its equipment in Minnesota, there’s an excellent chance that they’re only testing it in Minnesota. It wouldn’t be cost-effective or financially responsible for taking that product on a road trip of the United States or a globe-trotting adventure, testing it in every possible environment and in every operation in which it will need to function. 

Granted, that OEM will attempt to simulate other environments and use cases, but simulation can only prove and illustrate so much. Real-world data, on-location, and in real-life situations is always more accurate and preferred. 

There needs to be a better way to determine how different products and parts operate in disparate environments and disparate use cases during the product development process so that the OEM can work to optimize the final product to function perfectly and with longevity in any situation. 

Winning the resiliency game

Luckily for OEMs, they already have a way to see how different parts and products hold up in disparate environments because they most likely have existing products in the field. 

If an OEM in Minnesota has sold equipment to a user in Florida, they can see how well the different parts and materials in that product have held up in a much more humid and far warmer environment than their own. If they have products in use by different kinds of facilities and operations across the entire country, or even around the world, they effectively have a window into how their parts and materials hold up and function in practically any environment or use case. 

That knowledge can then be applied to the new products that are in the product development process. By analyzing how materials, parts and other aspects of existing products perform in various environments and for various uses in the field, insights can be gained and applied to ensure that future generations of products are developed and engineered to be even more resilient and durable over time.

But how do the OEMs get access to that data? The answer lies in the cloud. 

Cloud + data analytics = intelligent product development

Today’s facilities managers, building owners, and factory operators have embraced the cloud to get a “single pane of glass” view into the status of their equipment. But the OEMs that have made the equipment haven’t done the same. The equipment is out there generating data, but that data has been left to die on the vine. 

By cloud-enabling their equipment, OEMs can effectively harvest that data. Once the information is collected from their equipment in the field, it can be analyzed, and valuable insights can be gained from it. Those insights can be used for maintenance and diagnostics, or they can be used in product development to make a more durable, resilient product. 

By harvesting data and then working to analyze it against other available data sets, OEMs can gain valuable insights that can be used to tweak and improve their products over time. Cloud-enabled equipment can report back usage statistics, unit temperature, operating environment data, and other useful data. 

By intelligently cross-analyzing these disparate data sets, the OEM will not only know about how their equipment operates when it’s first installed in a specific environment, but they can also begin to predict how that piece of equipment will perform into the future. This knowledge can then be applied to make a more resilient piece of equipment in the future. It can also be used to proactively service and maintain existing equipment in the field so that downtime can be avoided. 

The data is out there. It exists. OEMs need to take that next, logical step to cloud-enable their products and harvest their data. What it could do for product development could become a massive advantage in a crowded and competitive marketplace.

Building owners and facilities managers look to the cloud for insight

There’s an old saying that, “Sunlight is the best disinfectant.” It has less to do with the actual impact of the sun’s rays on bacteria, and more to do with the impact that transparency can have on any number of things, from politicians to employee behavior. 

The saying has survived the test of time because it’s true. The more transparency you have into something’s inner workings, what’s really going on, the easier it is to identify malicious behavior, locate problems, and take steps to correct issues. 

Imagine that you’re an owner of multiple buildings or developments. Let’s say they’re shopping malls. Or a number of those mixed-use communities that are all of the rage these days among millennials looking to live near-ish to cities. Or multiple co-working spaces located in various urban environments across the globe. How do you know what’s happening in your buildings, developments, and co-working offices that could be costing you money? 

How do you know if energy is being wasted? Or if the heat and lights are turned on and turned up in the dead of night when nobody is around? Or if the mechanical equipment is being abused, overworked, or not being maintained? 

Without transparency into what’s happening in your buildings, developments, or offices, you can’t identify tenant and facility management behaviors that could be costing you money. It’s impossible to compare usage from facility to facility to identify outliers. You simply have to sit back month after month, collect and pay bills without really knowing what’s impacting the numbers on the page and how you can change them. 

The transparency needed to root out these issues is available, thanks to OEMs that have embraced the cloud. 

Cloud means more transparency

By cloud-enabling today’s advanced equipment, OEMs that manufacture that equipment are creating a pathway for building and property owners and facilities managers with multiple, disparate locations to get the transparency they need to better manage their properties. 

Using cloud solutions and gateways that are readily available on the market today, these OEMs can enable the building owners to see the data generated by all of their equipment across all of their disparate properties in a single dashboard. The analytics can be easily displayed, analyzed, and compared to identify which properties are outliers, and then take steps to correct them. 

By comparing electricity, heating, and cooling usage, building owners can establish benchmarks and averages. From there, properties and buildings that are below the averages can be analyzed for systems and practices that could be rolled out across the organization to make everyone better. Those that are above the benchmarks can be given plans and incentives to get their usage numbers down to,  or below,  benchmarks. 

Let’s think about how this could play out in the real world. 

Co-working case study shows the capabilities of the cloud

Let’s say you own one of those trendy co-working companies. You know, one of the companies that has a floor or two in a handful of buildings in each major city on most continents. 

You’re not an IT person. You’re also not a facilities manager or an expert in industrial/commercial equipment. You don’t know what BACnet is, and you don’t care to find out. But you do have a handful of offices that are racking up massive electricity bills, and a few that are calling for HVAC maintenance and service really frequently and costing you a fortune. 

By utilizing a cloud gateway to gather and harvest the usage data from all of your equipment across all of your properties, you can now get usage statistics and data to a single dashboard or pane of glass where it can be visualized, compared, and analyzed. 

When referencing your dashboard, you find that the co-working offices on Wall Street in New York City, and the offices in Northern Virginia, right outside of Washington, D.C., are burning through more energy than most of the other facilities that the company operates. 

You also notice that San Francisco is one of the lowest users of energy across the entire company. You now have the power and insight necessary to reach out to the individuals operating the San Francisco offices to identify what they’re doing right. You can then pass those best practices off to the Northern Virginia and Wall Street offices to help them improve while giving them goals and deadlines to meet. 

Today’s modern commercial and industrial equipment is generating a mountain of data thanks in large part to OEMs cloud-enabling their products. If building owners and managers embraced the same cloud gateways and technologies to harvest the usage data from their own equipment, they’d have the transparency they need to find problems, fix them and increase the profitability of their operations.   

The impact of cloud-enabled equipment on service contracts

In our last post, I took a detailed look into how equipment owners sometimes mistreat their equipment and abuse their warranties, and how this can negatively impact  OEMs. I also looked at the role that equipment data, harvested and delivered via the cloud, could play in helping OEMs identify if their equipment has been used in ways that would void warranties and fight back against warranty abuse. 

However, when it comes to warranties and service contracts, abuse is just one of the challenges. Sometimes, the larger challenge is selling the service contract in the first place. 

Many of us have gone to an electronics store, or a car dealership, or another retail store where we’ve bought an expensive item and been pestered to buy an extended warranty. We’re harangued with warnings about what will happen to us if our product fails after the expiration of its existing warranty to scare us into purchasing extended warranties that we ultimately never use and only function to generate commissions for our salesperson. 

This customer experience has ultimately resulted in a generation of consumers that are wary of service contracts and extended warranties out of fear that we’re being talked into scams. But when it comes to commercial and industrial equipment, service contracts are often wise investments. 

This equipment is often essential for a business. It helps keep buildings habitable, it keeps factory lines moving, and it universally powers others to do their jobs. This equipment is often costly to replace, and replacing it can significantly cut into a company’s productivity. Having service contracts with OEMs can save equipment owners significant heartache down the road, but they’re still resistant to purchasing them. 

What can OEMs do to illustrate the true value of their service contracts to their equipment owners and sell more service contracts? The answer lies in data and business intelligence. 

Know thy customer, sell thine contracts

Often, selling a service contract to an equipment owner is difficult because OEMs aren’t selling something tangible. They’re not selling a piece of equipment that will help them do their job. They’re effectively selling insurance on that equipment, should it break down and need to be repaired. 

In this instance, it’s essential that the OEM illustrates the value of the service contract to that specific equipment manufacturer. And the best way to do so is to understand how the equipment owner uses their equipment, and how that specific usage impacts the life and functionality of the equipment over time. 

For example, if you know that a piece of equipment is the backbone of a factory’s operations and is used consistently for large periods of time a day, you can effectively convey the value of a service contract over time by illustrating the wear-and-tear that this heavy usage has on the equipment. If heavy usage and wear-and-tear has the potential to create problems three years after a new piece of equipment is installed, adding a service contract that covers the equipment past its two-year warranty makes sense for that equipment owner. 

This level of transparency and business intelligence is available to the OEM by simply cloud-enabling their equipment and harvesting the data from that equipment. By gathering usage data and other critical information from each piece of equipment in the field, the OEM can learn more about how it’s used, how it’s performing, and put itself in a position to better illustrate the value of their service contracts to their customers. 

The cloud can do more than help OEMs sell service contracts; it can also help them fulfill them. 

Service so good it’s alarming

Inherent in some OEM service contracts are milestone maintenance and service visits when equipment has reached a certain amount of use or time in service. This is very similar to how your dealership may service your new car. You’re encouraged to bring it in after the first 10,000 miles for routine maintenance and ensure everything is working as intended. 

If the OEM doesn’t know how much use a piece of equipment has, or how long it’s been in service, it can be difficult to ensure that they’re rolling a truck for routine service at the right time. And that’s where cloud-enabling their equipment can help. 

Equipment isn’t always installed and put into service the day it leaves the factory. Sometimes, it can sit in storage before it’s sold. Sometimes, it is sold and held onto until a professional is available to come and install it. These variables all make it harder to ensure that milestone maintenance is being done at the optimal time. 

However, cloud-enabled equipment can report back to the OEMs and let them know when the equipment was installed, or the amount of time it’s been in service. It will even let them know how much usage it’s seen since, much like cars, some owners use their equipment more than others. The OEM can even set up alarms to notify them proactively when their equipment hits a certain amount of usage or time in service. 

With this data in hand, OEMs can make better, more informed decisions about when to schedule milestone maintenance and deliver more timely service to their service contract holders.

There’s another benefit that OEMs can get out of their equipment data and business intelligence, and that involves the sales process. 

More effective sales through data

Many salespeople would attest that growing your business with an existing account or customer in good standing is easier than finding new accounts and customers. The data and business intelligence that OEMs generate about how their existing customers use their equipment could open the door to growing their business within that customer, and make it easier to upsell that customer in the future. 

For example, if a customer is using a piece of equipment for a specific task, but that equipment is underpowered for the task, the OEM can analyze its data and identify that problem. From there, the OEM can reach out to the customer to sell them an upgraded unit now or use this knowledge to ensure they purchase the right piece of equipment in the future. Or, maybe the OEM uses that knowledge to sell the customer a second unit to help reduce the burden on the first. 

Regardless, knowing more about how existing customers are using their equipment generates business intelligence that can help OEMs sell to those customers in the future. Whether it’s new equipment or service contracts, better data means more personalized sales calls, which translates to happier customers and higher revenues.          

How data and transparency help OEMs fight warranty abuse

If you’ve ever purchased a television, cell phone, washing machine, car, or other expensive pieces of consumer technology or equipment, you’re probably familiar with the concepts of a warranty and service contract. They exist to help protect the consumer and give them peace of mind in case a product that they spent a lot of money on turns out to be defective, or fails to perform for an ideal period of time. 

Well, commercial and industrial equipment is very similar to those consumer products. They are significant investments for facilities managers, building owners, or factory operators, and they have a severe impact on operations should they fail. 

For that reason, the  OEMs that create commercial and industrial equipment and machinery warranty their products for a certain period, usually about two years. This is also why these OEMs will sell service contracts following those two years so that the owners can have their equipment maintained and repaired even after the warranty period since it would be a significant financial burden to replace. 

Warranties and service contracts create interesting challenges for OEMs. Warranties can be abused by owners and become an albatross for the manufacturer. Service contracts can be a profit center for OEMs, but they’re sometimes hard to sell. The cloud can help OEMs overcome both of those challenges. 

What is warranty abuse?

We all want to assume that everyone is on the up-and-up, but that’s not always the case. There are some folks that will use a piece of equipment or a product for purposes that it isn’t meant for. They’ll use it in conditions that aren’t ideal. They’ll try to install it themselves instead of hiring a professional to save a quick buck and not set it up properly. Or, they’ll skip recommended servicing and maintenance because it would be inconvenient for them. 

Then, when that piece of equipment fails because it’s not being used correctly or in ideal conditions, or because it wasn’t set up to the manufacturer’s specifications, or because it wasn’t properly cared for, they try to get the OEM to fix it at their expense because it’s under warranty. 

Warranties often come with conditions, and they will be voided under certain circumstances. However, it can be difficult for an OEM to identify if the conditions of their warranty have been violated. This can lead to an OEM using its resources, rolling out a truck and repair person, at no cost to the owner to repair a product when the owner should be compensating them for that time and service. 

This may seem somewhat innocuous, but it’s a waste, plain and simple. That truck and repair personnel are being utilized for a job that the company isn’t getting paid for when it should be. And that job is keeping that resource from servicing another paying customer. The result is lost revenue and productivity for the OEM. But what can they do about it? 

Combating warranty waste and abuse

There is a way for the OEM to identify this abuse of its warranties in advance. Cloud-enabling their equipment will have given the OEM insight into the product following its installation to ensure that it was set up correctly. Data available via the cloud could be used to gain insight into the conditions that the equipment was operating in and if it was being abused by the owner. It could even be used to ensure that all recommended maintenance had been done. 

Without transparency, the OEM has no window into how its products have been used by the equipment owner. They don’t know if they’ve been abused, installed incorrectly, or serviced to their specifications. They can guess when they get on-site to do a repair, but they lack the evidence to justify charging the equipment owner for servicing their equipment. 

By cloud-enabling their equipment and harvesting their data from the field, OEMs can gain valuable insight and transparency into their products and how they’re being used. That can go a long way towards ensuring that revenue, time, and productivity isn’t lost servicing a warranty-abusing customer.