A Process Reference Model for Service Delivery in After-Sales Field Service Networks

Transcription

1 A Process Reference Model for Service Delivery in After-Sales Field Service Networks Philipp Hertz 1, Gandolf Finke 1, Stephan Verhasselt 1 1 ETH Zurich, BWI Center for Industrial Management, 8092 Zurich, Switzerland {phertz@ethz.ch, gfinke@ethz.ch, sverhasselt}@ethz.ch Abstract. After-sales services bundled to products, respectively integrated Product-Service-Systems, have gained financial and strategic importance in manufacturing companies. Not considered as core competence in the beginning, the structures for delivering ASFS have grown over years, becoming more complex and less transparent. As industry still lacks tools and methods for ASFS network design and planning we propose a process reference model (PRM) for modeling the different activities in service operations that are linked to service delivery. The PRM has been developed in case research with different Swiss companies and will be used to form the basis for a quantitative planning tool with the aim of enhancing decision making in this area. Keywords: after-sales service, field service, network design, process reference model, process blueprint, simulation 1 Introduction After-sales field services (ASFS) have become a main business pillar for many high quality machine and equipment manufacturers in Europe. To stay competitive in a globalized market, technology and quality leaders in these sectors seek to gain competitive advantages from their service activities and to provide greater value to their customers. Therefore, so called Industrial Product- Service Systems (IPS2) are fostered that do not focus on products sales only but on the use of the product by offering service contracts or proactive maintenance [1]. Additionally, the after-sales business has gained financial importance, as it contributes to more than 25 percent of all revenues and up to percent of all profits in many companies in this sector [2]. The problem many companies face in this development is that they are confronted with a highly dynamic business field which comprises many uncertainties. In comparison to network design in the manufacturing discipline the planning problem is much more complex which makes designing and managing ASFS networks a difficult task. Demand for ASFS is highly variable and difficult to forecast, time crucial and cannot be backordered without incurring high costs [3]. In addition to the spare parts supply chain which has to deal with much more SKUs and less stock turnover [4], a highly skilled labor force is needed which is expensive and difficult to operate at full capacity.

2 The research project AsPlanned funded through the Swiss Commission for Technology and Innovation CTI (CTI no.: PFES-ES) has been launched to resolve this problem and to provide a structured and holistic approach for the strategic design of ASFS networks which will be constructed around a simulation tool. As basis for developing the simulation model a process reference model (PRM) needs to be constructed that allows for modeling all activities that are relevant and ASFS delivery. 2 Process Reference Models in Literature and Praxis Companies operating in ASFS business face the problem, that their domain lacks reference models that support them in creating an efficient and transparent process organization and allow for internal and external benchmarking. According to Heinzel et al. 73% of the service providers participating in a survey stated that they are not using any reference framework or standards to map their processes that integrate their business with the manufacturers [5]. Companies that provide IPS2 struggle to accomplish transparency and standardization in their organizational processes that have grown with the business and gained complexity due to a lack of global standards or a predominant PRM, as the SCOR model in the area of supply chain management [6]. This evaluation is shared by many researchers as Becker et al. [7] who identified a current lack in explanatory power to sufficiently guide manufacturing and service in understanding, engineering and operating product-service systems in their research. Reference models are constructed to provide a guideline for best practice and standard approaches in the after sales field service domain. Fettke, Loos and Zwicker define reference models as generic conceptual models that formalize recommended and standard practices for a certain domain and might be used to blueprint process organizations or to streamline them [8]. Reference models represent dynamic aspects of a company, e.g. activity sequences required to delivery certain maintenance or repair services to a customer. They allow reducing the costs of developing particular models while facilitating the management and control of the organization. Most of the reference models available in the literature are completely or partly done by scientists (inductive), only a small amount of them were developed by practitioners (deductive) [8]. To build the basis for describing generic activity types that can be used as a basis for the simulation model several PRMs were in the focus of investigation. 2.1 Literature Review The most relevant contributions for this research were found in the areas of manufacturing and service management or Modeling of Information Systems (MIS) and are shortly depicted in the following. Most modeling frameworks include a performance measurement system which will be not in focus of this paper. Cavalieri et al. propose a reference model for enabling after-sales performance measurement based on the SCOR model [9]. The model named ASCOR, based on the

3 same semantic structure as the SCOR model, distinguishes between three different process categories and front- and back-office processes that are referred to as internal and external. The three categories are plan, execution and enable. Enabling activities mostly focus on definition and management processes that build the basis for an efficient network. The planning processes incorporate identification of service and spare parts demand based on which a service plan is generated that balances availability of resources against customer requirements. The most relevant contribution on an operative level is provided with the definition of the execution activities. The activities cover customer care and assistance classification in interaction with the customer, logistics functions as procurement, warehouse support, reverse logistics, delivery and after-sales services as installation, maintenance or repair. Other activities not directly involved in service delivery are for example technical documentation and other supporting functions. Thereby model includes most activities that are relevant in field service delivery but only in little detail. Based on the ASCOR model Gaiardelli developed a performance measurement system for AS services for the business and process level inter alia [10]. The Customer Chain Operations Reference (CCOR) model has been developed by the Supply Chain Council and is structured in three levels [11]. It has the same sematic structure as the SCOR model which means is consist of 3 levels. Level 1 defines the process type which categorizes all activities in a service business in plan, relate, sell, contract and assist processes. Further detail is added in the 2 nd level that specifies the process category and the 3 rd that depicts the process elements and activities. Assist processes representing the most relevant type for modeling service execution are categorized in self, remote and on-site assist. Self assists refers to enabling customers to perform post-sales support for the products/services provided (e.g. providing access to support libraries and responding to customer inquiries), while the remote and on-site processes also include assigning resources from the service provider to inquiries for technical support off- and on-site, respectively. Each process, down to the 3 rd level owns a definition, related metrics and key in- and outputs. Though the model seems to be a good fit its granularity is too low, especially regarding predefined in- and outputs. The InCoCo-S (Innovation, Coordination and Collaboration in Service Networks) Reference Model (IRM) is a Service Reference Model that has been developed in a project co-funded by the European Commission [12]. The model is structured in three levels and considers five different service clusters (logistics, maintenance, retrofit, packaging, quality control). Adapt, build and operate represent the highest hierarchical level and are detailed by different sub-processes which are defined and specified regarding information flow (in- and output) and KPIs. Furthermore each processes is assigned to a specific process type (plan, execute, support). Another approach of high relevance is the Reference Model for the Delivery of Industrial Services (RDIS). Only parts of this model are publically available. A reference process for corrective maintenance is provided in PAS 1047 [13] which consists of six main functions that possess different variants. Each process is initiated by an incident generated by a product (remote technology) or customer. From the MIS area the IT Infrastructure library (ITIL) represent a collection of best practice publications that describe an implementation of IT-Service-Management and has established itself as the most widely adopted approach for IT Service

4 Management in the world [14]. Next to organizational structure, service strategy, design and transition it includes a reference model for service operation. Service operation processes are structured in event management, request fulfillment, incident management, problem management and access management. The description of the processes is kept very generic and resources are categorized by different roles. In incident management (system interruption or malfunction) an incident can be solved on three different levels (e.g. hotline, service technician, product development). The process description is quite detailed regarding the information processing in the ITsystem and escalation of the process. The most important main- and sub-processes of the different reference models that have been investigated are depicted in appendix A. The process description of most contributions, especially the CCOR, is extensive and can be used as a basis for our new PRM. Nevertheless the lowest level of description in all models is not detailed enough for modeling operations in an ASFS network. The resources involved in the different activities and their relevance for the process remains unclear in most models (except ITIL). The process descriptions based on in- and outputs has to be elaborated in more detail to allow modeling cause-effect relationships in each activity. Though the lowest process level of the different PRMs provides many activity types, important activities of STs, e.g. idle times and traveling, are missing. Therefore the existing approaches have to be enhanced by a PRM that comprises generic activity types in ASFS networks with well-defined in- and output relationships and can be used for simulation modeling, performance measurement and benchmarking. 2 Methodology Developing a new PRM can be regarded as theory building by providing a new conceptual framework to the research community. Hereby it is essential to have insights into service organizations and their operational processes. As case study methodology is especially applicable for developing theories from practice in areas where research and theory are at their early, formative stages [15], it was used in our research. Five companies in the field of ASFS in the machine and equipment industry were selected that comprise small and large companies with local and global service operations in different industries to form the consortium for the research project and guarantee for generalizability of the results. Data was gathered guided by a research protocol on each site mainly through semi-structured interviews with relevant organizational units such as technical support, logistics and operations. It was supplemented by documents, e.g. contracts, process descriptions, contracts, organizational charts and historical records from IT-systems. To foster common understanding of the terminology official industrial standards (DIN, ISO, PAS) were used in the research process.

5 3 A Reference Model for Modeling Processes in ASFS Networks The PRM proposed in this section is closely linked to the definition and parameterization of the different resources in an ASFS network which encompass the customers and their assets, i.e. the objects to be serviced, on the demand side and employees, service parts (SPs), the mode of transportation and warehouses on the supply side [16]. The PRM for ASFS operation is structured as follows. Operational processes represent a sequence of different activities and start with an incident, e.g. the closure of a maintenance contract, or report of a machine breakdown via remote monitoring or customer contact. Activities with no direct involvement of service provider resources in service operations, e.g. knowledge management, are not considered in the PRM. Services the companies offer and deliver are structured in categories which combine different service types (e.g. service category=routine maintenance, type=carefree maintenance package). 2.1 Activity Types Fig. 1 provides an overview of all different activity types identified in the project. Fig. 1. Overview of activity types in ASFS networks In a first instance activities were categorized according to their value-adding characteristics in the service network. Productive activities are the most essential for delivering service to the customer and can be divided into administrative, technical support, and transfer activities. Indirect activities such as organizational meetings and trainings are not directly adding value but might be necessary respectively create value by improving qualification in the network. Like unproductive activities, e.g. the absence of personal due to vacation or idle times, they reduce the capacity of personal for service delivery. A short description of the different productive activity types will be given in the following. Administrative activities Administrative activities are mostly conducted by non-technical staff, e.g. dispatchers, logisticians or back office staff. Job planning and dispatching is a central operative planning activity that includes dispatching of spare parts, tools or STs.

6 Especially when assigning STs to jobs planners need to take several factors into consideration like availability, work load and skill, etc. Ticket creation involves the automatic or manual logging-in of information regarding, customer, asset and demanded service while service parts delivery administration includes the order processing of SPs including stock management, procurement of parts and the preparation of documents, packing and organization of transport. Offer administration activities come into play when services are not fully covered by contracts and require customer approval. Technical support activities The most important activities in ASFS network refer to direct technical support, e.g. installation, training of customer staff, or maintenance activities [2, 17], on- or off-site. In case of unplanned interventions a clarification of the specific service needed is necessary whereas planned activities can be executed directly if all resources are available. Location transfer activities Location transfer activities refer to the change of position of different resources, respectively the travel of STs to different network nodes or the delivery of spare parts to customer sides. 2.1 Input-Output transformation Each activity is modeled by predefined in- and outputs that are activity specific or provided by the resources involved in execution. The description of the conversion of in- to outputs is essential, as the activities will be used for simulation modeling. Therefore a quantitative relationship between the different parameters needs to be established. To illustrate our approach one activity type, the location transfer of STs, will be described (depicted in Fig. 2). Fig. 2. Parameterization of transfer of service technician activity Main Inputs to this activity are current and target location of the ST and a transfer matrix for the description of the traveling times on the different routes. Traveling times in this matrix must be provided depending on starting time, weekday (e.g. due

7 to traffic) and mode of transportation (e.g. plain, car). Other inputs comprise the possibility of spare part pick up, which makes part delivery obsolete and the possibility to abort the activity due an external exception (e.g. new emergency job). All input-output relations are recorded in a standardized format as depicted in Fig. 2. Nr. Category Subcategory Element/ActivityCause Effect Quantitative relation Description Proof in Data The location of the ST is changed by the activity from current to target 34 Activity Input-Output Transfer of ST Target Location Current location Replacement loation / Rushhour: Multiplicator (1.1 10) If appropiate (e.g. for transfers in cities) the daytime needs to be considered in the Transfer Matrix or 36 Activity Input-Output Transfer of ST Daytime Activity time or separate Tranfer Matrix be adjusted by a multiplicator tpd Fig. 3. Example of input-output relation record A similar structure exists for all activity types. Activity types, including in- and outputs have been derived in collaboration with the industry partners. Current research in the project is focused on verifying the different relations based on company ERP data. In combination with the data model for the network elements the proposed PRM for ASFS network design will be used to allow companies modeling their network and thereby creating a simulation model for strategic decision support. 3 Conclusion and Discussion In this paper we have introduced a PRM for modeling ASFS activities that allows for supporting network design by providing a basis for the quantification of processes in ASFS networks. As the first step in the project can be categorized as theory building, the established framework needs to be validated and verified. After this step the PRM will allow for investigating the characteristic and dynamics of ASFS networks of different companies. It will provide companies with the possibility to map their processes and generate an easy interface to simulation building meanwhile opportunities for benchmarking, transparency and standardization are enhanced. Furthermore, the proposed in- and output relations might generate new insights when tested with own operational data. The use of quantitative techniques in ASFS network design for detailed analysis of different demand scenarios, network resource reallocations, changes in qualification or dispatching strategy or organizational changes will become more important in the future as the effects of the introduction of new concepts in e.g. the service organization (real-time expert support for STs) is hard to analysis without any tool for decision support. Limitations of the approach regarding its functionality are that only stationary service objects can be modeled and so far little attention has been devoted to spare parts processes which could be modeled more sophisticatedly in the future. Also the PRM presented in this paper represents a preliminary result and might be subject to chances in the verification process.

8 References 1. Meier, H., R. Roy, and G. Seliger, Industrial Product-Service Systems--IPS2. CIRP Annals - Manufacturing Technology, (2): p Dennis, M.J. and A. Kambil, Service management: Building profits after the sales. Supply Chain Management Review, (1): p Abernathy, W.J., et al., A Three-Stage Manpower Planning and Scheduling Model - A Service-Sector Example. Operations Research, (3): p Cohen, M.A., N. Agrawal, and V. Agrawal, Winning in the Aftermarket. Harvard Business Review, (5): p Heinzel, H., A. Garg, and S. Schleyer, Integrating Industrial Services into Manufacturing Supply Chains, in BPTrends Legnani, E., S. Cavalieria, and S. Ierace, A framework for the configuration of after-sales service processes. Production Planning & Control, (2): p Becker, J., D. Beverungen, and R. Knackstedt, Reference Models and Modeling Languages for Product-Service Systems Status-Quo and Perspectives for Further Research, in 41st Annual Hawaii International Conference on System Sciences p Fettke, P., P. Loos, and J. Zwicker, Business Process Reference Models: Survey and Classification, in Business Process Management Workshops, C. Bussler and A. Haller, Editors. 2006, Springer Berlin / Heidelberg. p Cavalieri, S., A. Brun, and S. Ierace. After Sales Processes in the SCOR model: a proposal and an empirical application. in 14th International Working Seminar on Production Economics Innsbruck, Austria. 10. Gaiardelli, P., N. Saccani, and L. Songini, Performance measurement of the after-sales service network--evidence from the automotive industry. Computers in Industry, (7): p SCOR (2010) Customer-Chain Operations Reference-model. 12. Osadsky, P., et al., Improving Service Operation Performance by a Cross- Industry Reference Model, in Advances in Production Management Systems, J. Olhager and F. Persson, Editors. 2007, Springer Boston. p DIN, PAS 1047: Reference Model for the Delivery of Industrial Services - Corrective Maintenance. Berlin: Beuth, Van Bon, J., Foundations of It Service Management Basierend Auf Itil V3: German Edition. Vol : Van Haren Publishing. 15. Benbasat, I., D.K. Goldstein, and M. Mead, The case research strategy in studies of information systems. MIS quarterly, 1987: p Finke, G.R., P. Hertz, and S. Verhasselt. Categorization and parameterization of network elements in after-sales field services. in APMS 2011 International Conference - Advances in Production Management Systems Stavanger, Norway. 17. DIN, E., 13306: Begriffe der Instandhaltung. Berlin: Beuth, 2001.

9 Appendix A PRM 1 st level categorization Activity types ASCOR Plan, Execution and Enable Execution Assistance classification Procurement Delivery/installation of the product, Maintenance, Repair and substitution, Technical documentation CCOR Plan, Relate, Sell, Contract Assist (self, remote, on-site) and Assist Receive Inquiry/Request Route Request Identify Solution Propose Solution Release Solution to Customer Close Request Distribute Solution Authorize Request Schedule On-site Assist Obtain Materials Repair Product Dispose Materials IRM Adapt, Build and Operate Operate Maintenance Identify, prioritize and aggregate Operate requirements Identify, prioritize and aggregate Operate resources Allocate Operate resources to requirements Establish Operate Plan Analyse Call for Breakdown Maintenance Schedule Measurement Activities Measure and Store Production System Data Analyse Measured Data Create & Communicate Maintenance Recommendations Schedule Maintenance Activities Operate Breakdown Maintenance Intervention Operate Planned Maintenance Intervention Process Customer Feedback and Generate Maintenance Report Invoice, Track & Receive Payments RDIS Core process, Main Corrective Maintenance function, Function variants Create ticket Clarify problem Plan & dispatch job Perform solution finding &repair Report & close ticket technically Invoice service ITIL Event management, Incident management Request fulfillment, Detect, record Incident management, Classification Problem management and Investigation, Diagnosis Access management Resolve, Recover Service Closure