Smart Services: Mechanical Engineering Companies as Service Providers

The understanding of service is changing fundamentally. What used to be considered good service is now taken for granted. Availability by phone and the provision of spare parts information are no longer enough to retain and inspire customers in the long term.  

Companies in the consumer environment are therefore striving for more today: they want to achieve first-class service on all channels and offer their customers more self-service options in order to improve the customer experience. The goal is an all-round positive experience for the customer.  

In mechanical and plant engineering, too, the focus is shifting from product to service. According to the German Fraunhofer study “Smart Services im Maschinenbau” (translation: "Smart Services in Mechanical Engineering"), this shift is changing the relationship between the companies that manufacture plant and machinery and those who use them: Services from machine and plant manufacturers are not sold like conventional products, but are designed and developed together with customers. The prerequisites for this are digitized processes and cloud-based tools - the result is smart services.

Before we continue: Have you already read the first part of our three-part blog series on the Quanos InfoTwin?

Smart services definition and benefits

Smart services are intelligent services based on data from machines and plants. Collecting and evaluating this data offers added value for both manufacturers and operators. This is because the data  

• clarifies interrelationships 

• reduces errors 

• shows potential for optimization 

• simplifies maintenance procedures 

• shortens downtimes 

• reduces costs and effort  

• improves industrial value chains 

Manufacturers and plant operators benefit equally from smart services in mechanical engineering. But only if the products are "intelligent" and networked and there is an active exchange between machine builders and plant operators. For example, in order to predict the maintenance requirements of a machine as accurately as possible, data is needed from both the machine manufacturer and the operator.  

Prerequisites for smart services: 

• Smart products - in mechanical and plant engineering, smart products are defined as, for example, machines that supply data about their condition via sensors. 

• Cloud platforms - in other words, software solutions that collect and consolidate data from ongoing operations and offer analytics functions so that manufacturers and operators can draw the right conclusions.

Smart services examples from practice 

The best-known example of smart services in industrial applications is predictive maintenance. Predictive maintenance makes it possible to forecast when failures are imminent and what maintenance is needed for machines and systems. To do this, artificial intelligence evaluates characteristic data, for example from a motor, and compares it with standard values to find deviations. 

With this information, service technicians can plan their work better and order the right spare parts. The scope of maintenance work can thus be reduced. It also saves technicians time and effort - and that saves customers money in the end. 

Equipment as a service is also becoming increasingly popular - a model that is particularly exciting in terms of monetizing smart services. Customers do not buy the equipment or the machine from the manufacturer, but a service package that guarantees them smooth operation of their plant. So they pay for the output they can achieve.

How can smart services be implemented and monetized?  

Smart services allow companies to generate added value from the data of their machines and plants and to monetize it. This enables them to stabilize their after-sales revenue. But most machine and plant manufacturers have yet to find an answer to the question of how smart services can be implemented in the first place - and what goals they want to pursue with them.

Majority strives for customer care 

To find answers to this question, the Fraunhofer study surveyed 15 experts from the mechanical and plant engineering sector, most of whom work for SMEs. The majority of the experts pursue a "Total Customer Care" approach. This means: They want to adapt their service offering to the wishes of their customers. But resources for this are scarce. The shortage of skilled workers, cost pressures and revenue shortfalls make many companies hesitant to implement smart services.  

In 2021, the Smart Services Competence Center surveyed 150 companies on their experiences with the topic as part of the German study „Smart Services – Mit digital unterstützten Dienstleistungen in die Zukunft“ (translation: "Smart Services - Into the Future with Digitally Supported Services"). The result: Compared to large organizations, small and medium-sized companies are clearly falling behind. 20 percent of them say they are about to introduce smart services or already have an application in use. Among large companies, the figure is 54 percent.