Customer Satisfaction in Mechanical Engineering through Digital Services and Business Models

How is the mechanical and plant engineering industry moving towards the Industrial Internet of Things? Where does the greatest added value lie today and what do customers need today and in the future?

Today you will get exactly these answers and some more insights directly from practice from Sandra Oerter, Commercial Head of Service at “HESS Group”, a worldwide leading supplier of so-called “high performance concrete block machines” and their partner “Kontron AIS”, today represented by Martin Falsner. He himself has a background in mechanical and plant engineering and is a real expert in digitalization, service and After Sales.

I bet you that when you listen to this episode, you will definitely see the final product, what the machines and equipment of the HESS Group produce in front of your eyes. Pay attention to your surroundings and listen carefully, because which products they are, you will find out right now.

Hello Martin and Sandra! I am very happy that you are with us today. Sandra, how are you and where are you right now?

Sandra

Hi Madeleine, thank you so much for the invitation! I am doing well, I am at the site in Burbach in beautiful weather and have retreated to a meeting room so that I can be fully available to you.

Burbach HESS Group, I’m typing that into Google right now. You are in the region of Siegen, Marburg.

Sandra

Exactly, geographically between Cologne and Frankfurt, on the beautiful Sauerland line, very central.

It’s probably worth stopping by. Martin, how are you and where are you?

Martin

Thanks for having me, I’m honored to participate in the podcast! I’m currently in Dresden, at our headquarters. The sun is shining at the moment, there is also a little snow and I am looking forward to the conversation.

I’ll even be there one more time this year, you have a great event in June, so I’m really looking forward to seeing you in person again in addition to the trade shows.

Martin

This is our user conference, which is held every year and is on June 15 and 16. That’s where all our customers come and I would like to extend an invitation, whoever wants to come is welcome.

Your contact details are already linked in the show notes!

You’ve already been on the podcast with Kontron; I think it was episode 34 with your colleague, Vanessa. That was about the topic of the IIoT service platform. You have a customer portal with the Equipment Cloud, a very exciting episode! Generally speaking, you are a systems and software company, and above all you also have a solution for factory and manufacturing automation.

You are primarily specialized in the topics “Digitalization, Service and After Sales”. Can you briefly describe exactly what your department does and what clients you work with?

Martin

My department has the Equipment Cloud product. Some customers say that’s an enterprise solution for the small and medium sized business; you can cover a lot with that. Our main focus today will be on “Service and After Sales”. Here we offer a solution where you can immediately start and can inspire your customers for.

We are at home with start-up companies, we supply machine builders, and we are active in the automotive and semiconductor industries; these are our customers.

The topic of sustainability is also important to us. There we have customers in the field of “photovoltaic production”. There are also groups involved in the topic of “crystallization”.

At the end of the day, it’s a colorful bouquet, but what unites them all is the theme of “mechanical and plant engineering”.

You have a wide variety of projects with your customers; can you explain what use cases you have in that environment?

Martin

We have several customers who are dealing with the topic of “customer portal”. The point is that when a project is handed over by Sales, it ends up in Project Management. That’s where you start to get the customer involved. You give them access to the portal, there they can find their project flowchart, and they’re tied into the whole lifecycle process of how the machine is manufactured, all the way through to service. This creates acceptance and provides a voice within the company.

Another use case is the topic “data acquisition”. When data is aggregated from machines, it is not only stored, but also added value. They are analyzed and “recommendation management topics” are developed from them as a business idea.

At the end of the day, it’s about running a proactive service. Not waiting until the customer calls and has a need, but actively approaching the customer. This creates an incredibly good relationship between the machine builder and the user of the machine.

You brought Sandra with you; HESS Group is your client. Can you tell how you met and what the first contact was like?

Martin

That was a good year and a half ago. I noticed that HESS Group has been on the move, has been using our product for a while. It came up at a user conference on the topic of “business models” and we had had a pitch with another partner who was also in the group – the TopWerk group – where we say: Let’s get going! Offer your customers more than just steel and the product machines, offer services! That was the point where HESS had already made some progress. So we came together more and more.

At one point Sandra and I had a meeting via Microsoft Teams. I have to say that I liked her from the first moment and saw potential straight away. I had already sensed that at that time.

We had seen each other live for the first time at bauma last year and got to know each other; from Teams we went to reality.

Sandra

As the TopWerk Group, we decided some time ago that we would take up the topic of predictive maintenance and chose Kontron AIS as our partner. Then we had the feeling that they understood us, that we needed people from the field. As the project progressed, at some point the topic of the customer portal came up and the service was called in. That’s how we got to know each other and can now look back on a very successful collaboration.

Sandra, with the HESS Group you are the world’s leading suppliers of so-called high-performance concrete block machines, but also dosing and mixing plants as well as packaging and conveying technology; all made in Germany.

 

If one searches you on Google, a picture of a concrete block machine is displayed directly, an insanely complex machine. I believe it can be used to make a variety of concrete products from pavers, which we all know from the street, to concrete slabs. Is that right for now?

Sandra

Exactly, they are concrete block machines, that is important. Customers actually make pavers and patio slabs, the complete portfolio. The major customers are, among others, DIY stores. The probability that listeners have pavers or even patio slabs from our machines is quite high.

Then we all already have a reference to it!

 

As manufacturers of these machines and systems, one of your visions is to work with data in the context of digitalization. Can you tell us what exactly your vision is towards digitization and where you want to go in the future?

Sandra

HESS has always been known to innovate early and like to be among the first. We want to work with our customers today to determine what they will need tomorrow. On this journey we take everyone, whether beginner or expert.

Our vision is: Together we take the easiest way to the best block. The vision and mission here is to provide the solutions for the overall process and also bridge the gap between physical and digital products. That’s important to us at this point, that we don’t say we’re digital as of today, but that we walk this path together.

Challenges, potentials and status quo – This is what the use case looks like in practice [10:17]

Can you share a little bit about what your After Sales looks like and what kind of processes you handle with your customers?

Sandra

In After Sales or Service, we have the classic spare parts business with spare and wear parts. In addition, we offer the retrofits and retrofitting. These result from the constant new developments in the new machine sector and will then also be available for the existing machines in the future. We also check the technical feasibility and plan this with the customer.

In addition – this is also classic – we have the hotline with the electrotechnical support. So if you want a program retrofit, a support, that also happens. In the event of a machine breakdown and analogous to the electrotechnical area, this support also applies to hydraulic and mechanical issues and in the area of process engineering and concrete technology.

What is important to us and where we are also proud of: We do not rest. Our product portfolio is constantly being expanded; we have had our own area development in service for around two years and are also in constant exchange with our customers and the technicians here. What can be done better? And for this we develop the service product. So far in the past, almost 100% physical, and now also in the area of digitalization with our customer portal.

You are a real pioneer in this industry. Can you explain a little bit more about the challenges you’ve seen with customers on a day-to-day basis?

Sandra

We had pilot customers; you can always think yourself that you are on the right track, but in the end: it’s for the customers! And that’s why we got the customers on board right from the start. These are then some points that you also have on the radar yourself, but there we want to create a basis for the customer, for a self-service, for the first step. Where do I access maintenance information? This maintenance manual is always there, but never where you need it.

Classic queries about end products with regard to quality: When does the block meet the requirements? Parts science – a very important topic – when does a wearing part, such as a scraper brush or a rubber buffer, need to be replaced so that the quality of the end product is not compromised? In addition to the technological progress of the machine, such challenges arise from young employees or also often in the industry lateral entrants with little or no professional experience. There is also sometimes a very high fluctuation and the company then starts again from scratch with the training.

One of the key points was a structured know-how transfer from the experienced, who will soon retire and make this knowledge tangible and available in the heads. The shortage of skilled workers is also a very big issue in this industry.

Martin

What you can see here is that the machine builder is increasingly becoming a partner for the end user.

By partner do you mean this collaboration, that one also offers proactive service?

Martin

Exactly, that you don’t just aggregate data, but that you create value from the data for the user of the machine. Then this acceptance is also given and both go into the exchange on a completely different level.

What types of data are you excited about for these projects with clients?

Sandra

We go to the machines and to the production data. You have to imagine it: The connection to the cloud has been made and the utilization of the machine, for example travel distances, is then used to determine when a part is to be replaced. For example, every 4000 cycles a certain item must be lubricated. This information is also in a paper form somewhere, but in the Smart Cloud we can point to it immediately. In this way, the operator at the machine receives the message: Okay, this article must now be lubricated. Communication with the machine is the prerequisite for refining and perfecting this data more and more.

Smart Cloud is that a term from you guys, where you sort of used this software from Kontron AIS? Or how should we understand this?

Sandra

Correct, this is our customer portal, which has been named Smart Cloud, based on Kontron AIS.

For other potential partners or customers who are also thinking along these lines, can you share what your technology requirements were? Why did you choose Kontron AIS and what were the technological requirements that the solution had to meet?

Sandra

Our biggest challenge was: our machines have a very broad age structure. We have – and we are very happy and proud about this – a lot of existing customers, but here it is quite common that they have four machines. One is two years old and the other is 20 years old. Of course, we would also like to connect the older machines.

Younger than two years is not a problem, that can be implemented immediately from the technological progress and with the older ones we do a technical feasibility check and if necessary we still need a bit of additional hardware in the form of a machine PC.

The Kontron AIS solution, this setting up of this software, bringing data together without much programming effort, that was incredibly convincing here. They had suitable solutions for every area we came up with.

Martin, you have gained a real fan over time!

 

Solutions, offerings and services – A look at the technologies used [18:02]

Sandra, can you briefly describe the contents of the solution or what the solution generally does, what this portal can do? Without getting too technical.

Sandra

This Smart Cloud, which includes all products of our Smart Family and in addition to basics such as classic machine data, personal contact persons with direct contact options, the machine documents, maintenance instructions, but also plant-specific news, you can view shift logs and the maintenance calendar. I can immediately set a service request out of the app, if desired, using AR technology. In the Knowledge Base there are then, for example, tutorials for the Save Server.

We have the Smart Parts section, which is our spare parts catalog. There I have all the parts of my machine available in 3D in the catalog. I get suggestions or see my order history if desired. You can set alarms or the throughput… we haven’t found anything that doesn’t work yet. I can also retrieve almost any KPI I want. All of this on my custom created dashboard.

Martin

Among other things, we offer our customers a service portal with which they can implement their digital business models in a measurable way in the short term. And our goal is for our service and after-sales customers to ultimately scale from a cost center to a profit center. We accompany them through the entire process! With every business model, of course, comes a new requirement. We are constantly in dialogue about how to adapt this to create a customer experience.

Sandra

What was very important to us was a 360-degree view of the machine with just one tool. The customer does not have to jump back and forth between three or four applications to find information. No matter what information the machine operator, the buyer or the CEO wants to have, it can be found here at the push of a button via the dashboard.

What I can highlight again, what I hear from a lot of customers, is this customization. You’ve brought in your own branding from HESS Group, where you name it Smart Cloud. You have an access portal, behind which is your equipment cloud, but you enable your own branding for customers, who in turn give access to their customers, your end customers, so to speak. This is also a great advantage for you probably.

Sandra

That was also important to us! The Equipment Cloud is great, Kontron AIS great, but we are towards our customer HESS, but also the TopWerk Gruppe itself: we wanted to have our own branding.

Martin, how do you do the analysis of the data? Do you do that or does your customer do that?

Martin

Ultimately, there is the possibility of aggregating the data by attaching an IoT device to a PLC of the machine, where selected data, which are in coordination with the end customers, are provided in the cloud. Data analysis is an important building block for customer loyalty, because the machine user, is given this as a tool to get cause-and-effect directly represented.

There are various analysis tools available. The simplest is the ratio model, surely known to one or the other. The point is, if I’m doing good maintenance, I want to have that measurable to some extent and I also want to see what did it do in terms of numbers, data and facts. The availability of the machine increases and so does the throughput and everything is interrelated.

It will become more and more the future and it is ultimately the innovation driver for machine and plant manufacturers. Starting with product management, when I understand where the Achilles heel of the machine is and can act on it in the new generation. This goes as far as saying that good service is becoming more and more measurable.

I am very sure and many will be able to confirm this: Service and after-sales will go toe-to-toe with sales in the immediate future. A completely new value of service will emerge.

I also think, especially Sandra, you as a manufacturer, you have the greatest expertise around your machine. You know exactly when to replace a rubber buffer. You are the expert in these insights and this data knowledge, and you bring this into the data analysis accordingly.

Sandra

That’s right, the customer benefits quickly or even immediately from the direct visualization of data, such as the maintenance calendar.

That certainly won’t happen tomorrow or the day after tomorrow, we have to be honest about that, but if we keep moving in the direction of predictive maintenance and train the smart cloud to do so, the machines will become even more efficient. More and more I support the customer in getting the best out of the machine.

You already have some pilot customers that are doing this with you and they’re seeing it. I believe that together we can bring out the best for the future.

 

Was that a challenge for you? That your end customers said: That’s too early or we don’t want to deal with that. Were you confronted with such critical questions from your customers?

Sandra

That was actually also one of our concerns when we started the project. This topic is discussed and communicated very transparently in customer meetings. We always ask that someone from IT be brought in right away, because they have questions that no one else can figure out, and we want to communicate that the data is secure. Many customers have already clearly recognized the added value and the topic of data actually only plays a minor role, but that was also surprising for us.

Martin, you also work with other machine and plant builders. What is it like for others? How do they see it?

Martin

Starting with conversations where you first tease the whole thing. There are sometimes the standard excuses: I don’t have time, I don’t have employees and I don’t have a budget; we supply steel and that is our competence.

But there are also really wonderful conversations where you also shake leads or prospects awake and say: Now it’s time, we’re taking it in hand! From our customers who choose it, in no time they can take off. Because it is a ready-made solution, you can scale wonderfully.

We don’t start with the entire equipment cloud, but successively accompany our customers along the entire customer journey. We have a project management team behind it, which runs the service check for the customer from the very first moment. Where is the service, where is the potential? Right up to machine integration; third-party systems such as ERP systems also integrate into the solution.

I think the most important point is that we have a colleague on board who does all the Customer Success Management. She permanently accompanies the customer and helps to take the next step and clarify questions. We do not sell just a solution, we sell the whole business model development system where we accompany our customers.

Business models are still a gray mass for many; or digital business models. We just want to bring clarity into it that it’s not just related to buying the solution, but it’s an entire mindset behind it that needs to be supported.

There is a structured transfer of know-how. This is an insanely important topic for you as a machine and plant manufacturer, to use the data, but also to create a win-win situation for your customer, because they get great added value from seeing a maintenance calendar digitally; everything that used to run manually.

We all have a smartphone, but the industry is still lagging behind. Anything is possible, why not do it? That’s exactly the way you’re going. I think that’s something where you have to work very closely and very much in partnership with customers.

For a company like you Sandra, you don’t build things like this yourselves. To have a partner like Kontron, who is an expert in a certain area, that is the customer portal topic, it only makes sense to buy something like that, because as a machine and plant manufacturer I don’t start to build something like that myself, do I?

Sandra

Exactly, this must be in proportion at the end of the day! Why should I reinvent the wheel when there is someone on the market who has already invented a very good wheel? I’d rather draw on experience. How did the others do it? Do you have any examples? That is always very important to us. We asked the same questions to Kontron AIS at the beginning.

Martin

We also experience that you are in a certain evaluation process and then the machine builder decides to develop this himself, to build up their own competencies, however, you can start with the solution immediately and inspire your customers. A certain amount of time passes before the mechanical engineer is ready; the whole thing has to be looked for in the DNA.

It’s technical specifics, we won’t go into that, but that you’ve already solved and things that, if you’re an expert in a field, you already see and have solved accordingly.

 

Results, Business Models and Best Practices – How Success is Measured [29:37]

Sandra, can you summarize the business case for you as a mechanical and plant engineering company? Do you have some kind of return-on-investment calculation?

Sandra

There is certainly a lot here that contributes to the bottom line. I have the channeling of information, thereby a much lower loss of information or knowledge, more efficient maintenance and servicing, through better planning ability automatically contributes to the increase in OEE.

This automated provision of key figures on demand and on a daily basis ensures transparency and a uniform understanding across departments. In conclusion, because everyone likes to hear a number, they say that depending on the service package, reductions of up to 10% downtime or 3% scrap are certainly possible.

Do you still have experiences from the project that are important to you that you would also like to share? Best practices or also pitfalls for other companies out there?

Sandra

In this project, joint success and continuous exchange were also decisive; that is very important. It was small teams on both sides that made this possible, but continuously the same contacts.

A fast implementation, especially with regard to the final spurt to bauma. It was great to see how we all worked together. A solid, constant team on both sides, that is very important from my point of view for close cooperation.

For you, it is incredibly important to know what your customers need today or even in the future? That is what you are dealing with. Do you have things you see in the future? What’s to come in the future?

Sandra

This project has shown us that we have embarked on a very exciting journey with the topic of digitization in the field of special machine construction, which from today’s perspective offers endless possibilities. Our area development, it is on fire and eager. We collect the ideas permanently and say what else we can include. The journey has just begun.

There is a road map; very nice!

 

Martin, how is it with you? What can we look forward to from the Kontron AIS side?

Martin

There are many features and there will be many new features. We are constantly in communication with our customers about what they have in mind. Just last week, we were at a client site where the podcast was running. That was the company “Rampf” and we had exchanged excessively. They really have a plan where we went on site and went through the process flow in the company, talked to the different departments.

That flows back into the software solution. You can be very excited about what’s coming; the topic of data acquisition and data analysis will also play a role. The IoT boxes that want to be managed. We have great device management, the webinar is running parallel to it. So who likes, can follow there also with pleasure.

We are not at the end, we are just at the beginning and with full throttle we go on. These will be very exciting years in mechanical and plant engineering, and I am delighted to be part of them.

That was a nice closing statement, at this point a big thank you to you! Sandra, thank you so much for offering to share a little bit from the field today about what the business model is behind it.

 

Exciting case, exciting project and from my side it only remains to say thank you. Maybe we’ll hear from you again in the round and you’ll give an update on how it all turned out.

Martin

It was very nice! It was a lot of fun and thanks for the lively exchange.

Sandra

I can only concur and would like to say that HESS and the entire TopWerk Gruppe have opened a forward-looking chapter with our Smart Cloud together with Kontron AIS. I look forward to the journey ahead. Until next time!

See you!