IoT and AI in service Building and optimizing after-sales networks

Related Vendors

Genpact

FAULHABER Drive Systems

Taiwan Machine Tool & Accessory Builders' Association (TMBA)

Wuxi InfiMotion Technology Co., Ltd.

Networks in the after-sales sector form the backbone of modern supply chains. By integrating IoT and AI, they provide real-time insights, optimize service processes, and increase efficiency. How companies can leverage these networks to gain competitive advantages.

Bernd Hoffmann is Vice President at Genpact.

In today's globalized economy, the after-sales sector has evolved from a mere service function to a central competitive factor. According to the IDC "Products and Service Innovation" study of 2023, about 50 percent of all products and devices are connected, and this connectivity is expected to rise to over two-thirds in the next three years. It is no longer just about servicing products after their sale, but acting proactively, performing proactive maintenance, and ensuring seamless availability of spare parts. Efficient networks are crucial in this regard.

Networks in the after-sales sector go beyond simple connections between suppliers, service providers, and customers. They form the backbone of the supply chain by providing the infrastructure necessary for efficient process coordination. By seamlessly integrating suppliers, warehouses, and logistics providers into a connected system, supply chain transparency is significantly improved. The integration of modern technologies such as the Internet of Things and artificial intelligence provides real-time insights into inventories, machine conditions, and logistics processes, enabling more precise planning and optimization. This way, spare parts can be made available exactly when needed, avoiding unnecessary costs due to overstocking or delivery bottlenecks.

Furthermore, networks are the driving force for the continuous improvement of service quality. They enable proactive maintenance, where real-time data analysis keeps machine runtimes always known and identifies and resolves potential issues before they lead to costly failures. The rapid and targeted response to service requests is significantly enhanced by connecting all involved parties, increasing customer satisfaction while simultaneously reducing operating costs.

Last but not least, networks in the after-sales sector are catalysts for innovation. They provide the necessary infrastructure to quickly implement new technologies by enabling seamless data exchange and the integration of new systems. As a result, they support companies in adapting their business models and offer the flexibility to quickly respond to market changes. In a time of rapid technological advancement, the ability to leverage innovations and integrate them into existing processes is crucial for long-term success and differentiation in global competition.

Identification and selection of partners

Building a network in the after-sales sector begins with selecting the right partners. These partners should not only possess specific industry knowledge but also share similar goals and values to ensure successful collaboration. A strong network is based on trust and a shared vision that promotes innovation and efficiency.

Particularly important is the selection of partners who possess the necessary technological expertise to leverage new technologies such as IoT and AI. These partners should be able to seamlessly integrate their systems, platforms, and processes into the network, thereby laying the foundation for efficient collaboration. Furthermore, they should be willing to share their data and resources to achieve common goals and continuously improve service quality.

Data integration and interoperability

One of the central challenges in building networks is data integration. In many companies, systems and processes are fragmented, leading to inefficient operations and communication problems. Therefore, seamless data integration and interoperability must be ensured. API-based systems and central data platforms are crucial to enabling seamless communication and collaboration.

All partners in the network should be able to access up-to-date and relevant information at all times, which significantly improves decision-making and process optimization. By integrating data from various sources, companies can gain a comprehensive view of their service processes and customer needs, enabling informed decisions that contribute to improving service quality.

Use of IoT and AI

The sensible and targeted use of IoT and artificial intelligence is a key factor for further optimizing after-sales networks. An example of this is the use of IoT sensors embedded in machines to monitor their condition in real time. These sensors continuously collect data on operating conditions such as temperature, vibration, and pressure, which are then analyzed by AI algorithms. By detecting deviations from normal operating conditions, these algorithms can identify potential issues early and suggest predictive maintenance measures. This minimizes unplanned downtime and increases the machines' lifespan.

Another example is the use of AI-powered analytics tools that can process large amounts of data and detect patterns indicating future maintenance needs. These tools enable companies to optimally plan maintenance work, thus maximizing the availability and reliability of machines.

In addition to the manufacturing industry, which regularly uses these tools to monitor machine data of industrial plants in real time and test for anomalies, AI-based analysis tools are also used for the maintenance of infrastructure such as wind turbines. Using IoT sensors, wind speed, rotor movement, and ambient temperature are measured and then analyzed for patterns to provide maintenance forecasting.

Cloud computing and mobile technologies

By using cloud computing, companies can scale their IT resources flexibly and cost-effectively to respond to changes in demand. This is particularly important to ensure that the IT infrastructure always meets current requirements and no bottlenecks occur. Additionally, cloud computing offers the advantage of centrally storing and managing all data, which increases data integrity and security.

Mobile technologies, on the other hand, enable service technicians to access the information they need from anywhere, thereby increasing the efficiency of service processes. For example, service technicians can access maintenance data directly via mobile applications and immediately order the necessary spare parts. This increases the efficiency of service processes and significantly reduces customer waiting times, which in turn leads to higher customer satisfaction.

Risks and challenges in after-sales networks

While networks in the after-sales sector offer numerous benefits, it is important to also consider the potential risks and challenges associated with their implementation and operation.

• Data Security and Privacy: The networking of systems and the integration of IoT and AI increase the attack surface for cyberattacks and data leaks. Since sensitive customer data and business-critical information are often exchanged in the after-sales sector, protecting this information is of the highest priority. Companies must invest in robust security architectures, including technical measures such as firewalls and encryption, as well as regular employee training in handling sensitive data to prevent security breaches.

• Complexity and Interoperability: Integrating different systems, especially older legacy systems, can be complex and challenging. A lack of interoperability can lead to inefficient processes and data inconsistencies. To avoid this, companies must invest in interoperable technologies or adapt existing systems to ensure seamless collaboration and consistent data flows.

• Costs and resource expenditure: Establishing and maintaining an efficient network requires significant investments in technology, personnel, and training. The high initial costs for IoT sensors, AI systems, and cloud infrastructures, as well as ongoing maintenance costs, must be justified by efficiency improvements and cost savings.

What's next?

After-sales networks are indispensable in many industries today. Automotive manufacturers and technology companies like Apple and Amazon use them to ensure customer satisfaction, strengthen brand loyalty, and optimize their service processes. In industries such as agricultural technology, after-sales networks are a must to compete in terms of the best machine availability, reliability, and efficiency.

The after-sales market is facing significant changes, especially due to the increasing demand for sustainable products. With the trend away from a throwaway society towards more maintenance and repair, companies will need to invest more heavily in the after-sales sector. At the same time, the availability of qualified technicians will become a central challenge.

In parallel, optimizing the last mile of logistics offers enormous potential. Increasing connectivity creates new opportunities to enhance efficiency and improve service quality. These technological advancements, coupled with the trend towards sustainability, will sustainably shape the after-sales market in the coming years.