Markem-Imaje Turns Field Service into a Competitive Advantage

Introduction

Have you ever noticed the printed unique identifier or “use by” date on a food or other product package?  Often this printing identifies the specific time and place the item was manufactured.  It’s likely that Markem-Image made the machine used to apply that identification and traceability printing. 

Servicing Printing Machines

Markem-Imaje has over 3,000 employees globally, and its products include inkjet, thermal transfer, laser, and print-and-apply label systems.  The company’s footprint encompasses 30 subsidiaries with technology centers, manufacturing plants, and equipment repair centers. 

Any failures of the equipment the company sells has two key impacts:

• The customer’s manufacturing production stops, creating customer satisfaction issues for Markem-Imaje that impact repeat equipment sales

• The use of consumables stops with a negative impact on a significant source of Markem-Imaje’s revenue

Providing timely, high-quality maintenance services for these complex and critical machines installed in the customer’s plant has clear value-add for plant operators.  The benefits include reduced unplanned downtime, improved product quality, and better operational performance. 

Field Service Previously a Cost Center

Markem-Imaje’s 850 field service technicians represent a significant portion – 28 percent - of its overall workforce.  These technicians have a variety of roles including pre-sales support, post-sales installation, training, and workshops.  The maintenance support includes preventive, corrective (operating issues) and emergency (unplanned downtime). 

In the past, the organizational structure and associated accounting practices led to field service being operated as a cost center to be “optimized,” i.e., constrained or reduced.  The function was under-resourced, resulting in reduced customer satisfaction. 

The focus on managing costs led to reactive business processes, customer satisfaction issues, and lost opportunities to sell additional equipment to existing customers.  Ultimately, the cost control approach negatively impacted Markem-Imaje’s revenues. 

Turning Field Service into a Profit Center

In 2015, Markem-Imaje converted field service from a cost center to a profit-and-loss (P&L) center.  Markem-Imaje needed to manage this rapidly growing new business.  This required a way to manage field service activities centrally and adopt standardized business processes to meet improvement objectives and control costs to help assure the profitability of the new P&L center.  After reviewing the available solutions, the company deployed the Coresystems field service management (FSM) solution to standardize the business processes for the new services and manage the associated resources.  Some existing processes were adjusted to fit the best practices in the tool and avoid software customizations.

Markem-Imaje gradually introduced the FSM software and new business model across 100 countries and cultures.  While, initially, each area wanted to do field service in its own way, the company rolled out a standardized process.  Then, as the real gaps emerged by region, these were examined and accommodations made.

As an added benefit, the FSM software enables technicians to identify and help win sales opportunities for additional equipment, spare parts and consumables in real time.  Technicians advised the customers on how to run their equipment better and captured opportunities for cross-selling.  Incentives for this activity (managed in Coresystems) became part of the technicians’ compensation package.

Critical Factors Enabling Success

Important factors that led to the success of the field service program at Markem-Imaje include:

• Pilot: For a limited geography, a pilot system obtained the anticipated increased revenue, which proved the business case for field service as a P&L center.  This proof point helped gain the full support of executive management and the affected stakeholders.
• Change management: Deploying a change management process was key to involve stakeholders and gain user acceptance.
• Effective communications: The company communicated with the business managers and users for the new field service business processes using Coresystems, and trained personnel for the related sales skills for cross-selling.
• Incentives: The new software managed the reward system for technicians to generate leads and cross sell additional equipment, spare parts and, consumables.

Benefits

After deploying Coresystems, Markem-Imaje obtained visibility into field service planning and execution, which improved its effectiveness.  According to Markem-Imaje, the benefits included:

• Improved customer experience and satisfaction which increased repeat sales of equipment into the customer base
• Identifying and tracking cross selling led to a 60 percent increase in opportunities closed for added equipment, spare parts and consumables
• Services margins increased by 6 percent

Lessons Learned

The implementation of the Coresystems solution was successful and provided significant business value for Markem-Imaje.  Even so, several issues were revealed that provided new insights.  The lessons learned include:

• Communicate for improved user adoption: Provide a requirements specification for the users that explains the change and obtains their buy-in.  This should be written in a relatively short and concise manner.   This differs from the technical documentation used for software programming.
• Change management: Countries in which the changes were well communicated to both management and users had smooth implementations.  Those areas where a high readiness was assumed, and applied less change management (like informing only managers) had issues.
• Systems integration:  The ERP system is used for invoicing and stock inventory management.  Integration was more difficult and took longer than expected.  While the transfer of information may appear to be straightforward, handling exceptions (like wrong part numbers or quality problems) needed to be incorporated. 
• Information and communications technology (ICT):  Security is a justified concern, and strict compliance to the parent company’s ICT required more resources and time than expected.

Coresystems’ FSM Solutions

Coresystems has been providing innovative solutions and software for field service management since 2006, and is headquartered in Switzerland.  On June 5, 2018, Coresystems was acquired by SAP. In the near future, Coresystems FSM will be integrated into the SAP C/4 HANA suite.

Coresystems offers mobile FSM solutions that automate operational tasks such as workforce optimization, scheduling, and dispatching, field parts and inventory management, and team collaboration.  The company designed its mobile and cloud-based field service software application to be easy to operate and flexible.  Industries served include industrial and construction equipment, power utilities, telecom, medical equipment, and HVAC.

In addition, Coresystems’ “Crowd Service” allows field service organizations to engage with technicians on a gig basis.  The service planner can contract from a pool of technicians to cover remote geographies and a surge in activity beyond the capacity of employees.

Conclusion

Field service involves widely distributed assets and service providers use FSM solutions to deliver maintenance services to asset owner-operators.  FSM systems plan, optimize, execute, and track the needed service activities with the associated priorities, skills, materials, tools, and information.  The associated business processes involve several functions within a company and many stakeholders.  From the “lessons learned” at Markem-Imaje, a key to successful implementation and adoption involves change management and communicating with those affected.

Markem-Imaje’s use case illustrates that, when improved with modern software like Coresystems, field services can become a competitive advantage.  By improving its field service planning and execution, Markem-Imaje increased revenues significantly for both products and services and improved the margin for the services.  These business benefits improve the executive metrics in the P&L statement and shareholder value.

On-demand Presentation of the Markem-Imaje Case Story

Readers can view a video of the ARC Industry Forum presentation by Jack Rijnenberg, Director of Global Customer Service, Markem-Imaje, here:

https://www.youtube.com/watch?v=59Gnbpnje-I&feature=youtu.be

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Keywords: Markem-Imaje, IIoT, Field Service, Coresystems, ARC Advisory Group.