A strategy for midlife upgrades to provide value for both the - - PowerPoint PPT Presentation

▶
a strategy for midlife upgrades to provide value for both
SMART_READER_LITE
LIVE PREVIEW

A strategy for midlife upgrades to provide value for both the - - PowerPoint PPT Presentation

Sep 04, 2022 166 likes •369 views

A strategy for midlife upgrades to provide value for both the equipment operator and the supplier Aston Spring Servitization Conference, May 2017 Dr Shaun West and Dr.-Ing. Thorsten Wuest Introduction The problem and the purpose of this paper

slide-1
SLIDE 1

A strategy for midlife upgrades to provide value for both the equipment operator and the supplier

Aston Spring Servitization Conference, May 2017

Dr Shaun West and Dr.-Ing. Thorsten Wuest

slide-2
SLIDE 2

West & Wuest, 2017

Introduction The problem and the purpose of this paper

To identify where value can accrue in a product service system during midlife upgrades

This paper investigates upgrade strategies during the midlife of capital equipment. The upgrades are directly related to equipment

  • bsolescence, changes in

market needs and new technologies.

To develop the concept of midlife in a product service system context

Purpose of this paper

With newer models of asset management possible due the IOT how can this be used to support midlife upgrades?

Problem

slide-3
SLIDE 3

West & Wuest, 2017

Introduction Product service systems

Servitization and Product Service Systems are strongly tied to product lifecycle management

  • Information exchange/access across and within

lifecycle phases is crucial

  • Midlife value propositions should focus on creating

real owner/operator value

  • The operational phase may be significantly longer

than the design life

Sales ROS

slide-4
SLIDE 4

West & Wuest, 2017

Introduction The terminology of stakeholders related to a product service system may be confusing

The terms ’user’, ’supplier’ and ’manufacturers’ are insufficiently explicit to employ here

  • The ‘owner/operator’ is the stakeholder using the

PSS for the (intended) purpose

  • The manufacturer/service provider is the stakeholder

responsible for the design, manufacturing and upgrade

slide-5
SLIDE 5

West & Wuest, 2017

Introduction Product lifecycles come with their own perspectives

Product lifecycles often focus on product production rather than the longer operational life

Levitt (1965) https://hbr.org/1965/11/exploit-the-product-life-cycle Wellsandt et al. (2015). Sources and characteristics of information about product use. 25th CIRP Design Conference, Haifa, Israel.

Business/production perspective Engineering perspective

slide-6
SLIDE 6

West & Wuest, 2017

Methodology Two case studies of complex engineered equipment were used to examine the PSS

GE 13E2 gas turbine Boeing B52 strategic bomber

  • Cases built up based on published data
  • Cross case analysis based on five dimensions
  • Findings compared with the literature

Two different engineered products that suit very different markets

Figure 1: (left) GE GT13E2 gas tu

slide-7
SLIDE 7

West & Wuest, 2017

Results GE 13E2 gas turbine has evolved ever since its introduction

The application of new technologies have been applicable to both the new units and the installed base

Year Status Alstom name/GE name 1992 Introduction GT13E2 / NA 1996 Blading change GT13E2V96 / NA 1998 Blading change GT13E2VA / NA 2005 Blading change GT13EMXL / GT13E2 2005 2008 Compressor change GT13EMXL up-flow / GT13E2 2005 2012 New compressor New burners New blading GT13EMXL2 / GT13E2 2012

slide-8
SLIDE 8

West & Wuest, 2017

Results B52 bomber has evolved ever since its introduction

Technology around the aircraft has changed as has its mission

20 40 60 80 100 120 140 160 180 200 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963

Number shipped

slide-9
SLIDE 9

West & Wuest, 2017

Results The cross case analysis based on the five key dimensions

Five key dimensions allowed clear understanding of the operational lives of the equipment

GE GT13E2 B52 Design life 25 years (planned)

  • new units still being sold
  • operational lives of 40+ years

20 years (planned)

  • today over 60 years, expectation of around 90 years total

Mission Designed for base load electricity production

  • market moved to rewarding flexibility
  • some installed to provide local heating

Designed for high level strategic bombing

  • mission changed to low level bombing
  • anti-insurgence/anti-terror
  • cyber warfare

Technologies State-of-the-art when designed, yet had inherit design flaws

  • new blading technologies introduced to reach initial

design life Newer technologies introduced to upgrades

  • provided additional owner value
  • extended inspections intervals

Initial engines underpowered

  • new engines fitted

HVAC system pool designed

  • new HVAC system installed to improve temperate

Limited computing in 1950s

  • installation of (more powerful) computers
slide-10
SLIDE 10

West & Wuest, 2017

Results The cross case analysis based on the five key dimensions

Five key dimensions allowed clear understanding of the operational lives of the equipment

GE GT13E2 B52 Environment Newer more efficient power plants installed, move to renewables

  • demanded a change in operations (flexibility)
  • change in the competitive landscape

New (Russian) weapons systems

  • forced a change to low level bombing

New communication systems in NATO

  • upgrade (6-12 years) of communication systems

New NATO weapons systems

  • new weapons pods installed

Obsolescence Control systems Blading Sub-systems (OEMs changed in the design process) Control systems Landing system Computers Weapons systems People

slide-11
SLIDE 11

West & Wuest, 2017

Results Lessons learnt from the key dimensions

Design life

  • Exceeded their initially planned design life (2x-4.5x)

Mission

  • The missions continually changed with the political

and technological (etc) environment Technologies

  • Initial flawed / based on wrong requirements

(unknown to manufacturer AND customer) Obsolescence

  • Parts become no longer available

(or economically viable) Environment

  • Nothing operates in isolation but as part of a system
  • New technology becomes available
  • New technologies keep the equipment relevant
  • New conversions, modifications and upgrades must

add value for the owner/operator

Technology is only relevant if it creates value of the owner/operator

slide-12
SLIDE 12

West & Wuest, 2017

Discussion The beginning of life is important for the installed base build up

Consideration of the midlife must be included in the design-make phase

  • The beginning of life must be conceded
  • The equipment provides the ’best fit’ for the
  • wner/operator (at that time)
  • The value for the supplier and the owner/operator

may be low during this phase

slide-13
SLIDE 13

West & Wuest, 2017

Discussion The midlife phase provides opportunities for both the supplier and owner/operator

The equipment transforms into a platform to base services, converions, modifications and upgrades on

  • Changes to mission and technology occur
  • Injections of new technologies reinvigorate the

equipment

  • Opportunity to create locking/lockout
slide-14
SLIDE 14

West & Wuest, 2017

Discussion Midlife and product service system thinking

The midlife phase offers potentially most value to both the supplier and the owner/operator

  • The midlife phase is longer than the design life
  • For the asset to remain valuable for the
  • wner/operator, conversions, modification and/or

upgrades must offer measureable value

  • The manufacturer/supplier may gain additional

value through locking out competition

slide-15
SLIDE 15

West & Wuest, 2017

Discussion Midlife and digital technologies

The midlife phase offers potenailly most value to both the supplier and the owner/operator

  • The IOT (digital twin?) helps to build a fuller

picture of the operational use and benchmarking

  • The IOT supports validation of operational

conversions, modifications and upgrades

  • The IOT support new revenue models

Figure 1: (left) GE GT13E2 gas tu

slide-16
SLIDE 16

West & Wuest, 2017

Discussion Other types of assets where this approach may be applicable

More research is needed to confirm applicability of the model (but we think it would apply…)

slide-17
SLIDE 17

West & Wuest, 2017

Conclusions

Servitization transformation through change management is an important theme

Long-term operation is not plannable and changes do and will occur Nothing operates in isolation: mission and technology change During design the future midlife should be should be considered

During the midlife new technologies that provide value to the owner/operator should be offered. This can be used to help extend the OEM’s lock-out/lock-in phase

  • n the equipment.

Product-service systems provide competitive advantages

slide-18
SLIDE 18

West & Wuest, 2017

Recommendations More research into the midlife phase of product service systems is required

Research into how widely applicable is this model Research to better understand the value creation during midlife Improved models for value creation for the different stakeholders

The applicability of the model and the value creation for each of the ecosystem actors should be further researched

Clear stakeholder definitions (eg owner/operator and and supplier)

slide-19
SLIDE 19

West & Wuest, 2017

Thanks for your time! Questions over coffee…