At this stage in its development, the Internet of Things (IoT) tends to be associated with the world’s largest organisations and municipalities: big utilities firms, global logistics companies and smart cities like Barcelona, New York and Tokyo. Think: big budgets and extensive R&D capabilities.
But at McKinley Equipment Corporation, an Irvine, California-based supplier of warehouse-handling equipment such as loading docks, conveyor lifts and commercial doors, CFO Kevin Rusin isn’t letting size or lack of resources stand in his way.
McKinley Equipment has just 115 employees, but Rusin is already experimenting with IoT technologies and he intends to roll these out on a wider scale during 2016.
At the heart of his experiments is the company’s implementation of a cloud-based field service management system from ServiceMax. In the four years that McKinley Equipment has been using ServiceMax, it’s been able to equip its 80 field technicians, who maintain and repair equipment on behalf of customers, often big-name retailers, with iPads that feed them information about the visits they need to make, the products installed at a particular customer and a complete service history for each piece of equipment. Says Rusin
When a customer has a problem, my guys can look at their iPad and, in most cases, have a pretty good idea of what the problem might be and what parts or repairs might be needed to fix it, before they even get to the customer.
As a result, he says, McKinley’s proud of its ‘first-call fix rate’, a standard measure of effectiveness in field services. This, he says, is 10% higher than industry standards and up to 20% better than the company’s nearest competitors. How does he know that? He explains:
Many of our bigger partners send out KPIs for all their suppliers on a monthly basis and these reports benchmark suppliers against each other, to introduce some competition between us. And what I know from that is that we’re winning in terms of being a good, trusted, reliable partner to our customers.
But that’s not enough for Rusin, hence his explorations of the world of IoT. What he’s observed is that much of the equipment that McKinley Equipment sells, distributes and maintains now comes in the form of ‘smart products’ - that is to say, they come equipped with computing and networking functions that enable them to report on their status and usage. Others, he says, can be ‘made’ smart, by adding low-cost sensors to them.
Whether it’s born smart or made smart, that means that a vertical lift, for example, can let McKinley Equipment know when it’s not working properly or has experienced a malfunction - sometimes before the customer is even aware there’s a problem with it. The data it sends feeds directly into ServiceMax, automatically raising a ticket and alerting a technician.
McKinley’s already been through a thorough proof of concept, says Rusin, and is now live beta-testing this IoT approach with three of its customers:
We’re collecting data, we’re fine-tuning our approach and we’re making it better - but basically, we’re live and we’re ready to scale. A 115-person company is live on IoT.
Next year, he says, he wants to be extending the technology to customers across McKinley’s operations in California, Nevada and Arizona - with big potential benefits for them:
Already, thanks to ServiceMax, we know the history, type and age of a product before we get to the customer - but we don’t always know what’s wrong. Now, I’m being told by the product itself what’s wrong, and I’m calling the customer to say: ‘Your dock leveler has a problem, I know what the problem is and I’m already sending out a technician in a truck with the right spare part to solve that problem. That’s powerful stuff.
But it goes further than that: by July or August next year, I’ll have collected enough data and done enough analysis on it to be able to call a customer and say: ‘Based on the age of this product and the usage it gets, I can reliably predict it’ll probably break down by this date. That’s during your busiest season. Do you want to risk that - or would you like me to send someone out during the next few days, when it’s convenient to you, and they can service the equipment?’ And, by the way, I’ll be able to identify and send out our most experienced technician, who’s seen that problem and fixed it a hundred times before.
Over time, that information could also help McKinley Equipment advise its customers on equipment acquisition and replacement strategies, helping them to get even better value for money from the investments they make in warehouse handling. It’s all part of the company’s mission statement to be the most trusted sales and service distributor in its marketplace, rather than ‘just’ a supplier:
With the data we’ll be able to provide, retailers will be able to benchmark individual stores against each other, put in place quality standards, run their warehouse operations more efficiently. When we have intelligent, actionable, real-time data, we make our customers better. That, to me, is winning.
Disclosure - at time of writing, ServiceMax is a premier partner of diginomica.