Tetra Pak is best known for its distinctive plastic-coated juice and milk cartons, but what consumers don't realize is that it also supplies the end-to-end manufacturing equipment that produces the food and drink to fill these and other containers. That includes around 65% of cheese produced in the US and more than 80% of the ice cream, as part of its global mission "to make food safe and available everywhere." No wonder that over a quarter of its 22,000 staff worldwide are in various field service roles, keeping that equipment running.
The company is currently putting in new software from IFS to run its field service operations. The immediate goal is to optimize travel time and expenses so that engineers spend more of their time actually servicing equipment, while preparing the ground for more outcome-oriented customer relationships in the future.
Automatic allocation and scheduling of engineer call-outs was an important requirement, where the vendor's Project Scheduling Optimization (PSO) engine performed well in trials. But getting the engineer on site is just part of the challenge. Equally if not more important was the ability to integrate to other enterprise systems such as SAP ECC and HCM to bring in data automatically, rather than staff having to cut-and-paste data as currently happens. Jorge Mejia, Director of Next-Generation Service Management at Tetra Pak, explains why this matters:
You're gaining nothing by sending a guy who repairs nothing. Why we did the integration with our SAP ERP system was because we're calling all the supply chain data and the ETA of the spare part on site. One of the conditions PSO passes to plan an [engineer] is that the [engineer] is planned after the parts were delivered or are scheduled to be delivered at the customer site. So we're combining material resource planning with human resource planning.
The system also takes into account provision of the appropriate tools. Mejia adds:
We have a diversity of tools we need to use some times as well to do particular maintenance services. That's also a part of our materials plan. Our tools are in our warehouses around the world. We have all of them identified and individualized per type of equipment. When you have a service request, you have the spare parts we need, the skills we need for the execution, and then the tools needed for execution. All those three resources when we plan it, we need to make sure we have [them] at our customer site.
Preparing to roll out FSM
As part of a nine-month development plan this year for rolling out PSO and Field Service Management (FSM), Tetra Pak chose to run a proof of concept in its Central America and Caribbean region. While this is a relatively small market, its five offices serving twenty-six countries provide plenty of complexity, which was able to put the PSO engine through its paces. The team took a Minimal Viable Product (MVP) approach for the pilot in order to gain maximum user feedback as quickly as possible. Having gathered the data for eight weeks and fine-tuned the requirements, the next stage of development is now in progress, with implementation of the production system due to take place in December this year, followed by the next roll-out in January to the much larger Brazil market. The complete global roll-out is expected to take up to five years.
One important finding from the proof of concept is that more attention needs to be paid to change management. Mejia says:
The change management journey will take time. We're focusing on three main areas. One, making sure that the learning experience of the new solution is very reliable, is simple and makes sense for the end user. We're also managing the continuous improvement experience for the user. If they find something they didn't like, they can tell us and then we will see if we can use that feedback that they gave to us. But also, what kind of value are they seeing to the customers that they serve with the new solution?
We're not done yet with that ... It's not like you can switch on and off people on target, it takes time, and you need to listen to them, and you need to keep communicating with them.
Longer term, the new software will contribute to Tetra Pak's servitization journey. Speaking at the recent IFS Unleashed conference, Sasha Ilyukin, SVP Customer Service Operations at Tetra Pak, sets out the historical context:
From the services point of view, we went from very traditional ways of delivering service — preventive maintenance, parts and labour, back in the 90s, then delivering that based on a contract basis — to going to outcome services, where we deliver outcomes such as line performance, waste reduction, cost reduction, and even reduction of greenhouse gas emissions, to our customers. We deliver that as a service.
Now we're going towards full servitization. Full servitization is where we sell all of our services, everything that Tetra Pak has to offer — equipment, materials, services — that are priced on the basis of a liter of package produced or packages output. Technology plays a vital role in delivering that simplicity that we need to handle the complexity of that system.
Getting all the relevant data into a single platform is crucial to delivering full servitization. For Tetra Pak, that platform is Microsoft Azure. Mejia comments:
All the data coming from customers, all the data coming from our working factories, everything is in Microsoft Azure. We know that we can also have data from IFS Cloud in Microsoft Azure. We're building the algorithms of that application to make sure that we can in Microsoft Azure, combine application data, SAP data, customers data, to drive those outcome-based or more advanced agreements we want to have with our customers.
For the moment, most customer relationships are more traditional, with Tetra Pak collecting data so that it can advise customers on how to improve operational performance. The next step, says Mejia, is to use that data to decide where best to locate field service resources to support customers. And as the IFS roll-out continues, there will be more opportunities to offer maintenance management, asset management, and other service offerings.