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CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION WORK IN THE ENGINEERING INDUSTRY Jobs-to-be-Done Theory in Practice This document details a customer-centric, data driven strategy for Voith to grow in the paper machinery & production market. March 28, 2019

CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

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Page 1: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

CHALLENGE INDUSTRY 4.0:

HOW TO MAKE DIGITALIZATION WORK IN

THE ENGINEERING INDUSTRY

Jobs-to-be-Done Theory in Practice

This document details a customer-centric, data driven strategy for

Voith to grow in the paper machinery & production market.

March 28, 2019

Page 2: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Gerald SteinerVice President Digitalization

Voith Paper GmbH & Co. KG

[email protected]

Page 3: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Agenda

A. The Voith Innovation Challenge

B. Outcome-Driven Innovation®

experience a deep dive :)

C. Learnings

Page 4: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

"Industry 4.0 provides an opportunity to develop

new business models and improve the range of

products and services that we can offer our

customers."

Automation/IT-MixDomain Knowledge-Mix

Initial Situation for Voith

Voith Digital

Ventures

Voith Hydro

Voith Paper

Voith Turbo

Page 5: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Project objectives

• Capture jobs and desired outcomes

of relevant executors

• Identify growth opportunities

(underserved and overserved desired

outcomes)

• Develop solution concepts &

prioritize project pipeline

Objectives of Voith's

Innovation Research

Projects

Page 6: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data model

to formulate a

winning growth

strategy

04.Discover hidden

segments of

opportunity

03.Quantify the degree

to which each need

is under/overserved

02.Uncover the

customer’s

"needs"—tied to the

job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

Page 7: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data model

to formulate a

winning growth

strategy

04.Discover hidden

segments of

opportunity

03.Quantify the degree

to which each need

is under/overserved

02.Uncover the

customer’s

"needs"—tied to the

job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

Page 8: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Market framework – VOITH case

Job executors and their Jobs-to-be-Done

Job Executor Job-to-be-Done

Production

Production Manager Optimize production throughput

Machine Operator Maintain production process

Maintenance

Maintenance Manager Optimize maintenance performance

Maintenance Coordinator Coordinate maintenance activities

Maintenance Executors Execute maintenance activities

Purchasing

Page 9: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Maintenance managers (People who define and optimize the

maintenance strategy, policy,

procedures or processes)

"Optimize maintenance

performance"

Overview of the identified job executors and their

Jobs-to-be-Done at Voith

Market = "Job Executor" + "Job-to-be-Done"

Page 10: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Maintenance coordinators (People who coordinate maintenance

requests in daily business and/or as part

of planned shutdowns)

"Coordinate maintenance

activities"

Overview of the identified job executors and their

Jobs-to-be-Done at Voith

Market = "Job Executor" + "Job-to-be-Done"

Page 11: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Maintenance executors (People who are responsible for carrying

out maintenance work - either

themselves and/or together with their

team of technicians)

"Execute maintenance

activities"

Overview of the identified job executors and their

Jobs-to-be-Done at Voith

Market = "Job Executor" + "Job-to-be-Done"

Page 12: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data model

to formulate a

winning growth

strategy

04.Discover hidden

segments of

opportunity

03.Quantify the degree

to which each need

is under/overserved

02.Uncover the

customer’s

"needs"—tied to

the job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

Page 13: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Job Map

Job executor = Maintenance executors

The job-to-be-done is = Execute maintenance activities

Confirm

MonitorExecute

Define Locate Prepare

Modify Conclude

Evaluate open

maintenance workLocate resources to

execute maintenance work

Prepare execution of the

maintenance work order

Confirm readiness for

execution

Execute maintenance

work

Monitor execution of the

maintenance work

Reorganize execution of

the maintenance work

Clear the work site

Document maintenance

activities

Page 14: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcomes – Maintenance Case

• Minimize the time it takes to

determine a maintenance

strategy for each critical

technical position in the mill,

e.g. run to failure, condition-

based, time-based, etc.

• Minimize the time it takes to

determine the optimum storage

quantity for critical spare parts,

e.g. avoid "shelf warmers",

avoid out of stock situations,

etc.

• Minimize the time it takes to

document a finished

maintenance work order,

e.g. actual hours needed,

spare parts/materials

needed, etc.

• Minimize the likelihood that an

unexpected additional work

step needs to be executed,

e.g. disassembly to access the

maintainable item, a

workaround is required, etc.

• Minimize the likelihood that the

root cause of an open

maintenance request is

unclear, e.g. mechanical or

electrical, not reproducible,

incomplete description, etc.

• Minimize the time it takes to

determine what immediate

action to take when a defect

equipment has been

identified, e.g. warn the

operator, contact a service

center, shut down the

machine, etc.

OPTMIZE MAINTENANCE

PERFORMANCE

EXECUTE

MAINTENANCE ACTIVITIES

COORDINATE

MAINTENANCE ACTIVITIES

MAINTENANCE MANAGER MAINTENANCE EXECUTORMAINTENANCE COORDINATOR

Functional outcomes Functional outcomesFunctional outcomes

Page 15: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data model

to formulate a

winning growth

strategy

04.Discover hidden

segments of

opportunity

03.Quantify the

degree to which

each need is

under/overserved

02.Uncover the

customer’s

"needs"—tied to the

job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

Page 16: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Opportunity Landscape VOITH

Total market for job executor group C: "Execute maintenance activities"

Key take-aways:

▪ The majority of needs are either appropriately served or

underserved (little room for low-price & low-performance-driven

solutions)

▪ The market picture points to a situation where a technology leader

with a high level of expertise is well positioned for sustainable

growth

▪ The strategic goal should be to get the core job done better, i.e.

offer solutions that have the potential to drive satisfaction of job

executors

▪ Top-scoring emotional needs (with the highest discrepancy

between importance and satisfaction): Avoid feeling stressed, e.g. by

unexpected issues, by pressure from other departments, because

the equipment is being run over speed etc.

Page 17: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data model

to formulate a

winning growth

strategy

04.Discover hidden

segments of

opportunity

03.Quantify the degree

to which each need

is under/overserved

02.Uncover the

customer’s

"needs"—tied to the

job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

Page 18: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Uncover opportunities and market segments:

Needs segments of maintenance managers

Two segments based on needs were identified that differ significantly in their needs structure

Total Market Opportunity Themes

▪ Manage damage prevention

▪ Seamless maintenance processes

▪ Proven investment projects

Profile Highlights (tendencies!)

▪ Longer prof. experience

▪ Tend to be in the DACH region

▪ Part of corporate structures (more than 5

mills)

▪ More older sites

▪ Tend to have higher planned downtime

▪ Medium maintenance team size

▪ Maintenance dept. is also responsible for

CAPEX

▪ Responsible for maintenance expense

Total Market Opportunity Themes

▪ Manage damage prevention

▪ Seamless maintenance processes

▪ Proven CAPEX projects

Profile Highlights (tendencies!)

▪ Less experienced executors

▪ Tend to be in China

▪ Single mills but with more than 1 PM

▪ More younger sites

▪ Medium planned downtime

▪ Large maintenance team size

▪ Maintenance dept. to a lesser degree

responsible for CAPEX

▪ Maintenance dept. to a lesser degree

responsible for maintenance expense

Segment 1

"Holistic maintenance

professionalizers"

Underserved needs:

82% (87 of 106)

Average OPP score 11,5

Segment-specific Needs

Similar needs structure compared to the total

market, but at a higher level

▪ Reproducibility of maintenance activities is a

main driver

▪ At the same time, they want to encourage

entrepreneurial behavior

▪ They strive for consistent documentation

▪ Take a highly managed approach and

consequently seek to link performance to cost

▪ Highest emotional need = Feel part of a team

Segment-specific Needs

Similar needs structure compared to the

total market, but at a lower level

▪ Main priority seems to avoid failures and

strive for runnability

▪ Prevention of damage is a main driver

▪ Running into issues by failing to take

preventive measures seems one of their

biggest concerns

▪ They also want to avoid misuse of the

operational maintenance budget

▪ Highest emotional need = Feel part of a

team

Segment 2

"Issue preventers"

Underserved needs:

23% (24 of 106)

Average OPP score 8,7

Page 19: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Outcome-Driven Innovation® (ODI)

ODI is a customer-centric, data-driven strategy and innovation process that ties

customer-defined metrics to the customer’s "job-to-be-done".

05.Use the data

model to formulate

a winning growth

strategy

04.Discover hidden

segments of

opportunity

02.Uncover the

customer’s

"needs"—tied to the

job-to-be-done

01.Define the market:

job executor and

"job-to-be-done"

03.Quantify the degree

to which each need

is under/overserved

Page 20: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Asset ManagementMarket and Competition

20

99%Others

1 %Voith

Accessible market

• 80% market served by 20 players

• 50% by 5 companies

▪ IBM/Maximo 14% (core-business)

▪ SAP 12% (non-core)

▪ DataStream 8% (non-core)

▪ Intenita 8% (non-core)

▪ Peoplesoft Enterprise One (JDE) 7% (non-core)

Conclusion

Market Description Competition Overview

80 MEUR

per year

To compete with established players in an almost saturated market a clear differentiation strategy is

required.

Related to software

• Conventional Market mainly

covered by big software

players

• 70% of our customers

work with asset

management solutions

Page 21: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Main features:

• User friendly with graphical navigation

• Predefined and uniform plant breakdown

structure including all Asset Master Data

• Full transparency with automated KPI tracking

for optimized Performance Management

• Pre-programmed best practice processes for

request and work order management

• Mobility all information on smart phone or tablet

(work orders, instructions, drawings,..)

• Condition Monitoring & Process Control

communication integrated enabling advanced

analytics – Asset Health Monitoring

• Augmented reality

• Easy internal benchmarking with multi plant

integration

• Compatibility to any ERP system

• Prepopulated preventive maintenance plans

OnCare.Asset

Transparency & Performance

Function: Enables as frontend or standalone a transparent Asset Management

including the full practical functionality of a computerized maintenance management

system (CMMS)

Introduction to Voith Digital Maintenance | Zeiss & Voith | HDH | 2018-11-30 | confidential

Page 22: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

“Minimize the time it takes to create a maintenance work plan for a shut down”

Process to create one work order in the conventional SAP/PM

step 1 to step 9, duration approximately 150 seconds........

....planning the work order will require another 11 steps and

an additional 12 minutes for each work order........

2

Process to create one work order in the OnCare.Asset “front-end”

for SAP/PM in 2 steps, duration approximately 15 seconds........

....planning the work order will require one more step and an

additional 5 minutes for each work order........

Introduction to Voith Digital Maintenance | Zeiss & Voith | HDH | 2018-11-30 | confidential

Page 23: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

LEARNINGS

Page 24: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

ODI® guides Design Thinking

Understand

Find out customer’s needs and pain points.

Develop

Create a product with core features that allows to deploy the market for testing product hypothesis.

Analyze

Quantifiy outcomesof the market research to clarify development focus.

Proof

Seek to maximize the information learned about the customer.

Needs MVP Pilot

? !

Outcomes

Page 25: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

OnCumulus.Suite

Unique user experience and user interface design

Made by engineers

for engineers

Made by interaction designers

based on user needs

Page 26: CHALLENGE INDUSTRY 4.0: HOW TO MAKE DIGITALIZATION … · Outcome-Driven Innovation® (ODI) ODI is a customer-centric, data-driven strategy and innovation process that ties customer-defined

Learnings

Source: Innovation Roundtable | Jobs-To-Be-Done | 2016-11-08 | Gerald Steiner, Martin Pattera

AppreciationCustomers are

happy to be taken serious in getting their jobs done.

ConsistencyCustomer needs

almost identical all over the world.

ODIThe methodology

eases the understanding of

true needs behind the demand for

solutions.

QuantificationShould be done with the same

team.

ConsolidationAgglomerating statements into

working packages can be challenging.

CloudWillingness to share data is

constantly increasing.