The world as we know it is contingent on paradigm shifts. One example is IT services management in the early stages of digital transformation. In the past two decades, businesses wishing to optimise business operations with digital technology had to establish physical data centres, develop specialised applications, and employ professionals to maintain the entire architecture.
Costing hundreds of thousands of dollars, only large organisations could implement a digital transformation strategy. Then there was a paradigm change. Cloud computing, Software as a Service (SaaS), and open-source technology have permanently transformed the entire digital transformation environment.
Now, organisations spend less money establishing a digital process for managing corporate activities, and providers are responsible for sustaining used solutions. The industry of original equipment manufacturers and users is experiencing a paradigm transition. This change involves Equipment as a Service (EaaS).
What exactly is Equipment as a Service?
Equipment-as-a-Service, or EaaS, is a business model that entails renting equipment to end-users and collecting recurring fees for its use. This service-driven business model, also known as Machine-as-a-Service, offers several advantages to both the EaaS provider (OEMs and Machine Builders) and the customer (manufacturers), as discussed below.
Is there any reason to employ an Equipment as a Service model instead?
During the early years, machine data was used only to establish product quality, schedules, and financial calculations; this data was limited to output information. While this assured producers could compute the profit from production cycles, the acquired data provided no insight into machine health, how to enhance machine design and the operational capacity of machines.
For both OEMs and end-users alike, they were flying blind when figuring out what equipment could do. The advent of “Industrie 4.0 brings about new methods of evaluating machines and entire operations”.
IoT, cloud computing, and edge computing fuel these new methods. In factories, the darkest corners have been illuminated thanks to these interrelated technologies. A new system of acquiring and using shop floor equipment by manufacturers is thus created by opening up new opportunities for OEMs to provide end-users with equipment.
It’s a paradigm shift in the way manufacturers construct equipment with an eye toward intelligent manufacturing and an emphasis on supplying equipment as a service rather than a product.
There are two sorts of Equipment as Service models that might be utilised under this concept which are:
- Model one is a subscription-based model in which OEMs provide equipment to organisations. In this model, the subscriber’s equipment is housed at the subscriber’s location. Subscription fees cover maintenance and repairs. However, the OEM seller is responsible for software updates and spare parts replacements for the duration of their contract. The OEM will retain ownership of the equipment data as a kind of remuneration and be free to utilise it however they see fit, whether for new product development, predictive maintenance, or any other purpose
- In the second model, manufacturers and OEMs might contract out the use of factory equipment to clients for a set number of days or weeks or months. Customers who lack the specialised equipment needed for technical applications due to equipment expenses might meet with service providers and use their equipment within the facilities of the equipment provider. Subscription payments, machine data or a share of the final sales are all examples of payback for the service provider.
Importance of having Equipment as a service in OEMs
Improved equipment design
When equipment is connected to an IoT cloud and IoT platforms, data sets from various production cycles are collected, analysed, and sent to R&D departments. This improves the design of the equipment. Enhanced features, capacity, and operations can be derived via machine feedback.
Creating Predictive Maintenance Programs
One of the expected gains of intelligent manufacturing is predictive maintenance.
Equipment manufacturers now can include predictive maintenance rules into their designs straight out of the box, thanks to EaaS. Data from previous equipment failures and uses is used to build a predictive maintenance approach for newly constructed equipment in this situation.
Minimal operating costs
When it comes to EaaS, you don’t have to worry about maintaining your manufacturing equipment or updating your software or hardware. Small and medium-sized enterprises (SMEs) benefit from this since it reduces their operational costs and cost of equipment and allows them to concentrate on their primary production duties.
Costs that can be predicted
CFOs prefer steady expenditure patterns and avoid peaks and troughs to maintain a stable cash flow. In addition, department managers generally find it easier to secure a monthly sum from management than a significant one-time expenditure.
Concentrate on your main business and your key competencies.
There is a growing desire for companies to focus more on their core competencies. This does not include acquiring and maintaining imported machines, replacement parts, and consumables. It is possible that these points could detract from the main message.
Amount of output that is assured
If a corporation relies on a plant, it should run as smoothly as possible and produce a set amount of product to be financially viable. Manufacturers typically guarantee production volume, so you know exactly how much of a particular product you can expect to receive.
Reduction of risk
All three ideas, as mentioned above, are geared toward a single goal: reducing the potential for harm. Businesses must eliminate as many potential sources of risk as possible in these unpredictable times. For the sake of your clients, you should keep these considerations in mind when you design and build machinery and plants. Using an “equipment-as-a-service” business model, a manufacturing mechanical engineering company can begin with this expertise.
In today’s uncertain times, responding to client needs and providing a solution for these significant difficulties is vitally important. So now is the time to consider and execute new business models to maintain your position in the market for the long term. However, there is a lot to consider while deciding if the equipment as a service model is the way to go for your business; hopefully, the above article has been of great help.