018. Idea: How Onsite Services Impacts Industrial Manufacturing

Chris: 00:30

Welcome to EECO Asks Why. Today we’re going to be talking about an idea around how onsite services impacts industrial manufacturing and to help walk us through this topic we have Mr. Daniel Vaughn, who is a Product Service Representative for Electrical Equipment. How are you doing Daniel?

Daniel: 00:44

Doing great, Chris, how are you?

Chris: 00:46

Doing good, man. I really appreciate you taking the time with us today.

Daniel: 00:49

My pleasure.

Chris: 00:51

Let’s just jump right in for our listeners here. What are some of the typical services that industrial manufacturers utilize when we’re talking about repair and remanufacturing of goods?

Daniel: 01:03

Great question, Chris. There’s a variety of services that are really included with that, but a lot of the things that customers that I deal with really look for in regards to repairing remanufacturing is really helping them organize their spare parts. They’re broken parts. They’re parts that need to be repaired and helping organize them in a way that can be tracked to be able to be sent out for repair and also returned to the proper location inside the facility where the customer can use it and be able to depend upon it as it is a good spare part.

Chris: 01:38

Okay. Now is this specific to electrical components here?

Daniel: 01:42

No. So within our industrial companies that we work with each of our customers have a variety of different parts. Whether it’s mechanical or electrical, there’s quite a wide array of different parts that we help with organization and repairs at our customer sites.

Chris: 01:59

Okay. What do you see is like a typical types of items? Would they be drives or control type stuff? I’m just trying to get painted a little bit broader picture for our listeners of what, when you say repair and remanufacturing, what would be some of those devices?

Daniel: 02:17

There is really a large amount of different products that this really encompasses, but if you want to get some really common items that the majority of the industrial customers will want to be repaired. It would definitely include motors and drives. But with that, there’s a variety of electrical and mechanical components, whether it is IC controls, whether it is a variety of different products, but definitely drives is definitely a very popular item that is repaired and remanufactured often, along with motors.

Chris: 02:50

Okay. Now, are you typically working in store rooms for these types of opportunities to help that industrial end user?

Daniel: 02:58

We definitely are, Chris. Each customer is going to be different and unique and have their own operations and procedures on how they would like store rooms to be run, repairs to be managed.

But with that, the majority of our customers like to keep everything centralized in one location. So it’s easy to track. It’s easy to disperse to the teams that need those parts. And a lot of times they will put those repair remanufacturing items that whether they go down or need to be repaired or stored, and it’ll all be in a store room type solution.

Chris: 03:29

Okay. Very good. So maybe walk us through and help us understand better the typical process flow when you’re working with that industrial user in this space here.

Daniel: 03:39

Absolutely. One of the first things we do is we have an initial conversation with our customers. We try to learn how they run their business and how we can help better support them as a distributor. One of the first things that we always will ask is when a part breaks when it, whether it’s inside the machine or near the machine, what happens to that part that you just pulled out and thrown in the trash, as it pulled out and just thrown on the floor? Is it thrown out stored somewhere else?

We want to know what happens when a machine goes down and when a part fails, what happens to that part? Where is it placed? Because what we are able to do and Electrical Equipment Company and other distributors across the country is we’re able to help them organize this process that once it’s identified.

As it’s broken and no longer working, we can help gather that part. We can help have a central location to be able to store that location so that we can then pick it up, catalog it, and then get a quote out to the customers. They can understand what their options are in the repair. So with that process, we definitely will have that conversation with the customer to learn their processes.

We will then identify the parts that definitely need to be repaired and looked at or remanufactured. And we will come on a regular cadence to the customer to be able to pick up those repairs, catalog them, get them quotes, to see if they would like to have that part repaired. And if they would. We will pick up the part for them.

We will package it, we will ship it. We will ensure it and track it through the entire process and them updates along the way. So on how the repair process is going. if we need any more time or less time than what we quoted them, and then we will hand deliver it in a designated area that the customer would like that repair part, with an actual warranty attached to it.

Chris: 05:26

Okay, maybe help us here as well. So a couple of things that popped in mind when you’re walking through that, I typically think a lot of services from onsite standpoint, being vendor managed inventory, VMI, we hear that acronym a lot in the industry. Does this tie into VMI or is this typically a separate service outside of that?

Daniel: 05:45

This is typically a separate service outside of VMI, but with all of what we call the vendor managed inventory or VMI customers we have, we like to join them as often as possible so that we do not only have a vendor managed inventory solution where we will help manage their store room for them and ordering and stocking, but we will also help them in their repair needs.

So we see these services as a compliment to each other, and that they really can help the customer. Save time, save costs, save on personnel and a lot of different other things that we really can help our customers with.

Chris: 06:20

Absolutely. Now you you’re, you’re harping on a word is very dear to my heart when you say services because services are a lot of times, they’re not tangible, and from the service background that I come from the motor  service world, you have to have a way to make it a tangible item for that end user. For us, we were doing motor liability on motors, or we were repairing motors, whatever it was.

But at the end of the day, we had to give that end users something to understand. Where that funds were going and how to improve their process. So from a failure analysis standpoint, what type of information are you getting back from the partners that you work with on the fail components and how is that relayed to the customer?

And then how are they using that information to improve their process? If you can help me, you close that whole full circle of life, if you will, for a component, how does that play out?

Daniel: 07:21

Absolutely. It’s a great question, Chris. And I’ll hopefully on really like a 10,000 foot view. I hope you go over this as a very general generic overview, but help you understand how we help our customers. We want to  be known, in industry it’s not just a repair house to try to collect as many broken parts and just get them repaired as fast as possible in the cheapest effective way to give back to the customer.

We want to be able to provide reliability solutions and to be able to provide solutions that a customer can depend on and be able to analyze. So one of the things that we do and part of the process is this is why cataloguing and be able to track these parts are so important. One of the things that we do in my service area, is we will track all the parts that we repair for the customer.

We can track that all the way down to the machine when it comes out of. Whether it is a board, whether it’s a motor, whether it’s a drive, whatever it may be, we can track exactly that part, where it came from the facility and why it failed. We have some pretty neat analytics and graphical tools that we use on a quarterly basis to meet with our repair customers, where we can show not just a list or a number of how many total repairs that we had done. We can go down on a granular level and let them know groupings.

For example, we can let them know that there was 13 drives that repaired, or that were needing to be repaired of last quarter. These are 13 dries that all came off the same line in the facility, which would denote that there’s an issue on that line that may needs to be looked at on why that drive is failing so much because the other lines have all their drives up and running.

So we try to do that failure analysis and that component analysis with each of our customers. And we do that on a quarterly basis. So we utilize software to be able to track and catalog all of our different pieces that we repair. And with that, we also offer our customers, some that’s very coveted in the industry, which is what we call an in service warranty.

And we utilize that software to also be able to track that part when it goes into the machine, instead of just giving them a standard warranty where a lot of times that part will just sit on the shelf for years without being used and the warranty will expire.

Chris: 09:40

Right. Well, hats off to you. It sounds like you got the process down and you bring a lot of value that, and this is the piece that so many service providers miss, is helping that end user understand what happened, what we found, what they can do from a preventative standpoint to improve the process.

Down in the future to keep that from happening again. So I think you probably just perked the ears of a lot of reliability engineers out there who haven’t even thought about this component of a process in an industrial environment. Hats off to you, hopefully that does get circled to the reliability type groups, inside industrial plants. Cause I know they could definitely utilize that type of information. So thank you so much for that.

So as we keep talking through services, let’s talk about maybe some headwinds, that industrial end users have with they’re trying to make their best decision on supporting services. What would those headwinds be?

Daniel: 10:36

Definitely. I think budgets are always going to play a role with each of our different customers in the industrial space. With the definite economic times that we’re going through at this time with all of us having to do more with less, especially with some of the economic factors that we’ve had to deal with in 2020, we’re going to see that budgets are going to be more and more constrained.

So there is going to have to be ways for those buyers as purchasers and those customers, to be able to find economical ways to be more reliable inside the facility, but also save money. And one of the actual ways and best ways that you can do that is really having an original OEM repair that’s truly repaired and remanufactured, like new, from a reputable repair house, whoever you may use and to ensure that you have the warranty, to be able to back up that repair, to ensure that it stays in service. But definitely the budgets are going to be top of mind over the next couple of years that we’re going to see and that’s really gonna drive a lot of business.

 And repairs we see as a huge growth opportunity for all repair houses as customers look to save money. Where instead of buying new, they can save money by getting the same part with the same warranty as a repair remanufactured item.

Chris: 11:50

No doubt. Now with that though opens up another box that you have to be concerned with. If you’re industrial user, if you’re out there and you’re in charge of sourcing this material, there’s things called the gray market. Daniel, if you can kind of walk us through from a gray market standpoint, tie that into the remanufactured product here.

Daniel: 12:14

Absolutely. The gray market is one of the biggest concerns that I see for the future, for all industrial  customers. The gray market is where you can go through an unauthorized seller. Someone that may have gotten that part from an old factory, someone that has that part that may not even work. That’s what we refer to as the gray market, it’s an unauthorized seller of a part. And with that, we have the biggest concern for that over the next few years.

The reason is this is what we’ve seen is a lot of these parts are not reliable. They’ve been in machines that have been run too long and too hard. And a lot of these components and parts have been worn and they’re not made to last. Or what they should, and they’re not dependable. So a lot of our customers will see that they can save a few dollars for a lot of these gray market areas by buying a part from a gray market instead of a reliable source.

But what we’re seeing with reliability is they’re just not getting the reliability that they need from their parts that they used to when they were buying them from a reputable source. I really just encourage everyone to do as much research as they can on their sellers and where are buying and purchasing agents for industrial customers are buying their parts from. It’s crucial for them to be able to use a reputable source, to be able to get their parts that are dependable.

I won’t give any names, but we had a customer that, is a worldwide customer that everyone knows, and they provide, drinking and water solutions for a variety of different customers we’re across the world. And they were buying a lot of their parts on the gray market. What we found is they bought their part from another country.

We found that there was malware on the actual part that they had purchased from the gray market that was stealing line information as they were producing their product and was being transmitted back to a competitor who was trying to steal trade secrets. So it’s a huge issue in the industry that we see, and we want to make sure that all of our customers are protected regardless of what brands and products you buy.

We want to make sure that it’s from a reputable source. That is authorized to sell that product. We don’t want any customers taken advantage of by the gray market and being taken advantage of to try to save a few dollars and potentially being down and causing millions of dollars in loss and business.

Chris: 14:33

No doubt, man. Secure and when you were walking through that, the thing that kept coming to the front of my mind was security. How is security going to be impacted. Could be impacted by going through the gray market. And then you went to that story. I’m like, there you go.

That’s your breach right there. I mean, outside of just basic reliability, which I think most people probably think of that, right? Just the component, the hardware, but there’s so many things we’re talking smart devices. And very connected plants and a connected enterprise. Now, everything, data’s being  pushed out. We’re talking about remote connectivity is the new norm. So you gotta make sure that you’re putting in good, reliable equipment. Hats off to you.

One note, I forgot to mention at the beginning of this, we’re recording this in the midst of COVID. So Daniel, how has COVID impacting your own site services and your vendor supply and inventory programs?

Daniel: 15:33

Biggest change is that we’ve seen, Chris is really onsite procedures and really the PPE that we have to go through. Otherwise known as personal protective equipment. With that we see the different segments in different industries are now having new procedures that have to be followed. I’m in an I’ve been very lucky to be in a position to be an on-site service specialists, where I am still able for the vast majority of our customers to be able to go onsite and to be able to walk the floor and to be able to meet with engineers as needed. But with that, we’ve seen the PPE requirements dramatically change.

Just to give you a few examples. We have some customers that require a temperature check before you’re admitted on site at the guard shack. They will scan your temperature and ensure that you have a temperature that’s 104 or under. With that we have some customers that have required us to be able to ensure that we have hand sanitizers in all of our vans and trucks.

And that we temperature check as a company, all of our employees every morning to ensure that their temperature is in line, that they don’t have a fever, that they don’t have any type of sickness, whether it be a bacterial or viral infection, but the PPE is dramatically changing, at each of our customers.

And we’re seeing that, we’re seeing a lot of our signage companies coming out with all of these new social distancing signs, that many companies. Are taking forward. I’ve been very impressed with how fast companies have taken to the fact of what social distancing is that we need to practice that we need to not shake hands, that we need to not hug that we need to stay six feet apart, at least and to be able to do those things.

We have many signage vendors that we work with now that are selling these signs that are already going out to our customers that are ensuring that all employees are main six feet apart that they remind them that they have to wash their hands every hour, and removed themselves from the plant floor just to keep everything as clean as possible.

That’s some of the things that I’m seeing with our customers in a post COVID era. That we’re really having to make sure to follow those social distancing guidelines that the CDC has given us, and also ensure that all of our employees and our products are safe.

Chris: 17:51

No doubt. Now, you also have the advantage. You travel such a large territory. You see so many different types of manufacturing environments. You get to see best practices. If you will, across a multitude and our listeners, a lot of them they’re working in, specific plants or specific verticals. They don’t have that opportunity.

Would there be any advice or recommendations of best practices that you’ve seen post COVID? We’re in the midst of it now. What’s going on from an industrial end user standpoint, that you would highly recommend to our listeners because they may not have this, what you have seen implemented in their plant. And this is a great opportunity to, to share that knowledge.

Daniel: 18:32

Absolutely. There is, there’s a couple of best practices that I’ve seen that I’ve been incredibly impressed with and they really involve around two things. We have some customers that have really pulled strings that have really pulled their resources together to ensure that they have hand sanitizer. And hand-washing station guidelines for all of their employees.

Some of the best things that you can do is ensuring that whenever customers have to touch something, whenever employees have to touch anything in the facility, that they have a procedure that once they’re done, whether they’re building an actual part or an equipment, or whether they’re just working on a line that they have proper hand-washing procedures and hand sanitizer available. That after they’re done, they ensure that they do that to be able to eliminate contamination.

The other best practice that I’ve seen is we understand that some customers there’s nothing that you can do. You’re going to be around people. You’re going to be very close,  but at all availability, I’ve seen that it’s worked and it’s been very successful is with social distancing. To have at least six feet.

I have one customer that requires 10 feet distance between everyone. And that includes even in the office area, whether even with the accountants, whether you’re working on the floor in the production as an engineer or reliability specialist. Those are my two recommendations is that have good hand washing and hand sanitizer solutions to be able to keep your hands clean and free of any germs, and also to be able to keep yourself away from other contact, while you’re working on the floor or even in the office setting.

Chris: 20:09

Yeah, no doubt, man. It makes you wonder, will we ever go back. Social distancing maybe here for good. So it just, you never know, but for right now, it’s definitely a best practice. You mentioned the hand sanitizer and that washing hands. No doubt. Daniel, we  always like to wrap up our EECO Asks Why episodes with talking about the why and the purpose. So if you could maybe summarize for our listeners out there, why industrial end users should consider outside of support services, what would that be?

Daniel: 20:48

Sure. One of  the why’s is that we, my distributorship or regardless of any, outside services that come in is we provide often free services that help provide efficiency. Save costs. Save time and save our customers money. We want to be able to provide these services to be able to provide those benefits to our customers.

So there’s always a cost benefit analysis. That we’re always going to save them more time and more money than they ever could think. And that’s the why. Is that we’re trying to make our customers more competitive in the industry and to be able to do more with the resources they have available. We always want our customers to be successful and to be able to be better than their competition.

And that’s our job is to ensure that our customers are ready for the future so that they can compete in a global industry going forward.

Chris: 21:45

Daniel. Thank you so much for walking us through that why and connecting the dots for our listeners. You brought a ton of value today. Really appreciate all the insights you’ve brought. Really making people think about these services and how it impacts the plant and things that they should consider. So again, thank you for your time, and I really appreciate it.

Daniel: 22:05

My pleasure, Chris. If anyone has any questions or anything about any of the statements I made, it’d be glad to talk about it offline.

Chris: 22:11

Right. Have a great day.