A more sophisticated approach to supply deriving from TOTEX principles

As suppliers to the water industry will know, the success or failure of an important part of your business is tied to AMP cycles and framework agreements. However, with the advent of the TOTEX (TOTal EXpenditure over the lifetime of a piece of equipment or project) approach, we also have the chance to introduce a more sophisticated business model that goes beyond a simple ‘lowest selling price’ strategy. At electric actuator manufacturer AUMA UK, we have realigned our business around the core idea of ‘Servitization’, an approach that has even involved a physical remodelling of our Head Office to bring departments closer together. We have also created a more sophisticated approach to inventory and the service process. The purpose of this article is to provide an overview of the way in which AUMA UK has approached the challenges and how we have sought to emphasise the service element of the product/service mix. 

Never complacent

There is a basic principle, well understood by successful manufacturers – “Goods derive their value through use – the service they provide” (Service-Dominant Logic, Vargo and Lusch 2008), or, put another way, “Sell the sizzle, not the sausage” (every good salesman, always!). 

It is too easy to sit back and say, ‘we always deliver on time, our products are good and we sort problems out quickly’, and assume therefore that service levels are perfect. It is important for AUMA to understand where we currently sit in relation to our target levels of service, so we conducted an independent survey, to identify any gaps that existed between how we felt we were doing and how our customers believed we were treating them. We used a ‘ServQual’ approach, measuring ourselves against five different possible gaps between service expectation and delivery. There’s plenty of information online for anyone who wants to read more about ServQual. 

Opportunities to improve

In almost every area we were pleased that our customers scored us highly, but we were also able to identify issues that needed addressing, particularly around responsiveness. We felt that we could address that by bringing our service and customer service functions physically closer together, creating a team environment, and to that end we have used space in our Clevedon offices to create a completely new area. We were also able to create a new workflow for actuators returning to base for repair. AUMA is a German manufacturing company, with four European factories for us to draw from, with a product range based on modularity; actuator controls, gearboxes and drives are selected specifically for each project, with thousands of configuration choices available. We analysed our inventory strategy in light of our manufacturing flexibilities and optimised that in light of the demand from the market to make sure we were well-prepared but lean. 

In terms of service, though, that’s only half the battle. In order to create a ‘servitized’ business, we have to find a mechanism to offer high-quality and consistent service at all points of usage. We have created an accreditation process for individuals who are delivering support at each stage in the life of the actuator. Most new actuators are installed in combination with the valve that they will operate, and we want to make sure that it is possible for valve manufacturers to mount and configure an AUMA actuator in a professional, managed way. Once on site, we want to make sure that the actuator can be commissioned and subsequently maintained correctly, and indeed diagnosed and expertly repaired when necessary. An additional benefit of the remodelling of our Head Office was the creation of space for us to develop a larger Training Academy, a base to deliver our accreditation programme. ACE (AUMA Certified Engineering) is a three-tier programme designed to train technicians throughout the value chain to manage and maintain AUMA equipment. ACE trained technicians can be employees of the OEMs, water companies or employed by service partners. Regular refresher courses maintain accreditation and on-line tools both support and confirm ACE technicians’ credentials. On-line tools can be used by ACE technicians to provide details and the history of individual actuators.

What's next?

We don’t know how the future will look, though with new sophistication deriving from Water 4.0 and IIoT we know that data will lie at its heart, and the movement of water, the treatment of waste will be expressed as data with ever-increasing granularity. What we do know though, is that manufacturers like AUMA will, by continuous innovation in product, process, paradigm and position, continue to serve a world in motion.