Why Do Aftermarket Capabilities Often Sit in the Backseat of Digital Transformation Priorities?

By Carolyn Rostetter, Sr. Director, Industry Principal – Pegasystems Inc.
By Pugal Janakiraman, Principal PDS – AWS

Pegasystems

Internet of Things (IoT) technologies increasingly connect the automotive and industrial manufacturing world through advances in artificial intelligence (AI) and machine learning (ML).

Manufacturers are plagued by complex, disconnected, antiquated, and often “random acts” of data, applications, processes, and solutions. Legacy and home-grown systems often lack visibility to performance data across functional areas.

The robust architectures required for intelligent automation, big data analytics, machine learning, and operationalized actions from mined insights are frequently absent. As a result, while most enterprises chase digital transformation, many initiatives fail. Yet, the new generation of always-connected consumers expect increasingly superior digital experiences.

Smart manufacturing and aftermarket services both require a new approach to connected device maintenance, recall, and warranty value chains. IoT is an important enabling technology, but innovation, operational improvement, revenue generation, and customer experiences require accelerated digitization and application development.

To really succeed, manufacturers need to automate the end-to-end processes connecting devices and users to the extended value chain.

This post highlights how the seamless combination of Pega’s low-code intelligent automation and AWS IoT architecture can provide manufacturers with the most compelling digital transformation platform that works with the most common use cases.

Pega combines sensor data, event-streaming, in-memory databases, and real-time analytics with decisioning and workflow orchestration. This allows Amazon Web Services (AWS) clients to proactively dispatch a technician to make a fix—before the customer is even aware there’s a problem.

Pegasystems is an AWS Competency Partner that delivers innovative software that crushes business complexity. From maximizing customer lifetime value to streamlining services to boosting efficiency, Pega helps the world’s leading brands solve problems fast and transform for tomorrow.

Pega clients make better decisions and get work done with real-time AI and intelligent automation. Since 1983, Pega has built its scalable architecture and low-code platform to stay ahead of rapid change. Pega’s solutions save people time, so clients’ employees and customers can get back to what matters most.

Manufacturing Journeys Are More Complex Than Ever

Combining IoT and process automation offers huge digital transformation opportunities. The aggregate economic impact of Industry 4.0 is projected to be between $500 billion to $1.5 trillion in the next five years, according to Capgemini.

Devices such as connected cars are particularly critical for manufacturers, suppliers, and especially end customers or fleet owners. So, while automotive aftermarket journeys might remain an afterthought, the business impact is considerable:

Aftersales generate 20% of revenue and ~50 % of profits for OEMs.
In 2017 alone, ~23 million vehicles were recalled in non-Takata airbag campaigns.
Warranty claims impact OEM revenues by ~3.3%.
72% of vehicle owners would pay a flat monthly fee for “invisible” effortless service. This includes conveniences like “vehicle pick-up and return to home.”

An even more significant impact is realized through IoT devices that connect manufacturers to their customers. Manufacturers can understand how, when, and where their devices are used.

The intelligence mined from customers, as well as device behavior, not only optimizes the device operation and customer preferences but also provides opportunities for innovation. IoT with intelligent automation realizes the often-elusive business value of connectivity technologies.

Example: Challenges of Warranty Value Chains

In its current state, the warranty process is full of roadblocks. Yet, warranty provides a differentiation opportunity for manufacturers. Despite a reduction in the number of claims, warranty costs have increased notably.

Customers spend $2 trillion in warranted product sales, while a typical manufacturer now spends 3-4% of revenue on warranty management, one of their most significant expenses.

Existing legacy systems require manual interventions and hand-offs, with zero immutability of records. Thus, the onus is on the customer to prove ownership and warranty coverage. This contributes to delays, decreased customer satisfaction, work duplication, and anomalous or fraudulent claims.

A Pega-commissioned survey of the aftermarket buying habits and perceptions of more than 1,000 U.S.-based consumers found that 60% percent agree that warranties provide value. Meanwhile, 62% of consumers with active warranties report benefitting from them within the past year.

Aftermarket challenges can be transformed into differentiating opportunities and addressed through the aggregation of two fundamental technologies: intelligent automation seamlessly integrated with the IoT platform on the cloud.

Intelligent Automation with IoT

Intelligent automation has evolved from traditional workflow and business process management (BPM). The end-to-end chain of work assigned to different units and partners is only as strong as the weakest link. Dynamic case management (DCM) provides direct digitization and automation of value chains.

End-to-end automation is increasingly intelligent, especially via operationalized big data insights. Automating repetitive tasks and providing AI assistance to knowledge workers is the new norm.

Model-driven low-code/no-code development now supports citizen developers and citizen data scientists. This accelerates the development of robust enterprise applications and eliminates traditional organizational siloes between business, IT, and operational technology (OT).

Intelligent automation is therefore the prime enabler for digital transformation. It serves as the catalyst for innovation for accelerated development, process automation, and the shift of customer journey value chains from siloed, manual tasks to digitally transformed operations.

Figure 1 – Reference architecture for industrial applications built with AWS IoT and Pegasystems.

Pega and AWS have developed a joint reference architecture to showcase the integration between AWS IoT and the Pega low-code intelligent automation platform. This architecture can be extended for most common industrial and automotive use cases.

AWS IoT Edge gathers data from machines, vehicles, and equipment running in the industrial environment or in the field. Services like AWS IoT Greengrass, AWS IoT Device SDKs, and the IoT device gateways push data to AWS through AWS IoT Core, which is ingested into AWS industrial data lake through Amazon Kinesis Data Firehose.

The transformed data is stored in Amazon Simple Storage Service (Amazon S3) as data sets, which can be used for analytics by industrial AI services (Amazon Lookout for Equipment and Amazon Lookout for Vision) to identify anomalies that can be pushed to Pega to take actions and orchestrate business process workflows.

Aftermarket Services Shouldn’t Be an Afterthought

IoT connectivity in aftermarket services offers tremendous potential for innovation and operational optimization. Access to remote devices, as well as real-time data and analytics, helps optimize customer service.

According to a recent survey, 40% of drivers said it was not easy to know what to do to resolve issues they encountered while driving.

What if you could predict issues before a driver sees their check engine light, and then use that intelligence to make sure service teams have the parts and skills ready for a quick fix? Not only would you save time and money, you’d also improve the customer experience.

This kind of real-time prescriptive maintenance isn’t futuristic. It’s here, as powerful technologies combine sensor data, event streaming, in-memory databases, and real-time analytics with decisioning and workflow orchestration.

The connected device—a connected car in this example—can generate a maintenance case through a machine learning model forecasting the remaining useful life of a component or via sensor events. After creating the case, intelligent business logic can select the next-best-action.

One option is sending the service technician closest to the dealer who services the car. After closing the service order, a warranty sub-chain is created to pay the dealer and return parts, if necessary. This value chain is only as strong as the weakest link. Thus, a combined IoT + intelligent automation digitization ensures the issue is optimally completed and resolved.

Combining intelligent automation with IoT, AI/ML, and blockchain provides warranty capabilities that include remote diagnostics, predictive analytics, and immutability records.

Manufacturers benefit from a 360-degree view of asset performance in near real-time, predictability of asset failure, immutability of documentation across the value chain, automated processes, and optimizing parts and service operations for warranty customers. These capabilities transform aftermarket from an afterthought into an integrated process with significant intelligence to drive better business outcomes.

Conclusion

Manufacturers are struggling with operational complexity and disjointed or disconnected siloes of processes, people, data, and systems.

Proven enterprise-scale technologies can turn data and insights into actions, drive continuous improvement, and deliver superior business outcomes and customer experiences. All of this can be done while accelerating the journey to Industry 4.0 and future-proofing your business for the changes that are yet to come.

To jump-start the process. there is a better way to orchestrate getting work done across the aftermarket services value stream. Pega’s low-code intelligent automation platform and AWS IoT unify, orchestrate, and automate capabilities across the customer and product lifecycle.

To learn more about how Pega and AWS can help you accelerate your digital transformation journey and optimize aftermarket services, check out the Digital Prescriptive Maintenance solution.

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