Universit degli Studi di Bergamo Facolt di Ingegneria

ANALYSIS ON THE ACTIVITIES OF LIFT TECHNICAL ASSISTANCE AND MAINTENANCE CENTER AND SUGGESTIONS FOR RE-ENGINEERING THE SYSTEM

MORGANTINI Marzia 1007868 VAVASSORI Marco 1007332

Graduate Program in Management Engineering

1

EXECUTIVE SUMMARY
In this short abstract, we tent to resume the results obtained analyzing the LIFT TECHNICAL ASSISTANCE AND MAINTENANCE CENTER using different tools, such as CSF identificanton, Porters Model graph, KPI and Competitive Priorities analysis, ARIS process-modeling tool etc.

CRITICAL SUCCESS FACTORS The main factors that the company considers critical and fundamental to its success are: - Price Leadership; - Product Supremacy; - Quality; - Timeliness / Punctuality. STRATEGIC MODEL OF THE COMPANY The strategy adopted by the company to achieve a competitive advantage using Porters model and the analysis revealed that LIFT has pursued a strategy of differentiation. This strategy allows the management not to consider the costs as a critical variable on which to base the success itself. KEY PERFORMANCE INDICATORS ANALYSIS Providing maintenance service is the most profitable business of the company, therefore measuring the performance of the process become a fundamental aspect for the company and must be analyzed starting from a strategic level, using Key Performance Indicators to understand the right strategy for both correcting actions and solving critical issues. Flexibility, punctuality, quickness and quality of the service are found to be the most important issues and must be constantly analyzed and improved. Key Performance Indicators in these fields are, for example: the number of callbacks; number of training days per technician; number of lifts maintained by a single technician; frequency of the service activities; time needed to intervene; percentage of emergency request etc.
2

ARIS PROCESS MODEL We considered it appropriated to use ARIS modeling tool in order to analyze the entire intervention request service, giving more relevance to the temporal dimension instead of the multi-level IDEF0 model.

OBJECTIVE: analize and simplify the callback process, suggesting intervention to improve certain non-optimal aspects .

CONCLUSION: in order to re-engineering the process, it will be necessary to revise the entire communication area, as well as the suddivision of different

IDENTIFICATIONS OF CRITICAL SUCCESS FACTORS (to develop an optimal operations strategy)

Critical Success Factors (CSF) are indicators that measures business success in accomplishing its strategic plan and objectives. CSF are customized to each organization and help provide focus to steer the organization toward fulfilling its vision through strategic objectives. As far as LIFT is concerned we can identify four main CSFs: Price Leadership, Product Supremacy, Quality, Timeliness/ Punctuality. - Price Leadership: The company focuses not only on the quality of the product, but also on service contracts, on the stable after-sales service, which is what brings the most revenues Technical assistance business was traditionally the most profitable so they have to work in order to maintain and improve it. - Product Supremacy: The position in the marketplace and the adopted strategy to gain market shares are fundamental for LIFT; the largest company in the world, a leader in its sector must continually keep up to date to face competitors. For this reason, after entering the market of smart elevators, LIFT has found it necessary to make some changes in organizational structure and working methods. The director of the company was however worried that these changes could affect the well-known relationship between engineers and customers which were part of the success of the company.

- Quality: When we talk about quality we mean the quality of service offered by LIFT. First of all, the company gives all technicians and assistants an initial intensive job training to help them to adequately respond to all basic services required and to any need from the customers. They will also be called to attend regular training and refreshing courses in order to keep up to date. The best way to ensure quality, however, is represented by the annual inspections that maintenance supervisor have to do in order to check the work done on their areas, the periodic certification of operation of the lift and the bill of work to prove the reliable record of the inspection. Also a Check Card provides a record of the tasks that the maintenance technicians make every month, even if it does not take into account the level of use of lifts and other important variables: this is not seen as a problem for the company that relies on a wide margin of decision of its experienced technicians. A small lack in the quality of LIFT service can be found in the fact that the same technicians are responsible for both ordinary maintenance and emergency intervention, thus affecting both quality and efficiency. - Timeliness/Punctuality: The emergency response service is very fast and efficient and is one of the most appreciated aspects by the customer. The responsiveness in case of emergency is preferred even at the expense of ordinary maintenance, which is temporarily suspended.

Other CSFs which are not considered that critical by the company are for example: Price: The company can keep the cost of the product low because the profit is generated by the service and because maintenance is made periodically. Customization: Because timeliness is a critical issue and a fundamental objective, all the technicians are specialized and well-formed on standard services and no custom service is either provided or requested. Customer satisfaction: Customers seem really satisfied about the product and in particular about the after-sales service and. Though satisfaction is not a critical issue it is still achieved thanks to the above mentioned 4 main CSFs. Employee satisfaction: Employees have a degree of autonomy and the company trusts them, since they have been trained with specific courses and regularly promoted through career assessment criteria and salary incentives.

(note: a critical success factor is not a Key Performance Indicator (KPI). Critical success factors are core elements for a successful operations strategy.)

CORPORATE AND OPERATIONS STRATEGIC MODEL OF THE COMPANY (explained through the Porters model)
The model of five competitive forces, also known as Porter's model is a part of the analysis of the sector as it shows the firm's position on the market. According to this model, there are 5 forces that determine industry structure and affect its profitability: direct competitors; suppliers; customers; potential competitors; manufacturers of replacement assets.

The stronger these forces, the lower the capacity of existing enterprises in the sector to raise prices and increase profitability. The aim of the model is to identify and analyze the forces that reduce the long-term profitability of the company in order to contrast them.

The main tool to understand the nature of competitive advantage is Porter's value chain. The competitive advantage may lie in each of the activity that the company carries, from design to production, sales, customer care.

Each of these activities will be predominant, depending on the industry in which you choose to compete. As regards LIFT, it is easy to understand that its primary activity is that of technical services, providing after sales service, which gives a much higher share of profits. The aim of LIFT is to improve the perception of the value of the product purchased, through an accurate periodic customer service, a service for emergency repairs as well as through its own way to interact with customers, relations between
9

engineers and customers had been for over 100 years the cornerstone of the success of the company. Porters model states three different competitive strategies for a company to create a position of relative strength in the market and face competitors on the above mentioned five factors of competition: cost leadership differentiation segmentation.

LIFT, on an enterprise level, has adopted the strategy of differentiation of product/ service thanks to: - A powerful and generally recognized image, being the largest company in the world in the production, installation and maintenance of lifts, elevators, escalators and moving walkways, light rail short-range, both in private and public sectors.

10

- An accurate customer service through ordinary maintenance service, visiting the units installed in their area from 2 to 4 times a month to perform preventive maintenance and respond to requests for intervention. () The emergency service, quick and very much appreciated by customers with a response time of less than 3 hours (less than 1 hour for emergencies) 24 hours a day, 365 days a year. - A detailed and dedicated sales network, taking care of 40-70 lifts which could include a few blocks of a big city or more rural municipalities. About 7% of the maintenance technicians were assigned to teams specifically assigned to large installations.

On the other hand, Cost Leadership is not influencing the strategy patterns since once the product is installed Lift is the only official service provider that can grant the optimal operation of the elevator. This analysis is also supported by a view on Porters two axis graph relating to Cost and Differentiation Leadership:
Competitive advantage given by cost leadership Competitive advantage given by low cost and differentiation

COST LEADERSHIP
Companies stuck in the middle

Competitive advantage given by leadership of product differentiation

Here is LIFT, in terms of advantage given by the after-sale service

DIFFERENTIATION LEADERSHIP
11

ANALYSIS OF THE COMPETITIVE PRIORITIES (Main KPIs for monitoring and measuring the performance in providing maintenance service)

As seen before, providing maintenance service is the most profitable business of the company. Monitoring and measuring the performance of the process become therefore a fundamental aspect for the company and must be analyzed starting from a strategic level, using Key Performance Indicators to understand the right strategy for both correcting actions and solving critical issues. In this field, different competitive priorities should be taken into account: some aspects, such as cost and general quality of the product are considered as given by the customer and do not contribute in differentiating the company (order qualifier); others, such as flexibility, punctuality, quickness and quality of the service are, on the other hand, fundamental and must be deeply and constantly analyzed and improved in order to define and maintain the competitive elements that distinguish the company from other competitors (order winner). We can analyze the main LIFTs competitive priorities showing the Key Performance Indicators used to track them. The first and main competitive element for the technical service department is to offer a high quality and high level of service, achieved by offering quality products, preventive maintenance plans and skilled technicians. In order to monitor and measure this fundamental aspect, LIFTs management uses an indirect measure, that is the numbers of callbacks, which should represent with a single measure all the efforts made for offering a high level of service:
12

in fact, this easy-to-obtain indicator contains all the main aspects that should be monitored in the maintenance service process, in fact it can easily show whether preventive maintenance is useful in order to prevent failures, how technicians are working, how they are coordinated by their supervisors and many other aspects of the process. To show how much this indicator is considered valid from the companys point of view, note that besides being a good indicator of performance (KPI), the number of callbacks is also used as a criteria to give salary incentives and bonuses to the technicians and supervisors that are working in the proper way. Of course it isnt the only indicator in order to control the whole service department, in fact it doesnt indicate exactly where to take actions, how to improve operational performance or how to make the service more efficient. As indicators of the skills and the experience held by its technicians staff, the company uses for example the number of training days per technician, as well as the number of lifts per technician; To analyze in detail how resources are allocated, LIFTs management measures also the number of hours in a year spent in average on a single lift and the frequency of the activities (all these data are recorded on the check card of the specific lift). These indicators are good for showing how the budget of available hours is allocated, but LIFT will have to implement also others KPIs, for example keeping track of the MTBF (mean time before failure) in order to avoid failures in the future and implement the preventive maintenance program.

13

In fact LIFT management have clear in mind that successful maintenance is not about fixing failures but it is instead about not having failures to be fixed at all. This fact is evident also analyzing the allocation policy about Human resources, in fact the percentage of resources assigned to routine/preventive maintenance versus the ones responsible for repairing after failure is about 75% vs. 25%. Speaking about emergency management, main indicators adopted by the firm are for example the time needed to intervene in case of emergency, or also the percentage of emergency requests over the total amount of calls.

(note: the last aspect in particular is one of the strengths of the company. By the way, we will show later a more detailed analysis of weaknesses/strengths of the company)

14

PROCESS MODEL (developed using ARIS model)

SERVICE CUSTOMER CALLBACK: Objective: -Answer to intervention request -Acquire all the main information about the failure -Notify the technician Main figure: LIFTLINE Operator

Suggestion: Integrate the three database in one.

15

Suggestion: use an integrated database for all the main data.

Suggestion: with new smartphones, notifications will be easier and more immediate.

16

DELEGATE THE TECHNICIAN: Objective: -Find an available technician -Provide him with the necessary info. -Identify the problem Main figure: LIFT Technician

Suggestion: in future, different tasks will be covered by different technicians in order to avoid works left incomplete or interrupted.

Suggestion: Notifications with all the info will be sent directly to the technicians smartphone.

17

Suggestion: The callback intervention squad will be always ready to intervent without interrupting other works .

ENDS THE

LEFT

Suggestion: By accessing the database, the technician will exactly know what is needed even before being on the location.

18

SOLUTION OF THE PROBLEM: Objective: -Evaluate the pattern to solve the problem -Solve (or partially solve) the problem -Notify LIFTLINE Main figure: LIFT Technician

Suggestion: The technician will already have all the requested material and competence to autonomously solve the problem.

19

Suggestion: no more previous work left incomplete.

Suggestion: No more need to make a report, the intervention description will be automatically updated on the database using a smartphone.

20

WEAKNESSES, STRENGTHS AND PROCESS CRITICALITIES OF THE COMPANY

In general terms the company can claim many strengths: first of all, LIFT is the leader of the market and has more than a million of products installed all around the world. Being the leader of the market enormously increases the value of the firm but, on the other hand, the company is asked to be always out with new and technologically advanced products as well as ensuring a fast and reliable technical assistance department. One of the reasons of the success of the company is definitely the ability of managing good relations between engineers and customers. Another big strength of the company is the competitive price, thanks to the decision of keeping low margins on the sale of the product, in order to operate a trojan horse strategy and obtain profits offering a full covered maintenance and an after-sale service contract. As said before, being technologically advanced is a must, especially for a market leader as LIFT, and thats why the number of new products recently offered by the company is increasing exponentially. In fact LIFT has recently introduced a new line of products controlled by a microprocessor instead of the traditional electro-mechanical technology. The introduction of these new products has allowed LIFT to keep and protect from competitors its important share of the market, but this is also creating the upmost concerns in the
21

management, by showing important weaknesses in the technical assistance department. In fact, the most demanding aspect of LIFT business (as well as the most profitable) is definitely the technical after-sale assistance service, that must be provided to the customer in order to maintain the product safe and reliable. This is where LIFT used to excel, having reliable and well trained technicians and a toll-free number called LIFTLINE for intervention requests (callback) and providing a 24/7 fast emergency service. While the product range is increasing and the needed competence and skills for technicians are getting higher, this field has inevitably started showing some main weakness that will have to be reviewed and improved. In particular, the management will have to take actions on three of the main areas of the technical assistance department: the system management, the structure and relationship between technicians and supervisors and the skills of the technical staff and training techniques improvements.

22

SUGGESTIONS OF IMPROVEMENT AND REENGINEERING ACTIVITIES

The main, fundamental issue that has to be deeply renewed is the subdivision of tasks between technicians and the coordination between them and supervisors. As the complexity of the product is growing, customers expectations are getting higher and the competence and skills of the technicians should grow in parallel. Therefore it will be necessary to reduce and split the various functions in more precise and specific jobs. Higher specialization mean better service for the customer. In fact the risk is having too low specialized technicians that wont be able to work on specific products and provide an adequate service to the customer. This way we can also solve the redundancy issue in sending a supervisor to check whether the work of the technician is made in a proper way, which is a no longer sustainable waste of time and resources. The suggestion is that groups should no more simply brought together on geographical basis, but to create specific groups for every specific task, for example a group of technicians high skilled on maintenance of microprocessors equipped lifts, another group for electromechanical systems, others responsible for conducting periodic certifications, others to perform inspections and to train new technicians, a specific squad always ready for intervention request (callback), technicians expert on reparations etc.

23

This way, every technician will always be focus on its own work, with an increasing level of experience and certainly able to provide the required competences. However, in order to make these changes effective and to ensure the quality of work provided, the company will have to intervene at least in three directions: improve communications, develop more specific and detailed training courses and give a more managerial / coordination function to the role of supervisor.

-Communication is definitely the main issue in a company that has to provide a more and more responsive, high skilled and quality service to their customers. As we know, in the past the situation under this specific aspect was well under the excellence. Two-way radios are nowadays obsolete and non-functional to guarantee an adequate level of coordination and make it difficult even to simply communicate between technicians and supervisors. The suggestion In this case is to improve an integrated webbased system of communication managed by LIFTLINE and using smartphones to allow easy interaction and precise coordination between the different maintenance teams. Working in this direction, also all the information contained on the callback cards, on the bill of work, on the check card of every lift, as well as the information about customers contract and type of product, should be integrated in a single webbased database, accessible from every technician from their smartphones and directly updatable after every operation is
24

performed, avoiding redundancy of work and making easier future interventions. Thanks to the adoption of microprocessors, it will be also easier to acquire more significant data on the usage of every lift, directly sent them to the technical assistance department and guarantee always the correct preventive maintenance and tent to reduce failure to zero.

-Enhanced the communication level, the next step is to define more specific and efficient training courses. Courses will have to be no more on the full range of products, instead the target will be providing excellent training on a determined and particular task. This way the goals reached are at least two: reducing the training time for technicians while having more skilled and job trained experts after the courses.

-The last aspect that should be improved and modified is the role of supervisor. So far supervisor was ask to follow the performance of its team of technicians, also personally verifying the quality of their work by visiting the location of the interventions. This was useful because technicians were the real decision makers of their working program, and working methods were not standardized, so that a last check from the supervisor was required in order to verify the final result of the intervention. Enhancing and dividing technicians job in more differentiated groups, supervisors should now be more concerned about coordinating and managing the various operations, defining a
25

procedure and choosing the proper technician team for each intervention, to have more control on the work of the technicians. This more managerial aspect of the role of supervisor will allow a better responsiveness on problems, more specific interventions and less waste of resources, time and money.

(note: more specific and detailed suggestions on the process are reported on the previous ARIS analysis part).

26

27