Predictive Maintenance as a Tool for Servitization : The case of a value-added reseller in the construction equipment industry

Abstract: The construction equipment industry has been slow to increase its level of servitization, compared to other related sectors such as the car and flight industries. The fundamental problem is the endless variants of machines and business settings that their customers operate in. Hence, scaling up standardized solutions has been a struggle in the industry. Moreover, the manufacturers are often disconnected from the end customers, where value-added resellersoften act as the middlemen selling machines and offering the services connected to them. They generally have better customer relationships than manufacturers, which implies a better situation for servitization. Companies in the construction equipment industry are pushed more toward data-driven decision-making. One such case is utilizing log data from the machines to predict the remaining useful life. A technology referred to as predictive maintenance. Henceforth, the value-added resellers could potentially increase their level of servitization with service offerings that derive from this technology. This thesis explores the role predictive maintenance has in advancing the level of servitization in the construction equipment industry. This thesis was conducted through a single-case study of a value-added reseller in the construction equipment industry, with a practical model-building part inspired by the methodology of action research. Findings indicate that predictive maintenance implies benefits for servitization purposes by gaining insights about how and when construction equipment fails. However, there are barriers to implementing a predictive maintenance model; both technical and organizational. This thesis suggests systematically evaluating capabilities related to the identified barriers and investing accordingly. Predictive maintenance is an essential tool for providing advanced service agreements in the form of Productivity-as-a-Service. In the end, it comes down to what risk the value-added resellers are willing to take; (1) the risk of incumbency, allowing competitors to implement predictive maintenance and gain market shares or (2) the risk of investing excessively and failing to overcome the challenges related to the implementation of predictive maintenance. This thesis contributes to findings regarding the intersection between servitization and predictive maintenance in the construction equipment industry. More specifically, through the lens of a value-added reseller. From a sustainability perspective, implications may affect companies to reduce waste related to construction equipment maintenance and strengthening economic sustainability through recurring revenues.