Vartan Vartanian President, Service Division
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Service Division Vartan Vartanian President, Service Division Capital Markets day 2010
Transcript of Vartan Vartanian President, Service Division
Service Division
Vartan VartanianPresident, Service Division
Capital Markets day 2010
CMD 2010
Agenda1. Business overview and introduction to Service Division
2. Service Division strategy and customer cases– Value creation and validation process
3. Channels to market– Industrial distribution
4. SKF Solution Factories driving platform growth
5. Summary
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Business and introduction to Service Division
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Service Division business
Providing the industrial aftermarket with value added solutions for improved overall customer productivity based on:
• Advanced services and technical competence to optimize plant asset efficiency for industrial end users
• SKF’s platform products and services through authorized distributor channels
• Professional supply chain and global reach
The Power of Knowledge Engineering
SKF sales and Service Division share
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Service Division net sales by geographySKF Group
Asia31%
Latin America12%
Western Europe27%
Eastern Europe
8%
North America
14%
Middle East & Africa
8%
Service Division sales YTD Q2 2010 (2009)
Sales SEKm 10,728 (9,955)
Operating margin 12,8% (12,2%)
Service Division
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Service Division – services and service products
Service & service related products
Products & Systems; • Bearings• Seals• Lubrication,• Power Transmission• Mechatronics
Sales per offering type
17%
83%
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SKF is close to its customers, everywhere
• Sales units in all regions of the world • 12 SKF Solution Factories
• More than 7,000 distributors • 15,000 distributor outlets globally• 166 Certified Maintenance Partners
End-user business issues
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1. Reduce costs
2. Continuous improvements3. Safety
4. Increase productivity
5. Reliable spare parts
6. Solve difficult technical problems
7. Align people and processes with organization strategy
Voice of our customerscustomer survey 2010
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Major SKF authorized distributors
Europe Asia
Ajit Bearing Company
North America &Latin America
More than 7,000 distributors and 15,000 distributor outlets globally
Industrial distributors bring value to SKF by their:
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• Core competence in logistic and inventory management
• Broad range of products
• Spare parts supply optimization knowledge• Reduction of working capital
• Flexibility
• Local presence
• 24/7/365
• In-site operations at customer
• and more…
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Service Division strategy and customer cases
Service Division core strategy
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• Effective “Key Account” value selling
• “Growth” industry segment focus
• Improved distribution footprint
• Platform growth, supported by SKF Solution Factories
• Supply Chain “Best in Class”
• Committed & motivated people
• Profitable growth
• BRIC focus
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Delivering the SKF value
VALUE SELLING
PLATFORMS
INDUSTRIES
…consistently
CUST
OM
ER
CUSTOMER CHALLENGES
•Raise energy efficiency
•Increase productivity
•Decrease maintenance cost
•Optimise designs
•Reduce costCLIENT NEEDSANALYSIS
SKF E2 bearings used in electrical motors
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DFSE* Przymierze in Poland invests in SKF E2 bearings for better energy efficiency.
Electrical motors used in• Wood machines• Concrete-mixers• Pumps• Fans• Lawnmowers etc
Now benefiting from a lower energy consumption and an increased lifetime.
* Dolnosląska Fabryka Silników Elektycznych
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Customer need:Professional lubrication systems.
SKF solution:Flowline circulating oil systems. Including: oil tank, pump station, digital flow meters, flow monitor and flow meter panels.
Customer benefits: •Reduced oil cost•Reduced energy and cooling water consumption•Increased running efficiency•Dependable support from SKF Solution Factories
Key customer in the paper industry, China
Global Key Accounts platform split
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Service
Seals
Mechatronic
Power Transmission
Lubrication
Bearings & Units
Global overview
Global Key Accounts platform split
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Service
Seals
Mechatronic
Power Transmission
Lubrication
Bearings & Units
Global overviewMetal industry
Global Key Accounts platform split
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Service
Seals
Mechatronic
Power Transmission
Lubrication
Bearings & Units
Global overviewFood & Beverage industry
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Validation - customer request
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Delivering the SKF value
CUST
OM
ERPLATFORMS
VALUE SELLING
INDUSTRIES
…consistently
CUSTOMER CHALLENGES
•Raise energy efficiency
•Increase productivity
•Decrease maintenance cost
•Optimise designs
•Reduce cost
4,400 (3,800) casesSEK 3,300 m (2,840)
approved savingsin 2009
How we define measurable value
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•By SKF Documented Solutions Program or contract key performance indicators (KPI)
•Presented in financial language
•Aligns with customer objectives
•Provides SKF (one or more of):• Improved profit levels
• Superior pricing
• Increased volumes
SKF Documented Solutions Programme
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Situational questions -Background questions about the business
Problem questions –How frequently does this machine / componentbreakdown?
Implication questions –What are the costs of breakdown? Lost production?
Need questions –What if you could increaseMean Time Between Failure from X to Y?
SKF ConRo solution in action
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2. SKF sealed SRB solution1. Traditional open SRB solution
3. SKF ConRo solution (re-lubrication free)1. High grease consumption and negative
impact on the environment2. Reduction of grease consumption3. Zero level of grease consumption leading
to a positive impact on the environment
* SRB = Spherical Roller Bearing
SKF ConRo solution to RIVA Group, Italy
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RIVA Group is a conglomerate of companies operating in the steel production industry. It's the outright leader of the sector in Italy and 3rd
in Europe. Riva has an overall production capacity of 23.5 Mtons a year. ILVA TARANTO with 7 Mtons of casted steel/year is the biggest plant of the company.
As part of their work in Environment Management RIVA Group chooses SKF knowledge to increase efficiency and the respect of the environment by using the SKF ConRo solution for their continuous casting machine.
Additional orders won
Additional customers won
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Channels to market
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• Create long-term sustainable partnerships with distributors
• Channel aftermarket sales via channel partners (distributors)
• Concentrate on building brand preference among final end-users
• Provide sales, technical and marketing support for distributors
• Compete on value
Serving customers via distributors
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Footprint diversification
SKF Core Technologies
MiningCement
Food & Beverage
WindPulp & Paper
Oil & Gas
Metals
Industry SpecialistDistributor
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CMP strengthens distributorvalue by providing new ”high-skilled” entry levelreliability services
SKF distributor development & support programs
Markets distributors’ and SKF’s capabilities to increase end-users’uptime and productivity
The ”More with SKF”programme creates a sustainable business modelfor SKF and Distributors.
Certified Rebuilders worksinside the end-users and creates a valuable linktogether with SKF.
Certified Maintenance Partners workshop Singapore – June 2010
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58 Certified Maintenance Partners:
108 distributor delegates whereof:- 68 owners/managers - 40 technicians
11 countries from Asia-Pacific
Workshop on value selling
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SKF Distributor Value Programme
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Using the SKF DVP tool distributors are able to:
• Identify and record the provided value-added services• Document the value of the benefits provided• Support cost saving agreements
Distributor training: Distributor College
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No of Certificates
34 different courses available in diverse languages
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Distributor programmes: Distributor CollegeDistributor training: Distributor College
Price increases
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Effective May 3rd 2010Effective May 3rd 2010
Effective April 2nd 2010Effective April 2nd 2010
Effective March 29th 2010Effective March 29th 2010
Effective March 1st 2010Effective March 1st 2010
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SKF Solution Factories driving platform growth
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Brasil “IXION”
Colombia
MonterreyMexico
Edmonton
Tianjin
Taiwan
Pune
SEA-South(Singapore)
Australia
Moscow
Istanbul
Nordic (Gothenburg)
UK
Johannesburg
San DiegoCleveland
Houston
TorontoGermany
Italy
Shanghai
LaunchedPlanned Future
FranceKulpsville
CEE Poland
Saudi-Arabia
Bangkok
Japan
LaunchedPlanned Future
SKF Solution Factories
Up to 30 SKF Solution Factories by 2015
SKF Solution Factory
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Specialist competences Service centres
Core product technologies
One source
Industry and applicationknow-how
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SKF Asset Management conferences
2 SKF Asset Management conferences in 2010
Europe: 155 customersAsia-Pacific: 120 customers
2 SKF Asset Management conferences in 2011
Latin America and North America
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Summary
Key business message
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• Working to improve customers productivity
• A global network close to customers – knowledge sharing
• Platform growth, supported by SKF Solution Factories
• Proven value – consistently
• Profitable growth
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Creating value for customers and distributors
and delivering
profitable growth to shareholders through a
motivated
knowledge workforce.
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