Tracking Tools in the Supply Chain – Pre-stage or supplementary to IoT?

Talking with Brian Snow, General Manager Global Services at Parker Hannifin Parker is one of the largest manufacturers of drive and control technology in the world – with a focus on the areas of hydraulics and pneumatics, filtration, sealing technology, climate control and aerospace. With nearly 57,000 employees, Parker Hannifin operates from Cleveland Ohio in 50 countries worldwide. Ludwig Meister is a certified Parker hose assembly and connector technology supplier due to its equipment, workmanship, testing, documentation, education and training. Over the years we have built up a very close, co-operative connection between Ludwig Meister and Parker Hannafin. On the sidelines of a Parker Hannifin management visit to Dachau, I had the opportunity to talk with Brian Snow, General Manager of Global Services at Parker, about the idea and development of the Parker tracking system and how to share it in the wider context of the Internet of Things (IoT) technology. Enjoy listening.

Transskript

Welcome to “Max and the SupplyChainHeroes”, your entrepreneurial podcast on the topic of purchasing and logistics in the digital transformation. Interviews and insights from and with professionals in the field of supply chain management, completely without consultancy mission. I’m Max Meister and managing family business owner in 3rd generation.

MAX MEISTER: Okay, so perfect. Today here is Brian Snow from Parker in Cleveland. Great having you. (BRIAN SNOW: Thank you.) Before it starts maybe you can introduce yourself, who you are and what do you do?

BRIAN SNOW: Yes, I am Brian Snow. I work for Parker Hannifin and I worked for Parker for the last 23 years. More recently I am responsible for our Services Business in Parker. And really what that means is, you know, we are a hundred year old company that is a large manufacturer of many different hydraulic and pneumatic components. But we build services around those components to keep our customers safe, keep their equipment up and running and help extend the services that our distributor partners can offer out on the market place.

MAX MEISTER: Can you describe how these services around the products work today?

BRIAN SNOW: Yes, so an example might be around hose-assemblies. Hose assemblies that carry, you know, hydraulic fluids or different types of media do tend to wear out. They are a wear item, because they are flexible and because of some of the very harsh environments that they can be asked to live in while they do their work. They do wear out. And they have to be inspected, they have to be checked, they sometimes have different certain certifications that they carry with them in order to meet industry requirements. So a service around that might be to offer those inspection services, to go into factory floors, as a distributor, maintenance or tech team. And they could do the inspections on those products for our customers out on the market place and make sure the equipment is up and running as it should be in the application.

MAX MEISTER: I don’t know how the situation is in the US, but do these inspections mainly do distributors for you at the end costumers or is a combination, or?

BRIAN SNOW: Yes, it is mostly distributors that would do that work today. You know we could go into an engine plant and we could go into a steel plant. And in some cases we would go into construction site where they have many different manufacturer’s types of equipment where they understand that they have a dozer or a digger but they don’t necessarily always understand the-., we always call it the „minuters“. The small items on those applications that tend to lead to failures. Whether it is a clocked filter, or a hose that might be abraded or twisted and might lead to premature failure of an application or a piece of equipment. Those are the things that ultimately fail and cause downtime as opposed to, you know, the quote on quote dozer. The dozer never really fails, it is something small (MAX MEISTER: Yeah, small parts.), its’ filter, it is something small that is causing the problem.

MAX MEISTER: Do you have many end customers that use products probably from all of your segments or from all the different parts of Parker or how is the situation?

BRIAN SNOW: Yes, so it is interesting. I mean, obviously we have many customers that may use a single line of product but we also have others that would use-. You know, Parker is broken down into six operating groups which is typically centered around products. We do have one group that is our aerospace group and that tends to be focused around the aerospace market and so all the products are geared towards aerospace. But you can imagine, again, a dozer or a piece of equipment, a hydraulic press where they would use filtration and cylinders and valve actuaters so all of the product comes into play when we are looking at services. It could be an accumulator where it needs to be recertified after a number of years to meet those industry standards that are in place today.

MAX MEISTER: When you have a customer that is using extra services around the product, how is he able to use or leverage the data you create with all the products?

BRIAN SNOW: Yes, good question. So if you think about a born on day, that’s one of the things that is maybe easiest to consider. So one product is born and it is shipped out of our factories we certainly record that data and we record it into a system we call the Parker Tracking System. We also would house different attributes around that particular product; maybe it could be a bill of material, it could be repair items. If that product were to be serviced out on the field we would record the service event in our Parker Tracking System, we would record the results of it and then we would know each and every time it was touched by a service technician. What the results of that inspection, what the results of that service were, if that item were ever to be replaced because it could no longer serve any application. We would then track the second item in that application so they would have two PTS IDs, or Parker Tracking System IDs associated with that application and we would know that one lived from point A to point B and then the new one picked up at point C and lived to point D. So life time, life cycle management, those sorts of pieces of information become available once you do that.

MAX MEISTER: I have a second question but probably another one I have to ask first. Can you describe how the Parker Tracking System is working in the whole supply chain?

BRIAN SNOW: Sure, so when Parker manufactures a product today a large amount of our data comes with our hose assemblies, again because, they are kind of a high wear item. They tend to be a very good candidate for traceability. We are beginning now to roll this out across our enterprise meaning all of our groups and divisions within Parker and that is an ongoing effort. We are getting more and more and more assets out in the world today. We have got about 35 million assets worldwide today that we track, so it is a pretty considerable data base. And we have been doing it for about ten years, so it is not new. And again, all of our factories would put in bill of material information around each asset, born on day. Where was it manufactured? Who assembled it? Were there any testing or certificates that were done specific to that item? Were there any general documents? You know it could be an assembly guide, it could be a user’s manual, we will attach those documents to that record and then when we ship them out to the factory. Then those digital documents just travel right along with those physical products, they get shipped out into the world. And we got several different forms of interface, it could be mobile device interface, it could be a computer interface that allows users to then access that data and use it for their applications and their businesses.

MAX MEISTER: So I think about some customers where we always have some issues with documenting the whole process so maybe there this could be an advantage? And I am quite sure when our listeners listen to the podcast then we are quite short before we also use Parker Tracking System. One other question is what additional services do you see for the end customers using Parker Tracking System?

BRIAN SNOW: Yes, I think that, I think-. You know, we have got several things that come into play in terms of inventory planning, because we now know how long things typically last in different applications, we can help them plan for maintenance events and we can also then tell them: “You know, if you’re going to do maintenance on a machine might have 75 or 100 different components.” We can then pull the entire bill of material and all the sub-components of that machine in advance of that work and we can make sure that from a supply chain standpoint we have all the products on hand, on site, very well organized and kitted ready to go. So that when that work happens, it is a very short duration of downtime for the customer. We have one example where we actually did an oil and gas rig, an offshore drilling rig and it had thousands of component parts that were on it. Once we have digitized and understood all of those items on the drill rig. The first time that was a lot of work. The second time we saw that application we were able to pre-make, pre-organize, pre-label and get all of that staged up on the key site so when this very intensive capital rig shows up on the key side and do the work, it is there for the most minimal amount of time as possible.

MAX MEISTER: Do you learn with customer and the items you need or do you really go on site with your partners?

BRIAN SNOW: It depends but we definitely find that most of our customers are worried about their equipment, cranes, top drives, punch presses, leads, whatever it is. They have limited knowledge around some of the individual components. And so what we will do is we will come on site with a distributor partner. We will help them best understand that equipment and all the sub-components that are required and then we will PTS tag those things that we can when they are in the application so that we are best prepared to do the maintenance when that time comes. So it is really a partnership.

MAX MEISTER: What combination do you see with Parker Tracking System and potential IOT or Internet of things applications?

BRIAN SNOW: Yes, that is a good question. I kind of view Parker Tracking System as the VIN plate, right? A lot of times I will use automobile examples and analogies. So each of our cars has a VIN plate that attaches all the physical meta data about the asset. That is essentially PTS. IOT is all of the condition based things that are happening in that particular product or in that application. Because of the way we have structured PTS and because we have planned for service events and inspections we can take triggers or signals from IOT devices and we can feed those into a system that will then trigger an inspection event. You know maybe it’s out of sequence of a standard planned event, so if we said: “Hey, we want to inspect this item in six months.”, based on just time, we could then automate that plan based on an IOT signal that says: “Hey, this is operating out of condition or out of norm, we should inspect sooner.”, right? And then IOT kind of becomes an override to a standard calendar or days planning event.

MAX MEISTER: Okay, but, until today you have different systems so you have the IOT world and the PTS world, (BRIAN SNOW: Correct.) and it’s not in one system combined?

BRIAN SNOW: That is correct however each IOT device carries with it a PTS ID, so every IOT instance, every IOT smart sensor is PTS ID’ed so that we know and we can understand this item that is a Parker item. In the future coming those signals will then get passed back into a PTS system to take action.

MAX MEISTER: Okay. So for us or for how I see a supply chain would be very interesting to use this data also in combination with probably stock levels of distribution in the area where the customer is working to really, to guarantee that he has enough supply.

BRIAN SNOW: Yeah. For sure. For sure.

MAX MEISTER: Okay. Yes, interesting topic. Another thing, you are now working for more than 20 years for Parker.

BRIAN SNOW: 23 years. It is amazing how quickly it goes.

MAX MEISTER: Perfect. And what do you think is the biggest success of Parker until today?

BRIAN SNOW: You know, I think-, I definitely think that the breath of product line that we have allows us to get into many applications and that is certainly something that we, you know, we are very proud of. The other pieces is the distributor channel, we have an immense amount of physical footprint with our channel partners, or distributor partners and that, again, allows us to leverage that breath of product line to get it globalized out in market place. And so when costumers move from one country to another or they add an additional facility or plant, they can be rest assured that there is going to be a Parker representation there to help them just like they had in their home country or in their home location. So we have got lots of customers adding facilities, you know it could be in the same country, just in a different state or different city but they find that there is a Parker representative, Parker distributor that will help nonetheless.

MAX MEISTER: Not far away usually?

BRIAN SNOW: Exactly.

MAX MEISTER: So you are situated now in Cleveland. You always stayed there or where are you from?

BRIAN SNOW: I actually started with our Tube Fittings Division in Columbus, Ohio which is not too far from Cleveland and then I spent a bit of time with Parker in Seattle, Washington in the US. I was calling on one of our direct original customers and then for about the last 15 years I have been back in Cleveland.

MAX MEISTER: This is also the place where we met. (BRIAN SNOW: Yes.) And, yeah. So probably one of the last questions. I have seen that on LinkedIn you’re interested in analytics and growth tactics in this area. What are the biggest learnings for you in your daily life?

BRIAN SNOW: Yes I think that we are continuing to get better and better at this. We are looking for areas where we have voids in the map, in the physical map. So where are replacements of our products taking place and where are they not? Where do we have good coverage and maybe where do we not have good coverage? Or where do we have partners that are taking advantage of the technologies that we have to offer and where could we go spend more time and help close in those holes in the map, if you will. Again, one of the things with the Parker Tracking System that we like so well, is when things leave our factory and they get replaced by our distributor channel partners in the world, we can see how long they lived, we can see where they travel, right? Where did they get replaced first versus where did they initially get shipped for a factory first fit application on a newer piece of equipment, so it is very interesting data that comes around, just being able to track and trace those events.

MAX MEISTER: There pop up two questions in my mind. So the first one for me, and I am quite sure you don’t know the data at the moment, but it would be quite funny to see how many items from Parker are probably produced in the US, (Background noise) sorry, produced in the US and then shipped to Germany. Then there are machines build and they go back to the US.

BRIAN SNOW: Yes that is exactly, the thinking is exactly spot on. Right? I don’t know that I could tell you about what such an information looks like but it is for sure something that we are interested in as well.

MAX MEISTER: Okay. And the second one is: I have been to a distributor also in the US for Parker and when they showed the map of their development of the branches then you can see the interstate roots. And he was mainly following the interstates of one state. Do you see a trend that this is still important or is it changing?

BRIAN SNOW: To follow the interstates?

MAX MEISTER: To really try to increase the regional footprint of distributors in today’s world?

BRIAN SNOW: Yes, I definitely think that there is an optimal density of distribution, right? You want enough to cover the geographical space and that changes based on a city, right? Or a rural area. In a city you might be able to cover an area that is much, much smaller because of travel time. So you might have to have more locations. Where in a rural area people may be more accustomed to having to travel a little further distance but because there is less traffic it doesn’t take as long. And so there is an optimal sort of footprint, I think in some parts of the world we’re definitely in a much better position in terms of coverage than in others. We sort of go east and Asia we’ve got more open areas for us to continue to grow. In places like the US where it’s a very mature area, there is certainly less opportunity for us to put new pins on the map, as I like to say.

MAX MEISTER: And do you have the feeling that even in the US it is important for the end customer to have branches close by?

BRIAN SNOW: I do. I think that the-. You know, we are in an interesting time where you can buy many things on the internet. And I think about my own personal life and how much transactions that I make online today and it is staggering compared to even just a couple of years ago. So certainly those things are going to influence our business and they are going to impact us but many of the applications that our customers have and our distributor channel partners work in, do require a bit of technical expertise and I don’t believe that’s that quite there yet in some of the online supply. Certainly you think number and you can probably get it shipped, but really getting some of that deep technical knowledge and assistance that you would get from a distributor I think is still very, very required today and I think having our physical footprint where it is today is wonderful for our customers, I think they lean on that pretty heavily today.

MAX MEISTER: Okay, yes this is music to my ears. So I hope this continues that way. One last question and my listeners are used to it. What was your last heroic deed?

BRIAN SNOW: So that is a very good question. I guess I would probably have to say, it is probably a two part answer. My oldest daughter, she just turned 18. We sent her off to college, off to university, so that was a very difficult event, just kind of letting her leave the nest. But probably my heroicness of that was comforting my wife as she let go of our oldest daughter. (Laughter)

MAX MEISTER: Yes, I can imagine this would have been the same with me. (BRIAN SNOW: A little bit of consoling.) I maybe have seven more years but this will be also difficult for me.

BRIAN SNOW: Yes, it’s difficult.

MAX MEISTER: Okay, Brian, so thank you very much for the short talk. It was very nice having you. Thank you. (BRIAN SNOW: Thank you man!) I hope to see you soon. Thanks.  

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