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Düsseldorf, December 02, 2021

Performance improvements with digitally integrated lifecycle services and performance-based subscription models

Our business models for integrated solutions and new value propositions

With new performance-based subscription business models SMS group bundles it’s know-how from automation, digitalization technical services and equipment along the whole metallurgical process chain in digital integrated solutions. These business models offer unique performance improvements as well as extended guarantees and full costs control. To create customized solutions, we conduct intense consultings together with our customers following a transparent approach.

Steel producers around the world see themselves confronted with constantly rising product requirements, higher quality demands and increasing environmental requirements. In addition, they must flexibly adapt their production program to market fluctuations and constantly increase their process efficiency. To face those challenges, it takes technology. By harnessing the power of Industrial IoT, companies can achieve increased business outcomes. Thereby focus shifts away from only looking at the equipment to considering the entire process and its performance. By bundling automation, digitalization, technical services and over 150 years of metallurgical knowhow into integrated solutions for the entire metallurgical production chain, our customers can benefit from reliable data and insights which are converted into actionable items and direct operator guidance. To enforce a long term focus on the whole equipment lifecycle, these integrated solutions can be offered as innovative performance-based subscription models. For our customers this results in increased plant performance and performance guarantees while at the same time having full cost control and increased flexibility compared to regular one-off sales.

Tailormade solutions based on a transparent approach

To compose solutions that fully meet our customers demand, we follow a transparent three-step approach. At first, starting from our customers process, we identify critical assets and determine the individual project scope. Secondly, based on the respective customer needs we recommend solution packages consisting of all of SMS groups competences including automation, digitalization, and technical services. In a third and final step, the ideal business model is selected with all its commercial specifics such as guarantees, contract model, payment model and financing.

In the first step, we investigate together with our customer what improvement potentials can be realized for a defined process scope. ­To do so we run a joint consulting and data analysis to identify and quantify performance and cost saving potentials. Based on the results of that consulting we derive customized service bundles. These can vary our offerings from standard equipment packages over service packages, which additionally contain digitalization and consulting solutions up to integrated lifecycle packages. Here we invest the full scope of SMS groups solutions portfolio merging the respective equipment with automation and digitalization and our full-service portfolio. Based on the envisioned level of guarantees and performance improvements SMS overtakes data-driven optimizations and maintenance activities so our customers can focus on their core competences and business.

Business models: Performance-based contracts and Software/Equipment-as-a-Service

Subsequently, the most suitable business model with all its commercial specifics such as guarantees, contract model, payment model and financing is selected in the third project phase. SMS group offers a broad variety of solutions which can easily be contracted in performance-based business models. 

Software-as-a-Service

The Cracks Preventer by SMS digital is a software solution which is applied to predict and avoid longitudinal cracks and other failures occurring at casting processes. It provides countermeasure for operators, effectively contributing to a reduction on downgrading and scrap. With the Software-as-a-Service business model software improvements can be applied continuously.  

Measurements-as-a-Service

ThreadView is an autonomous measuring system for OCTG threads and sealing lips. ThreadView supports customers with quality assurance and is fully integrated in the thread cutting line. The process allows for measuring, evaluating and documenting pipe ends following the cutting process. Thereby, ThreadView operates fully autonomously measuring 100 percent of the cut threads. In this way, inaccuracies, defective tools and tube ovalities are detected within a very short period of time and the productivity of the finishing line is steadily increased. The Measurements-as-a-Service contract ensures the reliable and accurate operation of the system over the full equipment lifecycle.

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The Cracks preventer uses a machine learning model to prevent cracks and an example for a Software-as-a-service.
ThreadView ThreadView ThreadView
ThreadView is an autonomous optical online measuring system for threads offered as Measurement-as-a-service.

Component-as-a-Service

Malfunctions in the downcoiler section can have significant impact on product quality and cause cobbles, which can cause unplanned downtimes. To increase the overall availability of downcoiler systems and the lifetime of its core components, SMS group offers remote service and support, spare part logistics and regular field inspections in a pay-per-coiled-ton business model. With this Component-as-a-Service business model the performance of the whole downcoiler area can be significantly improved and guaranteed.

Equipment-as-a-Service

Beyond software or components, SMS group also offers entire machinery in performance-based business models. For instance, high-technology ring-rolling machines can be bundled with full-service packages consisting of regular field inspections, remote services and spart part logistics. Additionally, consulting services and cutting-edge digital tools are applied. That way, we not only ensure improved technological possibilities and a short ramp-up but also effectively contribute to saving operational costs and increase plant performance. All of the above-mentioned solutions are bundled in an Equipment-as-a-Service contract to offer maximum performance and maximum flexibility through pay-per-use Opex-based payment models.

Downcoiler Downcoiler Downcoiler
Downcoiler as Component-as-a-service for performance optimization of core components (e.g. mandrel, reel).
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Equipment-as-a-service for forging solutions with full digital service and consulting packages.

The combination of our integrated approach of merging equipment with automation, digitalization, and respective servicing together with innovative business models offers our customers the potential to benefit from a close collaboration with SMS group. These solutions strive for optimization of operational processes, maintenance, and increased performance in terms of dedicated value drivers, such as availability, quality, cost reduction, and increasing sustainability. Bundled with innovative performance-based business models our customers benefit from assured performance values while at the same time having full cost control and more flexibility.