Writer: Eric Bearing Limited
SKF’s external analysis in brief
Demand for bearings is falling due to electrification in general within industrial production, (e.g. the automotive sector, where it is estimated that there are 70% fewer bearings in an electric car).
New digital sales channels are changing the market logic. SKF already sells bearings through Amazon. The challenge is to make sure the customer chooses SKF products rather than just choosing those with the lowest price. Global competition, especially from suppliers in China, is adding to the price pressure on bearings
SKF’s strategy in brief
SKF sells ‘performance’ rather than ‘products’. Machines are equipped with sensors which collect information on how they behave, perform and fail, (e.g. temperature, friction, wear, speed – a little like an ECG works on people). It is important to package the information generated and make it into a basis for an enriched value-added customer offer.
“This is a service that guarantees mechanical performance at a fixed price”, says Larsson. “If performance improves, we want a share of the increased profitability, and vice versa if performance declines.”
This development is in its infancy, but at a number of pulp mills, especially in Latin America, where interruptions in delivery are devastating and access to capital is sometimes scarce, there are already customers leasing equipment through performance-based contracts.
Fredrik Larsson’s main role is to develop new concepts and establish partnerships in the ecosystems that are emerging in manufacturing as a result of digitalization. “I work with establishing partnerships” he says. “Automation companies will be the platform, but we are in partnerships where we deliver services in the ecosystems together with others”. SKF 6311 2RSJEM bearings online , pls click here :
Who should be the hub of an ecosystem?
“That depends on the customer. Small and medium-sized customers can benefit from SKF’s own cloud services system, but the manufacturing sector already has an IT platform into which we need to be able to integrate our offer.”
SKF’s strategy has been to build its own “industrial cloud”, based on Amazon Web Services, which exchanges information with other clouds, i.e. cloud to cloud.
For the process sector, SKF is probably not the hub for the end customer. It’s more likely to be classic automation companies such as Honeywell, Siemens, ABB and Rockwell; companies who traditionally supply automation systems to manufacturing. The smart, sensor-coated ball bearings/machines will be a crucial part of these ecosystems. For SKF, it will be a matter of coming up with new offers and packages.