The Transformative Journey Toward Machine as a Service (MaaS)
A conversation with Edward Garibian, CEO of Llumin in Springfield, MA
Interviewer: Ed, before I ask you a few questions about the transformative journey that many manufacturers are going through as they embrace MaaS, can you tell us what MaaS is and give us a brief history of MaaS?
Ed Garibian: Yes, I’ve watched MaaS develop over the past 20 years and become a hot topic in the last decade. In terms of what MaaS is, it’s a business operating model that involves equipment manufacturers selling machinery to end-user manufacturers on a subscription basis. But it doesn’t stop there. As with every transformative change, there’s a digital component to this paradigm shift. That is, to support this business operating model, end-user manufacturers have to embrace the IIoT (Industrial Internet of Things) connectivity. More on that later. In terms of the history of MaaS, as with all transformative change, MaaS had its genesis in necessity. Purchasing equipment has always been expensive, as is the maintenance on that equipment. Additionally, the historical alternatives to purchasing equipment – leasing or outsourcing – have drawbacks that can be avoided by adopting MaaS. MaaS gives end-user manufacturers an alternative to leasing or outsourcing.
Interviewer: Let’s keep exploring the benefits of MaaS to the end-user manufacturer. If you were to rank the top three benefits, what would those be?
Ed Garibian: First is the elimination of the capital equipment purchase and all that brings, meaning using existing capital or obtaining a loan, then the years of complex depreciation entries. This all takes place regardless of whether the equipment is used a few hours or continuously. All of that is eliminated when end-user manufacturers utilize equipment on a subscription basis. Second, the cost of maintaining the equipment should be less under a MaaS model. Absent MaaS, each end-user manufacturer has to either pay a talented equipment maintenance technician on payroll, or hire a maintenance company. With the MaaS model, the equipment manufacturer is responsible for maintenance. They can spread highly-talented and focused technicians who have expertise on the equipment across many end-user manufacturers. It’s a home run for everyone involved. Third, there is optimization involved with MaaS. Since the equipment manufacturer is connected continuously to the equipment in use, they can optimize the system for productivity. They can also optimize the equipment for longevity. Again, both sides win.
Interviewer: Are there benefits to the equipment manufacturer and seller?
Ed Garibian: Yes, the primary benefit to the equipment manufacturer is the elimination of having to make that big sale. That big hurdle has been eliminated by MaaS. This makes that piece equipment obtainable to more end user manufacturers. It also evens out the equipment manufacturer’s income stream. An additional benefit is the constant connectivity. How better to expand knowledge about the piece of equipment than to be connected to it 24/7? This enhances R&D efforts and it helps extend the life of the equipment. Longer life equals more income. It’s all about getting the most out of the asset.
Interviewer: You promised we’d get back to the digital connectivity of MaaS. What are the key issues?
Ed Garibian: MaaS likely doesn’t exist without the Industrial Internet of Things (IIoT), or it exists in a less advantageous manner. IIoT enables the type of data-gathering that we could only imagine years ago. Data gathered can involve equipment status, equipment conditions, and energy usage. The concept isn’t new, but the concept became reality as connectivity and bandwidth expanded, the sophistication of sensor technology increased, and the software tools that could analyze the collected data matured. This is all about collecting and analyzing ‘big data’ real time to optimize business decisions.
Interviewer: How does this relate to what Llumin does?
Ed Garibian: Our talented engineers have been committed to saving manufacturers time, resources, and capital for over a decade. We are laser-focused on minimizing machine, production, and operations down time and reducing risk – and it’s all we do. We strategize with our customers to help them evolve. Their success is our success.
Interviewer: Any parting thoughts?
Ed Garibian: The move toward MaaS is definitely a transformative journey and manufacturers are rising to the occasion. I’d love to connect with manufacturers who are interested in this, regardless of what stage of the journey they’re in.