by Ron Iversen, VP Market Intelligence, Virtulytix
Most, if not all of us, in the imaging industry realize that our industry is declining and will continue to decline. Realizing that their printer revenue, margins, and operating profits will be shrinking, printer manufacturers and resellers are looking at ways to reduce costs and to improve efficiency but doing so without sacrificing customer service. For years, as a way to prevent hardware margins from declining faster as average sales prices have declined, printer manufacturers have focused on reducing manufacturing costs to the point where there is little more that can be done on the cost side.
In an MPS contractual environment, there is much more focus on the total printing costs (as opposed to transactional environments) where the actual printer hardware cost is just portion of the total cost since supplies and maintenance are much higher contributors to total printing costs. According to one first tier printer manufacturer, maintenance and support can account for as much as 60% of the total printing costs for A3 copier/MFP class products!
Up until recently, printer maintenance has consisted primarily of a combination of preventative and corrective service. Preventative maintenance includes performing routine maintenance to avoid having a major and costly failure, while corrective service is performed after a failure has occurred, both of which are very costly. Condition based maintenance takes it a bit further by continuously monitoring the condition of a device (such as print quality on a printer) which provides some level of awareness that a service call will be needed but typically does not specify the specific component that is expected to fail. Predictive Maintenance takes it even further whereby failures can be predicted with high accuracy (dependent on the quality of data going into the predictive model) such that one could predict when a specific part in a specific printer is going fail before it fails. Predictive Maintenance offers tremendous opportunities to reduce overall maintenance costs to as much as 20-25% including reduction of service calls, optimizing service call routing, reduction in parts inventory etc. In print for pay environments, aside from the significant cost savings, there is the added benefit of reducing downtime resulting in incremental revenue. The expected cost reductions and potential incremental revenue are what has attracted printer manufacturers including HP, Xerox, Ricoh, Canon Konica Minolta, and others to make investments in Predictive Analytics.
About 3 years ago, Virtulytix decided to make a huge investment in licensing the IBM PMQ (Predictive Maintenance and Quality) tool set. Since then, as a premier IBM partner, Virtulytix has been developing predictive analytics solutions for many companies within and outside the imaging industry. SuppliesIQ uses multiple predictive, time series algorithms to determine when toner cartridges should really be replaced. Virtulytix has found that at least 15% of residual toner remains in the cartridge when it is replaced, but by using SuppliesIQ, residual toner levels can be less than 5%. Many of the same companies who are considering licensing SuppliesIQ, are also interested in ServiceIQ since both share the benefit of significantly reducing costs, especially in an MPS environment. Virtulytix will continue to develop ServiceIQ this year, and we look forward to delivering added value and cost savings to our industry.