The Inside Track

this month we’re looking at IoT operations from a different perspective. We chatted with Dean Brown, from the Australian one-stop solution provider Kingloc, about the challenges it has seen and taken on in benefiting from IoT:

 

Dean, thank you so much for giving up your time today to talk to The Inside Track readers. Firstly, please just introduce yourself by telling us a little about Kingloc the company and about your own role within it.

Kingloc is a wholly owned and operated Australian company, established in 1982. We are a medium-sized company with just over 100 direct employees, and we support a number of contractors outside our main centers around Australia. Within our segment of the industry, Kingloc is the largest provider of specialized refrigeration services covering the greatest geographical footprint across Australia. To put this into perspective, our landmass is around two and a half times the size of India and has just 25 million people. We cover our customers’ equipment placements right across this great land. 
 

Kingloc provides cooler and freezer sales, rentals, warehousing, repairs and maintenance, and distribution across our customer base of large global ice cream, dairy, alcohol, and non-alcoholic beverage brands.
 

My role within the company covers commercial arrangements with our customers together with some sales, innovation, environment and review of performance cost and metrics for our customers to ensure we can continuously add value and lower their costs.
Kingloc, in summary, is unique in the industry having all processes totally integrated within our facilities across Australia.

Thank you, Dean. One would imagine that the landmass involved in covering your customers might make connectivity very important to you and them. Considering the landscape in Australia, how important a topic do you see connectivity as being to your customers, the asset owners? 

(laughing), There’s probably about five different answers to that, but looking at it from our perspective, we see connectivity as the future of helping our customers operate their assets and engage their customers in different ways. We believe the companies already heading in this direction will be the benefactors by taking the lead position in the market. 
 

Some global companies, as I think I’ve already mentioned, are already well on their way in accumulating connected assets, yet I do see a lot of organizations with mixed views of what it is they want to do. For them the cost of entry is the other bit they seem to be hung up on in a lot of ways.
 

Connectivity provides a greater level of communication to increase efficiencies and lower costs, especially as we do have to travel long distances on average compared to other parts of the world to service or do what we need to do with the equipment. This is in relation to our provided services, so additional benefits will come to our customers connecting through this and their systems to their customers. 
 

We see very clearly that once assets are connected with our support and through our systems, that they can then obviously connect through to all of the areas that I see some of the more progressive companies looking at.

Understood, so let’s look at those customers that you see accumulating connected assets. Now you have new technology and new data available to you which can help your customers run even more efficient operations…does that mean there is now a new way of working at Kingloc?

The answer is yes. For many years we have developed our integrated systems, and I keep stressing integrated systems because we do several key things for our customers. A lot of companies may just do servicing, or they may have separate warehousing or separate transport arrangements. We integrate all of those processes and we and our customers see the efficiencies of that integration.
 

That’s what differentiates us in the market. We believe that we are actively communicating our intentions to adopt a new way of operating. So to answer your question, we see it as about what it’s going to do to our organization; we will change processes and systems. These are areas we are looking at all the time, because we have so many customers with so many different needs. We are always changing the way we do things with our customers, just to suit very specific areas within the way they serve their own customers.

Ok, so you are constantly looking to change and evolve. You have a dynamic organizational setup. With these new ways of working, I expect there were probably new skill sets or resources that you needed to put within Kingloc to leverage those potential improvements. Did that involve changes to the organization? Or were you able to adapt from within?

I think I touched previously on processes and as we evolve, what we currently do is change processes quite regularly. In this case, what we will be looking to do is to really move from a reactive environment to a proactive action environment. That will be the fundamental change within the service end of our business once we are fully connected.

Ok. I know that’s a very hot topic within the service industry, the concept of preventative maintenance. I’m keen to get an idea from you as to what extent you can actually deliver preventative maintenance with technology as it is today. There is obviously a utopia where everyone can predict everything that’s going to go wrong, but where is that capability right now, what stage has it reached?

Preventative maintenance within the current parameters of what we work within is not an easy one, because there is still a fair bit of guesswork. I do a lot of work around analytics and suggesting to customers that if we go down this track, we will be able to prevent further issues downstream. But it means that they have to pay money NOW in order to do that, not knowing what they will get later on. That’s the hard part of those metrics, as it’s like this: there’s bank of money right now to do something, but I can’t give them a definitive understanding of what they will save further down the track. It will only be when they actually get down that track that I can say “see, I told you that you were going to spend 25% less in this area”, so it can be hard for them to commit that money up front.

Considering the bottlers’ reluctance to pay the money up front for something that they cannot see yet, do you see ways in which commercial models will adapt to ensure that these preventative measures can be delivered to the benefit of all?

Yes – just look at some of the key areas that do go wrong… for example, overheating can lead back to blocked condensers or to people leaving doors open. There could be a whole raft of issues that, if you’ve got information coming at you all the time, you are actually stopping them before it gets to a point where you need to send somebody out.

 

Then the other side of the coin is that by preventative measures you are trying to predict before it gets to that blocked stage in the first place. So, by having that instantaneous information coming at you all the time you are then able to, remotely, at least eliminate several factors in determining whether you actually need to go there and do something. That in itself is going to contribute to some of those decisions around preventative maintenance.

Indeed, and that leads us on to another related question. Do you foresee a future where your entire operation is data-driven? For example, I know that with many operational set-ups there are a lot of routine visits, but it strikes me that there must be inefficiencies within that. Do you see a future where data drives the entire visit routine?

 

Yes, I believe so. The interesting thing is that in our case, we deal with a wide range of customers. Therefore, we may visit an outlet where there are several customers with assets in that outlet. Even though we may have been called out for a cooler or a freezer that has gone down we’ve got the ability to run our eyes across a number of different assets at the one time. It depends on which organizations you are talking to, but some organizations have their own in-house service teams, and they are only going in to look at their own assets.

Ok, let’s put the crystal ball down for a second and ask about the present day. There are lots of lessons being recounted by bottlers and service companies from when they first deployed connected assets. What types of deployment challenges has Kingloc faced that you didn’t expect to? What would you advise others to look out for if they are looking to start investing in connectivity programs?

 

My advice to any company looking to implement connectivity is to really review the different styles of connectivity, for example Bluetooth versus always-on. From my learnings and findings, different countries will have different means of transferring information. In some places it may be cheaper to do it one way versus another. So, you have to clearly investigate those areas, and obviously with companies like assets365 you guys go down that track and assist with how that information is moved. These are the areas where companies are making future decisions, so it’s really important for companies, even us, to be able to go to their customers and say this is how much it will cost you for hardware, for data transfer and at the end of that transfer there will be another level of how you analyze the data and there is a cost of doing that too. 
 

It’s putting all of those pieces together that I would say they need to really focus on. I think with connectivity it’s really a matter of companies understanding what the end game is and really connecting that back to the asset through either their own systems or through a third party, like Kingloc. To me it is still early days for connectivity. and I think companies have a long way to go in terms of how they really and truly connect it up fully from one end to the other ensuring that it all flows correctly through all systems.

Yes, I am sure everyone would agree with you there and your point about making the best possible decision right at the start is important, because once you have organized an operation around one form of connectivity it can be pretty difficult to change it to work around another.

Yes, and my experience so far is that some people are set well on their way and their way may mean that they still have a long way to go on how they think they need to get it going from one end to the other. Whilst other companies really need to drive, from the top, implementing connectivity in their businesses.

Thus far, we’ve talked about how you see connectivity benefitting your own customers and your part in bringing that benefit to them. Can we consider, for a moment, the benefits that connectivity can bring to Kingloc itself. We touched on this very briefly earlier, but do you see connectivity bringing benefits to your own company’s efficiency and margins? 

Yes - connecting our systems into theirs, in terms of reporting how assets are dealt with. Obviously, connectivity and the development of the software packages will allow that to go much further, but we see that by aligning more and more with our customers in this way, we’ll enjoy efficiency gains. 
 

Our customers, we expect, will look at the asset in a different way because currently they value an asset based on a set of metrics that relates to how it runs and what it costs them to do what they do to keep things cold or frozen. Whereas, once you’ve added in that extra part which is about all of the sales information that they can use to engage with their customers further, the asset will be valued in a different way. Each asset will carry a greater value, and this is the exciting thing for us, because it means that they will put more care into the assets they are putting out there, they will probably put more assets out there and they will also value how their assets run – because they have to keep them running. They will be more willing to make sure, from a value perspective, that they are able to extract all of that critical data.
 

So, from our perspective, the more that this happens, the more opportunities open up for us. We can see that with connectivity we will be able to do things without the ‘interim actions’ that customers are paying for separately. We believe that with full connectivity they won’t have to take and pay for these activities separately.

I’m going to ask you a tough question, which we have been asked too. If you have such a strong belief in the benefits of connectivity and considering that Kingloc is a company that is right at the heart of ensuring the ROI of an asset for its customers, is connectivity something that Kingloc might consider investing in itself, rather than expecting the customer to make that initial investment…so that you can then drive the commercial model for the customer?

The answer is yes, and we already have our own assets in the field, we do rentals for example. We offer this style of package to customers if they don’t want to acquire their own assets. Within that package we have already taken that decision that we will be fully connected. This also allows us to develop the list of communications that we need to provide customers with to demonstrate the benefits.

Great, thanks Dean. One final question for you please, and it’s really about the approach to adopting innovation within Kingloc. Clearly you are a business that is looking forward from both your customers’ perspective and of course your own too. You are running a business which traditionally operates on relatively thin margins, so how do you balance to need to introduce innovation in your business whilst staying on top of driving your core business?

That’s a good question. We are constantly asked by customers, as part of our commercial arrangements, to supply them with innovative solutions. We have therefore gone out and examined what is already available in the market, offshore and with other manufacturers. Another aspect is, because of the many, many processes we have in our business, we are constantly innovating, but in very small ways. It’s just changing or tweaking how we might take orders, or how we might communicate to the customers’ representatives. 
 

We have done a number of things that we believe are innovative within our market and we make and install our own innovative elements into the equipment that other people in the same markets have not been able to develop. We’ve done that with one eye on the cost and we’ve been able to do that in way in which both the customer and we profit from the benefits.
 

At the end of the day, we are selling either fridges or freezers. They have been around for a long time, you can make them look pretty, but it’s about how you make that box function more efficiently or improve its performance. In our business we have all these additional actions and activities around it. We can talk about how we can be more innovative for our customers, but it’s also about their customers that call us every day for service. 
 

We build, store, distribute and service assets. There are so many different processes within that, which is why I said we have a lot of little innovations that streamline and improve all those processes.

 

Thank you so much Dean, it’s been great speaking to you and learning more about you and Kingloc, thank you for your time!