BEFORE — Sell the engine, profit from spares

@thedataandaiguy

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Promoted product

Rolls-Royce TotalCare

Why it worked

The video explains a complex business model ('servitization') using clear diagrams and relatable examples (Otis, Michelin), making it educational and engaging. The contrast between the traditional and modern approach highlights the innovation and benefits of the TotalCare program.

Summary

The video explains Rolls-Royce's TotalCare program, where they rent jet engines to airlines and are paid per flight hour. This model incentivizes reliability and proactive maintenance, contrasting with the traditional model of selling engines and profiting from spare parts.

Structure

1Traditional model: Sell engine, profit from spares.
2Rolls-Royce's TotalCare: Rent engines, paid per flight hour.
3Sensors stream data for real-time monitoring and predictive maintenance.
4This 'servitization' model incentivizes reliability.
5

Original caption

Rolls-Royce rents its jet engines by the flight hour, not by the unit. Each Trent engine carries around 100 sensors streaming data to their Aircraft Availability Centre in Derby. The model is called TotalCare, and it's a textbook case of servitization. #techtok #hereswhatyouneedtoknow #rollsroyce #servitization #LearnOnTikTok

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Product placement

Rolls-Royce TotalCare is the central subject of the video, explained through diagrams and narration. The video contrasts the traditional model of selling engines with Rolls-Royce's 'Power by the Hour' and 'TotalCare' service model, where they own the engines and are paid per flight hour, incentivizing reliability.

On-screen text

BEFORE — Sell the engine, profit from spares Engine maker one-time sale of jet engine Airline (owns the engine) engine wears out, breaks more breakage = more revenue Spare parts + repair shop $$$ ↑ HOW — TotalCare (Power by the Hour, since 1962 / 2002) ~100 sensors per engine vibration, temperature, pressure, fuel flow Trent jet engine on aircraft Rolls-Royce still OWNS the engine Airline pays PER FLIGHT HOUR live telemetry in flight satellite + ground link Aircraft Availability Centre — Derby, England Real-time fleet monitoring Engineers on watch 24/7 predictive maintenance + part swaps $/hr THE PAYOFF — Servitization Sell the product wants breakage → spare parts $$ Sell the uptime wants reliability → fewer failures ~100 sensors per engine PAID PER FLIGHT HOUR Same playbook Royce - engines Otis - elevators Michelin - tires

Transcript

When an airline buys a Rolls-Royce engine, they actually don't own the engines. They rent them by the flight hour. And every one of these engines is stuffed with sensors that quietly stream data back to a room in England while the plane is in the air. The program started in the 1960s. Rolls-Royce called it Power by the Hour. Then in 2002, it got a bigger version called TotalCare. And Rolls-Royce keeps the engine, they own it, and then they handle all the maintenance, they replace the parts, and they get paid per flight hour. So each Trent engine has around 100 sensors per engine that measure things like vibration, temperature, pressure, fuel flow. And that data then gets sent back to the Rolls-Royce Aircraft Availability Centre in Derby, where engineers watch the fleet in real time. THE PAYOFF — Servitization. Sell the product, wants breakage, spare parts. Sell the uptime, wants reliability, fewer failures. ~100 sensors per engine, paid per flight hour. Same playbook. Rolls-Royce - engines. Otis - elevators. Michelin - tires. You own the thing, and then you invest in the reliability. This business model change actually forced the sensor investment, which was decades before anyone ever said Internet of Things. It's servitization. Otis does this with elevators too, Michelin does it with tires. You own the thing, and then you invest in the reliability.