Saving Cost on After-Sales Service - An Indirect Profit Stream

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Saving Cost on After-Sales Service - An Indirect Profit Stream
Posted on: Jul 28, 2010

In a scenario where fierce market competition and rising challenges have made the market volatile, winning customer trust has become more important than ever. Talking about the manufacturing companies, effective after-sales is the law of business. According to a survey conducted by PRTM, the leader in Global Supply Chain Management and Customer Value Management, the manufacturing companies that pay attention to managing their after-sales enjoy customer service and operational cost advantages over average performing companies. Their report is backed by the following stats:

Companies that focus on after-sales experience 75 percent lower inventory per dollar of installed base
Companies that streamline their post-sales processes enjoy 15 percent higher fill rates
Companies that manage their service and repair functions benefits from 15 percent more on-time service-parts delivery

Controlling inventory and spare parts with diversified manufacturing units and its regional & central warehouses, often becomes one of the measures in yielding returns. This is because after-sales business processes stock maintenance; repair management and account management are often managed by sales team, product line management and repair centers and not by the OEMs alone. This requires an end-to-end visibility to cover its service costs and exceed the revenue. The driving issue of underperformance in after-sales management is that these entities do not have an automated way to see sales performance at every echelon.

A handset manufacturer for example, looses focus on the after-sales, while devoting all its energies on the manufacturing and handset quality. The entire focus is on manufacturing & sales and is not able to view trends on whether warehouse manager dispatches the stock on time, if service centers are over budgeting the spare parts inventory and the like. This hinders the repair process and increases turn-around-time (TAT) needed to support warranty obligations and to minimize excess and obsolete service-part write-offs. This is a dual loss as the revenues price skyrockets and the end-customer is frustrated with the delayed services.

As long as the process is manual and masked in the veil of excel sheets and email notifications, the efficiency level is tend to decline, revenue streams deteriorate and TAT increases. The solution lies in a robust, automated Service Management System that offers real-time updates on the after-sales processes.

When you get real-time updates, you are able to view and review business performance, parts movement, and thereby also get the ability to take decisions that work in the favor of the efficient after-sales mechanism.

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