Knowledge about the location, user or a service anywhere - anytime, this is service mobility for an efficient aftermarket services management.
There are a number of organizations involved in field service trying to boost the efficiency of their workforce and reduce the costs of operations. The only way to do this is to manage the process in a better way. Service mobility applications can enhance aftmarket service operations significantly by providing you with more support including service lifecycle management.
Aftermarket consulting specialists can provide your business with a better understanding of service lifecycle management so that you can begin choosing better service supply chain solutions to help you save money. This includes looking at all of your service opportunities as a lifecycle as opposed to a single series of events. By combining all operations together, you can improve upon your costs in a more effective manner.
Service mobility has become so significant, that the IQPC has a Conference in the Middle East purely dedicated to discussing topics that revolve around how post sales service/support can be enhanced by different solutions. The conference has established that thousands of organizations around the Middle East are spending significant dollars towards scheduling, dispatching, tracking and data management simply because it is the best way to improve business.
There is a lot of service mobility technology that makes it easier to do all of the scheduling, dispatching and overall management by streamlining the process out in the field. By having mobile computing solutions in the field, it is possible to know where all workers are at any given time. This provides more methodical dispatching that can actually make call times faster and reduce fuel costs and improve the customer experinece.
Faster Service
Using GPS applications, customers receive services faster too. Installed on mobile phones, tablets and in various other products these applications can:
- make it easier for the employees to get the information
- management and customer service to know tracking details
- inform customers when the service will arrive to them
More Efficiency
By creating better workflows, your company can actually begin to experience more efficiency in the way in which work is being done out in the field. This makes contract management:
- more effective & productive
- helps minimize returns & improve repair center cycle time
- improves inventory turns and spare parts planning
Service mobility can facilitate a better management process. Post sales service/support may be a profit center, but it can also be a better way to offer customers or clients a way to get what they need, reducing the number of returns and repairs. Service lifecycle management improves significantly by getting to the root of the problem and offering technology to help with the logistics.
Throughout the consulting of after sales services, your company needs to understand what the desired behavior of your customers and clients. This means that if you want your customers to avoid experiencing delays to identify a problem, then aftermarket services needs a plan to deliver product support is readily available to them. By sourcing customers and clients to take part in the process, it can actually eliminate a number of problems in your plan and implementation strategies.
The service mobility technology that is available will provide effective ways for consumers to take advantage of the aftermarket services offered to them. More importantly, it can help streamline the service supply chain workflow so that the information that is critical to the success of the organization is getting into everyone’s hands sooner that will ultimately reduce costs.
More and more people are turning to implement service mobility solutions in the field because they are completely customizable. Aftermarket consulting experts are best equipped to get to the root of a company’s issues, identify the workflow and recommend proven automated devices that will improve the efficiency of aftermarket service processes and affect service lifecycle management in more positive manner.
Takeaway:
Service mobility is crucial to building service satisfaction, both with the customer and your bottom line.
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What will business look like in 2012 for companies involved in Reverse Logistics and Aftermarket Services?
U.S. Federal Reserve Chairman, Ben Bernanke, pronounced that the economy showed signs of “Green Shoots” that was almost three (3) years ago. Since than, there has been much volatility in the global economy. Although the end of 2011 and the first few weeks of 2012 have showed some signs of improvement in the U.S. economy, there is still a great deal of uncertainty about the impacts of the:
- European debt crisis
- Arab spring in the Middle East
- possibility of a recession in Asia
- chances for a healthy U.S. recovery
One thing that seems to be certain is that we will continue to see volatility in the economy for some years to come. Volatility and change appear to be the new normal in the world economic landscape.
Capitalizing on Volatility
The fact of the matter is that volatility may not be such a bad thing for our industry. We can actually capitalize, if we remember that Aftermarket Service & Reverse Logistics is a counter-cyclical business that responds well to a volatile economy.
To demonstrate, let us look at a few key segments & niches that have and will continue to benefit from the current economic conditions.
Service & Support – During an economic uncertainty, new product purchases tend to remain stagnate. Companies hold onto their technology much longer.
Opportunity - Look for an increase in demand for services that extend the lifecycle of the equipment.
Returns & Liquidation – Economic volatility can cause wide discrepancies between sales forecasts and actual sales results. Excess inventory caused by this situation creates challenges for the supply chain.
Opportunity - Manufacturers and retailers will require increased assistance with managing returns and liquidating distressed inventory at discounted rates.
Asset Recovery & e-Waste - As we have observed, the value of precious metals increases during times of economic uncertainty. In addition, service & support strategies to extend the product life create a demand for spare parts and refurbished units.
Opportunity - Companies that manage Asset Recovery & e-Waste streams could be in for boom times.
5 Strategies for 2012
Companies in these market segments & niches who thrive will be those who develop and maintain a defensible market position. Here are five (5) strategies to follow to create a defensible position:
Cash Flow Management - Healthy profits are not the same as healthy cash flow. Effective management of inflows and outflows of cash is critical. While re-investment maybe necessary for future growth, it is also important not to over extend as we may be in for a long road ahead. Companies with healthy cash flows can also take advantage of the current Merger & Acquisition trends, whether they are buyers or sellers.
Metrics & Controls - It is important to be able to track service performance against customer expectations and quality targets. Management visibility of real-time service issues and escalation procedures for taking corrective action are critical toward customer satisfaction and loyalty.
Predictable & Sustainable Revenue Stream - This is a goal of any organization and dependent on a strong service-marketing program. A clearly defined value proposition, service portfolio, pricing strategy, and business development process are key ingredients to an effective marketing strategy.
Outsource to Gain Advantage – Scalability is the key to profits in the Aftermarket. Service providers are encouraged to outsourced or out-task service activities which are not strategic to the business and do not offer the ability to build economies of scale.
Implement a State of the Art Solution - Your service management infrastructure can make or break your company. It is the glue holding the business together. A state of the art system has the ability to enforce controls, effectively manage the cost of service delivery, and facilitate revenue growth.
Takeaway
Let there be no doubt that 2012 will be a challenging year for the economy in general and therefore all businesses. However, by taking a deeper look below the volatile economic surface we see real opportunities for those Reverse Logistics and Aftermarket Services firms with the insight and a plan to succeed.
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In selling your business, creating the right buyer perceptions are key to closing the sale.
It has been a tough few business years as many companies struggled just to stay afloat, but the economic environment seems to be improving, increasing the opportunity for mergers and acquisitions. If your aftermarket services or reverse logistics business has made it through the recession, it may be time to think about selling.
As you seek potential suitors, it may not always be best to focus solely on the financial aspects of your business. The successful home seller helps potential buyers visualize themselves living there with their family. The same psychology applies when selling a business - help buyers of your business visualize themselves being successful with your company. Here are a few buyer perceptions to keep in mind that will help make your company look more attractive.
According to a Reverse Logistics Magazine article, buyers have self-motivations in purchasing a business. In the world of mergers and acquisitions, they want to believe that the business they are acquiring will:
- earn them a reasonable return-on-investment
- enhance their lifestyle
- help them build for the future
If the prospective buyer does not understand the aftermarket services industry, you may need to give them an industry education in addition to demonstrating the financial soundness of your company. Help them dream about what they can achieve with the company as it is, and as it can be when they bring their personal creativity to it.
In addition to believing that they will be able to realize financial gains, buyers want to know that the transition process will be uncomplicated. Important details to cover in the negotiation process include the:
- support of any parent company or manufacturer
- likelihood that additional products will be introduced to keep the cycle moving
- willingness of employees to adapt to new owners
- probability that current customers will continue to purchase the post sales service/support you offer
This might call for a post acquisition integration period to help insure a smooth transition to the new owner.
Today’s global economy can allow you to offer your business to an expanded pool of potential buyers, but it may require more education on your part. Perhaps they do not understand the supply chain logistics involved in aftermarket services, so you might need to provide more detail on that end of the business.
Buyers from countries that are new to reverse logistics or aftermarket services business models might not understand how a closed loop supply chain works. If you are patient in helping them learn the details of your business, you are more likely to have a successful merger or acquisition.
If your business already has, documented management systems in place, such as ISO certification, explain how that means the company will continue to run smoothly and cost-efficiently.
Another article by Business Development Solutions discusses two risk factors that can reduce business value.
1. “Lack of Transferability” Risk - This is the belief that marketing, sales, production, or new product development all rely on one person and that area will cease to function once that individual leaves. Do your best to demonstrate that the creative talent at your company, the systems you have in place and the marketing programs will maintain customers and the sales tools you use are transferable.
2. “Excess Concentration Risk” - The risk factors that could affect the value of your business related to this risk are a reliance on:
- too few big customers
- one or two key employees
- limited alternative vendors
- a stagnant product/service offering with no new pipeline
Being able to demonstrate that all these types of risk are non-existent or minimal will enhance your ability to negotiate a successful sale.
Takeaway:
If you are thinking about taking advantage of the economic upswing by putting your aftermarket services or reverse logistics business up for sale, spend some time first learning about what buyers are looking for in the world of mergers and acquisitions. Then take an honest look at your company to determine if you have what it takes to make your business a successful acquisition target.
Want more insight into selling your aftermarket services or reverse logistics buiness or division click on the button below now!
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Cloud computing is and will have important impacts on the reverse logistics marketplace are you ready?
Cloud computing gives companies’ access to IT-based services via the internet that include:
- Infrastructure
- Applications
- Platforms
- Business Processes
While the term "cloud computing" is relatively new, the majority of the elements of this approach have been around for a number of decades including items such as timesharing and virtual machines. The technologies of cloud computing let companies achieve higher performance by being able to respond to:
- business needs
- create fresh services
- perform at higher levels
Nowhere is this truer than in the field of Reverse Logistics.
Close the Loop with Cloud Computing
Traditionally, supply chains were either forward moving, where the customer is the last point in the chain - the final receiver of goods or services, or they would move in reverse where the customer is the beginning point in sending goods back to the manufacture for recycling, reuse, refurbishment, remanufacturing, repair, and disposal. Cloud computing makes it possible to combine these two separate models into a single efficient closed loop supply chain model.
Share Info Across Platforms
As the smart technology integral to cloud, computing allows companies to communicate with another irrespective of their program platforms communications between buyer and seller becomes enhanced. Solutions in the cloud allow users to access and share information with no barriers.
RFID
One smart technology that is getting a lot of notice in closed loop supply chain methodology is RFID. Tracking is also simple as the RFID can transmit its location to an application in the cloud and then be found by another user that is the manufacturer puts an RFID on, say a mainframe and ships it, cloud software directly receives the information and the buyer can easily track it. No steps replace several.
Change Business Processes Easier
Cloud computing assures the supply chain business operating models of today real-time, cross-community transparency. Seamlessly processes operate with efficacy and solo or group decisions are faster as the information acted on is from a single source.
Added to this is the benefit of lower costs for shared services and a supply chain community empowered to shrink or grow and still meet the needs of the community it serves. The same expansion and contraction of the community being served can change too, given the cloud-based ability to change the shape of business processes that support goods, partners and locations.
The Time Is Now
Supply chain executives may question if the timing is right for cloud-based applications for managing the supply chain. The answer is yes. Vertical integration of supply changes are morphing, from control of a single company to shared control with suppliers, distributors, third-party manufacturers and even the end-user. Apple is the one of the masters of the game, suppliers all over the world, manufacturing in Asia, distribution on every continent, retail sales in almost every locale and reverse logistics beginning with the customer.
To manage the process of transporting goods and services across national and corporate borders needs multi-company, multinational communication and cooperation. The necessary solution cloud computing brings to the system.
Cloud computing services have made tremendous inroads to data security, redundancy, cross-platform integration, smart technology and lower cost. Predictions by leaders such as SAP are that supply chain management systems will be entrenched as the "best practice" within the decade. Their reasoning is that real-time data is more actionable with a more rapid response time, is cheaper and flexible enough to meet rapid changes in the market.
Takeaway
The impact on reverse logistics and aftermarket services will be profound and game changing. If you have not started to get the information, you need to know how this technology will improve your business do not be left behind.
The economic climate may still be unpredictable, but that does not mean you should not think about selling your reverse logistics or aftermarket services business. For many sectors, economic, tax, accounting and general industry factors have converged to create an attractive seller’s market.
The timing may be right to sell to an entrepreneur, or your company may be in proper position to take advantage of a merger or acquisition.
The M&A marketplace previously stalled is now picking up steam. And, while private equity is still driving the bus, corporate buyers are more prevalent now, according to MERGERS & ACQUISTIONS online at http://www.themiddlemarket.com/.
There Are Plenty Of Buyers
Downsized corporate executives and mid-level managers are looking for personal opportunities where they can better control their future. Moreover, many left former jobs with sizeable severance packages. Buying an established business now looks good to them.
Publicly held companies with high valuations are using their access to cheaper capital to explore mergers and acquisitions, as a means to reach the level of earnings expected by investors. They can leverage acquired cost efficiencies to offer better pricing, to improve competitiveness. Consolidation bodes well for mid-size companies and those that offer “niche” benefits to buyers.
Mergers and acquisitions enable broader and/or deeper market penetration, product range, or other capabilities. Buyers are looking for complementary or new expertise to support vertical or horizontal integration – an increased business base that will enable them to take advantage of global economic revitalization, whenever it arrives.
These sectors are prime M&A targets:
- Information Technology
- E-commerce
- Marketing and PR
- Manufacturing
- Engineering
- Security
- Insurance
- Banking
- Legal
- Accountancy
Capital Gains Are Lower Than Ever
Despite election year rhetoric, after 2012 capital gains savings could become less – perhaps significantly less -- advantageous. Right now, both sellers and buyers enjoy incentives. And, for sellers, tax savings combined with your business sales price can represent very satisfying “total sale” revenue.
There are Potential Financing-Related Advantages
Outside financing is possible but still challenging. Regardless, you may find it more profitable to self-finance. Buyers might be willing to pay higher interest than their bank would charge – assuming it would lend them the funds -- so you could supplement your sales price with substantial additional interest income.
A seller’s willingness to finance the deal also demonstrates your confidence in the continued “performance value” of the company.
Healthy, Profitable Businesses Are Always In Demand
There may be many businesses for sale right now, but good ones that have demonstrable value are still limited in number. Favorable cash flow, a well-received product line, strong market presence and a good brand image are all sales-friendly characteristics that could position your company well in the mergers and acquisitions marketplace.
Even weakening or unprofitable businesses can be attractive for M&A if they offer other special features such as R&D talent, unique access to distribution channels, etc.
Maybe It Is Just Time
There comes a time in the life of every company when it makes sense to sell. If your growth has reached that point, a merger or acquisition may be the ideal next step.
Alternatively, negative factors may be building. You want to sell while your business is still doing pretty well. So if your markets are weakening or your market share declining, or if you are facing an increased need for capital or other significant changes to keep your company competitive, now may be a good time to sell.
Takeaway
The mergers and acquisitions market is all about finding a good strategic fit. Consolidators are looking to build overall corporate strength, and your reverse logistics or aftermarket services business may be the puzzle piece they need.
Would selling now do more for you financially than not selling?
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Thinking about mergers & acquisitions, then you will want to know that the road to M&A success is a dangerous one fraught with risk. Consider a recent KMPG study, found that over 85 percent of mergers and acquisitions fail. Another study, by A.T. Kearney, found that the total return to shareholders on 115 global M&A transactions was negative 58% of the time.
These are sobering numbers to any chief executive thinking about venturing into a merger or acquisition for their firm. Companies that fail to plan properly for their mergers and acquisitions are surely doomed to repeat the sins of their corporate brethren.
Enter the absolute need for strategic planning. No company would enter into a merger and acquisition transaction without planning, but by paying heed to these five tips, companies can succeed as one strong organization.
1. Define measurable, quantifiable key outcomes. The planning process needs to address several things:
- what defines success in the merge
- whether or not it is a merger or acquisition
- how the new company will add to the current company’s objectives
- what the overlap is, and how to integrate the new company
2. Engage in structured planning.
Well-defined planning and execution of mergers and acquisitions is extremely important when it comes to preventing failures. Address issues like unions, pay scales, benefit plans, technology, sales, reporting, marketing, and the legal implications of the merger or acquisition.
3. Stay involved in the core business.
During a merger or acquisition, it is easy to get caught up in the details of the new company. Do not forget about the core business, the one that is enabling you to merge or acquire this new business.
4. Keep employees in the loop.
During a merger or acquisition, employees will worry about the fates of their own jobs. Keep them apprised of changes, and make sure they know that their work is valued. If the company is acquiring another, it is important to try to keep as many of the original company’s employees as possible to boost morale. Also, keep in mind that managers may choose to defect out of fear of losing their jobs. To keep the best talent, reassure them that they will not be laid off after the merger or acquisition – and then follow through with that promise.
5. Transition the new company’s strengths properly.
A huge reason for failure is that the purchasing company does not properly integrate the new company’s strengths into the business, nor does it fully fold the new company into the brand. Transition early and carefully, and plan how each portion of the new company will fit into the purchasing company. In a merger, match the core competencies of each company to bring together a solid, strong unit that generates profit for everyone.
Takeaway
The bottom line is to never neglect strategic planning in mergers and acquisitions and remain attuned to all facets of both businesses.
Like more insights into the strategic planning process that can help your firm navigate the treacherous business transactions of mergers and acquisitions, contact Michael Blumberg, CMC at 855-643-9060 Ext 703.
Free 30 Minute Consultation
Seven strategies for surviving the cloud with a cloud computing survival guide for Field Service Organizations.
Cloud Computing represents one of the most significant trends influencing the global economy today. It is impossible to open a trade publication or magazine without reading an article extolling the virtues of Cloud Computing in its various forms:
- Software as a Service (SaaS)
- Infrastructure as a Service (IaaS)
- Platform as a Service (PaaS)
Cloud Computing is also facilitating the deployment of intelligent, instrumented, and connected technology. This “Smart Technology” forms the basis of the infrastructure that operates the world economies and a wide array of business processes industrial & consumer segments ranging from banking, to building, to cities, to energy, to education, transportation, and even fast food.
Furthermore, miniaturization of digital computing devices makes it possible for anyone, from anywhere in the world, to plug into the cloud, and conduct transactions anytime they want.
Benefits of the Cloud Computing Model
- lower cost of ownership
- reduced carbon footprint
- ease of implementation
- transferring risk from end-user to technology provider
These technology trends are a double edged sword for Hardware Maintenance companies and Field Service Organizations (FSOs). On one hand, Cloud provides access to affordable, state of the art and easy to implement solutions (e.g., Field Service Mobility, Remote Diagnostics, Service Parts Optimization, and Service-CRM). This of course improves the overall productivity and efficiency of Service Logistics and Field Service operations. Think faster and cheaper service!
Alternatively, this same technology is lowering the demand for field service events in general. Not only can Cloud and Smart technology be supported remotely but virtualization and miniaturization are causing the installed base of hardware to shrink, both literally and figuratively, thus decreasing installed base density and the overall demand for field service.
In order to achieve predictable and sustainable revenue growth and profit margin, we believe Field Service Organizations (FSOs) can benefit from following our Seven (7) Strategies for Surviving the Cloud.
Field Service Organizations Surviving the Cloud
1. Strategically Manage your Installed Base
Installed base density is the ultimate driver of profitability within a hardware maintenance environment. Comprehensive knowledge of service demand characteristics and Key Performance Indicators (KPIs) combined with the ability to plan capacity and influence utilization of Field Service resources is critical to achieving profit target and revenue objectives.
2. Find Synergistic Market Opportunities
One of the interesting things about Smart Technology is that it creates a proliferation of connected (i.e., networked) devices and systems that contain commercial off the shelf electronic components and sub-assemblies (e.g., Printed Circuit Boards, CPUs, Monitors, Key Boards, Storage, etc.).
This opens up new market opportunities for hardware maintenance providers and FSOs. A perfect example is Smart Grid Technology that predicts and intelligently responds to the behavior and actions of all electric power users connected to it in order to deliver reliable, economic, and sustainable electricity services. The same service delivery processes and systems that support an enterprise IT network can also be deployed to support the Smart Grid.
3. Re-engineer Back end Service Delivery Model
As the complexity of the serviceable installed base changes in the new cloud environment, so to does the service delivery model. FSOs and Hardware Maintenance companies must be lean and nimble when responding to the new service requirements of the Cloud.
In addition, the proliferation of mobile devices connected to the Cloud is creating the need for new services like asset management and reverse logistics. Re-engineering strategies might involve the transition to a variable work force, adoption of optimized approaches to scheduling & dispatching Field Service Engineers, outsourcing or out-tasking of non-core, service delivery functions, and/or the development of new service capabilities.
4. Implement State of the Art Service Management Systems
Most agree that FSOs need to be lean and mean. Cloud based Service Management applications have tremendous value and benefits from a cost of ownership perspective. Not only do they enable real-time service optimization but they also can be integrated with Smart Technologies to create robust, end-to-end service lifecycle management solutions and new service offerings like Remote Monitoring & Diagnostics and Business Intelligence (BI) & Analytics.
5. Monetize back-end service offerings
Companies who operate hardware maintenance as a profit center are obliged to find new sources of revenue to offset the change in demand. This can be achieved by monetizing re-engineered back—end service capabilities. For example, faster response time brought about through the implementation of optimized scheduling could be monetized through premium priced Service Level Agreements.
Performance Metrics related to Mean-Time-Between-Failure, (MTBF) and number service incidents per customer locations can be mined for business intelligence, packaged, and marketed to end-users as a tool for improving the productivity and efficiency of their own operations.
6. Service portfolio targeted toward new Cloud environment
A logical progression for many FSOs, particularly those involved in IT Services, is to become Cloud Service providers themselves by offering Data Center Hosting/Private Cloud platforms, and Managed Services contracts for devices (e.g., printers, scanners, workstations, etc.) connected to the Cloud. Cloud based Service Management solutions also enable new revenue generating service offerings such a Remote Monitoring & Diagnostics and Business Intelligence.
7. Leverage Partnerships & Alliances
There are so many different options available to re-engineer and/or offer new services offerings. It is impossible for one company to do it all. Partnerships and alliances are the key to tapping new sources of profitable revenue and improving the cost of service delivery.
In summary, while there is lot of excitement about the economic benefits and technical advantages of Cloud Computing, we should not overlook the fact that these opportunities present major challenges to companies involved in Hardware Maintenance by potentially threatening their viability.
Takeaway
However, there is a positive aspect within the Cloud for companies who follow the strategies outlined above. It is not necessary to pursue all. By simply implementing one or two of these initiatives, a hardware maintenance company can stabilize their business, if on a downward trend, and produce a predictable and sustainable (and growing) income stream if already stable.
Like more insights into the threats, benefits and opportunities of cloud computing for you aftermarket services business contact Michael Blumberg at 1-855-643-9060 Ext 703.
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Aftermarket Service as a profit center-Part IV: Technology is Key
Every year, Manufacturers and 3rd Party Service Providers invest billions of dollars in software and services to automate and improve their Aftermarket Service and Reverse Logistics operations. Despite major advancements in software functionality, there is a general sense that these investments have not produced the level of benefits that were promised by the vendor.
According to 2010 market study, nearly two-thirds (63%) of respondents surveyed indicated that their system implementations have failed to realize the benefits that were anticipated. However, not every implementation ends in failure. Some can be very successful.
In light of these issues, we thought it would be very useful to compile a list of the top 10 actions that a company can take to avoid failure and ensure a high Return on Investment (ROI) from implementation of new Aftermarket Service & Reverse Logistics Management systems. Here they are…
10 Ways to Maximize Reverse Logistics Software ROI
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Develop a Clear Strategy The most important way to ensure success is develop a very clear and precise strategy with respect to how your company performs and manages Aftermarket Service & Reverse Logistics. The strategy must be market driven and anticipate the future systemic & business requirements of your company.
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Integrate Afterrmarket Service (AMS) & Reverse Logistics (RL) AMS & RL activities cut across multiple functions within a typical business from CRM, to Supply Chain, to ERP. As such, the the quality of AMS and RL systems can impact these functional areas and vice versa.
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Understand Current Performance Prior to embarking on the deployment of a new system, it is important to get a baseline measurement of Key Performance Indicators (KPIs) and benchmarks. This baseline will likely identify gaps and areas for improvement as well as provide a basis for measuring the extent of the improvement.
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Find the Best Toolset There are a plethora of systems on the market and even more case stories about successful implementations. Beware, one size does not fit all! Your processes and procedures are unique to your business. Don’t attempt to force fit a solution that was designed for someone else.
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Consider Enterprise, Supplier, & Customer Interfaces Make sure that you consider the data points and systemic interfaces that are needed to communicate with the rest of your enterprise, suppliers, and customers. The ability of your AMS/RL systems to work collaboratively and in real-time is critical to the productivity, effeciency, and quality of service operations.
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Obtain Input from Stake-Holders Take the perspectives of all corporate stake-holders (e.g., employees, customers, suppliers, other departments) into account when designing, selecting, and implementing your new solution. This will ensure that you have a solution which meets everyone’s needs.
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Business Solution Not an IT Project AMS/RL represents the next frontier for Manufacturers and Service Providers in terms of generating new streams of profitable revenue. A good AMS/RL software platform can provide the backbone for a very lucrative business. However, success is predicated on designing the solution to meet the needs of the business and not vice versa.
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Define Metrics & Objectives As the old saying goes, “that which does not get measured, does not get improved”. Make sure you have goals and objectives that are measurable and acheivable. That way you can ensure incremental improvements and long term gains.
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Systemic Improvement Not a One Time Event AMS/RL are very dynamic businesses. Service requirements and business practices continue to refine and evolve. As such, the implementation of new functionality should not be viewed as a one time event. Make sure you have a good road map and a broad based planning perspective and time horizion.
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Secure Top Down Leadership & Employee Buy-In Getting top down leadership to support a new business initiative is critical to obtaining funding and ensuring long term committment. However, employees who don’t embace the new way of doing business can sabatoge the implementation and cause damage. It is important to involve operational level employees in the process of system requirements definition and selection process. This will provide them with a sense of pride and ownership in the new system.
Takeaway:
Avoid dissapointment in the level of benefits promised by your reverse logistics or aftermarket service software vendor. As always success depends upon proper implementation. Insure a maximum ROI for your firm by following these 10 steps for a successful implementation of your reverse logistics or aftermarket service software. To learn more how you can avoid failure and achieve a maximum ROI, please feel free to contact us at (215) 643-9060.
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Aftermarket Services as a Profit Center - Part IV Technology is Key
Amidst the heated political debate to raise the U.S. Debt Ceiling, Congress actually had time to focus on issues of Social Responsibility. On June 22, 2011, The Responsible Electronics Recycling Act of 2011 was submitted and filed by bi-partisan sponsorship in both the House and Senate. The bill would make it illegal to send toxic e-waste to developing nations. HR 2284 was introduced in the House by Representatives – Gene Green (TX-D), Mike Thompson (CA-D), Steve LaTourette (OH-R), and Lee Terry (NE-R), and S1270, was introduced on in the Senate by Senators Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH) and Lisa Murkowski (R-AK). A summary version of this bill can be found at http://www.electronicstakeback.com/wp-content/uploads/Summary-HR2284.pdf
This bill restricts the export of electronics containing certain toxic chemicals to developing countries. It would still allow exports of tested and working parts and products, as well as products or components under warranty, exported by the manufacturers for warranty repairs, and products subject to recalls. According to the U.S. Environmental Protection Agency (EPA), the U.S. generated about 2.4 million tons of e-waste in 2010. Many industry observers believe this volume will continue to grow with the proliferation of electronic devices. The bill is supported by environmental groups as well as manufacturers and retailers (Dell, HP, Samsung, Apple, and Best Buy), all of which already have policies that prohibit the export of e-waste to developing nations.
In my humble opinion, this bill does a good job at defining what constitutes electronic waste. It provides a very broad definition, broader than WEEE/RoHS or any state legislation that currently exists. Furthermore, the bill will create the first national policy of its kind. This is something we desperately need. A national policy will also help to eliminate the cost and administrative burden associated with individual state regulations.
One of the limitations of this legislation is that it establishes compliance regulations which only address the of chain of custody from the point of shipment to another country to the point of receipt. Unfortunately, the bill does not address compliance regulations for eWaste processed within the U.S. At face value, It seems that Congress is more concerned with protecting other countries from destructive forces than protecting our own citizens and environment.
One of the most promising aspects of the bill, from a jobs creation and economic stimulus perspective, is that it calls for grants to fund research into the Recycling of Rare Earth Minerals found in e-Waste. While this mandate is quite broad, the funding would cover such things as logistics, reverse supply chain, and separation, etc. Innovation is always a good thing and there are certainly a lot of opportunities to improve the productivity, efficiency, and quality of recycling operations, both on a macro and micro level.
Although this legislation may appear to be very promising toward establishing a national policy and reviving the economy, the real question remains whether Congress will ratify such a bill given the economic issues and fiscal policies facing this country. It is quite possible this bill may die in committee. Status of S1270: referred to Senate Committee on Environment and Public Works on 6/23/2011. Status of HR 2284 : referred to the House Subcommittee on Energy and Environment on 6/29/2011.
In summary, this bill represents a good first step for our country's Electronic Waste Policy. While I am in favor of revisions and letting the political process take its course, my biggest concern is the bill will go nowhere in congress. If you feel as strongly about it as I do, please contact your Representatives and Senators to let them know that they need to pass this legislation. Thanks!
In this final blog post on the subject of After Market Service as a profit center, I will address the strategic role and value of technology. While it's true that all enterprises rely on technology in some way or another, companies In most industries utilize technology primariy as a mechanism for controlling the cost of revenue by enabling employees to work more efficiently or productively. These same benefit exists within the After Market Service industry. However, technology has the added benefit of enabling After Market Service providers to generate new, profitable streams of revenue.
Here are just a few examples of how companies can leverage technology to generate incremental adn profitable revenue streams.
1. Service Level Agreements (SLAs): Through the implementation of Service Parts Optimization and Dynamic Scheduling solutions, companies can do a better job at creating, offering, and managing tighter SLAs. Market Research has shown that customers are willing to pay a premium for faster SLA commitments. Advanced technology makes this possible.
2. New Service Offerings: Applications like Mobility, Remote Monitoring and Knowledge Management tools not only improve the productivity of service delivery but also enable new premium priced service offerings like remote diagnostics and telephone technical support.
3. Creation of new service lines of business: Whole new lines of service business can be built with the help of advanced technology. For example, Service Parts Optimization tools have enabled a few service providers to build profitable Service Parts Logistics businesses. We have also seen Field Service Companies expand into Depot Repair & Reverse Logistics and vice versa with help of enterprise solutions.
4. Enhanced Revenue & Profit opportunities: Mobility solutions make field service personnel more productive and efficient which in turn helps drive revenue and profits . In addition, these tools can be programmed with work flow rules that enable a field worker to double as a front line sales person thus generating additional revenue with little added costs. Furthermore, data collected and monitored by enterprise systems and planning systems can help companies make better decisions about pricing thus generating more sales and profits.
I hope these four brief examples have demonstrated the strategic role and value of technology toward an Aftermarket Service company. To recap, technology can be used both as an operational tool for managing/controlling the cost of revenue as well as a strategic mechanism for creating new profitable sources of revenue. This holistic approach of leveraging technology to improve service profits is also known as Service Lifecycle Management (SLM). Companies who have adopted a SLM mindset and technology delivery platform have been able to achieve substantial improvements in service revenue and profitability, as much 30% to 50% within 24 to 36 months of adoption. You can learn more about SLM by downloading Part I of our white paper entitled: Service Lifecycle Management(SLM): The New Competitive Frontier.
Thank you very much for reading my 4-part blog series on managing After Market Service as a profit center. I hope you found it informative. I am interested in learning about any success you had in implementing the concepts outlined in this series. I will also be more than happy to field any questions. Please feel free to post you comments on this blog site or drop me a note at michaelb@blumberg-advisor.com.