Reverse Lifecycle Management (RLM) provides integrated, end-to-end functionality for the management and control and execution of reverse logistics transactions. The feature functionality in an RLM system enables the automation of key processes and tracking of critical data related to returns, warranty, inventory, transportation, shop floor control, etc. As the acronym implies, RLM supports the lifecycle of a reverse logistics transaction
An Reverse Logistics operartion can realize a number of quantifiable benefits by implementing an RLM solution. These benefits include but are not limited to:
- Cost reduction through better utilization and planning of assets and resources. This is brought about through visibility and planning tools.
- Administration consolidation through reduction of touch points which can be achieved through the integration capabilities, business rule work flows, and standardized management reports found within an RLM solution.
- Protected revenue and income recognized when companies better understand how much revenue and income associated with Aftermarket Service is at risk in the RLSC. This is achieved through the implementation of better controls found within end-to-end functionality and continuous monitoring of RL events (e.g., recall, returns, and warranty service).
- Liability protection: Many companies in diverse industries are susceptible and exposed to legal and regulatory action due to environmental and governmental regulations. The tracking and tracing features within an RLM provide up-to-date, real time information on the disposition of every item within the RLSC.
- Resource optimization: Inventory, transportation assets, employee allocation, and other resources are wasted on improper RL practices. Through business rules and better data, an RLM helps to conserve and manage a company’s resources.
- Productivity and efficiency gains: Poor RL processes take too much time resulting in poor customer satisfaction and wasted money. RLM streamlines and optimizes RL process time through standardized processes and procedures.
- Customer experience improvement: OEMs, 3PLs, Carriers, and Retailers can dramatically improve customer satisfaction through the implementation of self monitoring reverse logistics processes and systems. Refined business practices, such as issuing proper credit for returns, fast turnaround on sending products back to customers, balanced books, and issuing replacements are some crucial and improved processes that are automated by a state of the art RLM solution.
- IT resource reduction: By deploying an RLM on a SaaS platform, multiple instances and replication of expensive hardware and its maintenance are eliminated. The time to deploy the standardized SaaS RLM platform allows for any location to be ready in hours, not weeks or months.
These benefits help an RL operation achieve a best in class standard level of performance. The benefits can in turn be measured in terms of improved operational metrics such as:
- SLA compliance
- Repair Turnaround Time (TAT)
- Cycle Times
- Output Yield
- Quality Levels
- Repeat Failures
In turn, these improvements in operational performance can be monetized directly in the form of cost savings, productivity gains, revenue gains, and improved cash flow. Clearly, the implementation of an RLM will produce a significant ROI that justifies the business case and results in higher gross margins and reduced operating costs, not to mention improved quality levels and customer satisfaction. As such, RLM offers a strategic framework for transforming a Reverse Logistics operation jnto a strategic profit center.
To learn more about the benefits of RLM and how to acheive them in your organizations click here.
A decade ago I wrote an article titled “Can Field Service Survive?” At that time, I made the prognosis that the business of High-Tech Field Service was alive and well, and would continue for some time. This prediction was made in light of industry trends (e.g., remote support) that were bringing the viability of Field Service into question. My belief that Field Service would remain viable was based on several observations namely 1) a marketplace characterized by a very complex installed base of networked technology, 2) increased customers requirements and willingness to pay for onsite service on a timely basis 3) requirement for a vast array of resources (e.g., parts, labor, data) needed to support customer requirements, 4) availability of commercially available off the shelf technology (e.g., Field Service Automation, Dynamic Scheduling, Mobility, Service Parts Optimization) to manage service on an efficient basis.
Basically, my article was written in the days before cloud computing.
Sure, we had the internet with all its hope and promise; a few innovative companies were even turning to hosted internet solutions to operate enterprise systems. However, all the heavy computing and network connectivity was performed on the customer’s premise. The idea of outsourced Applications (Software), Platforms, Infrastructure made available through internet “as a service” technology (e.g., SaaS, PaaS, and IaaS) was just a glimmer in the eyes of many futurists. I doubt that most Service Executives or Service Strategy consultants fathomed the extent that cloud computing would have on Aftermarket Service & Support.
Now that a full decade has passed, I have revisited my assumptions. To tell you the truth, I am not so sure that I can say the same about the future of field service as I once did. To quote Will Rogers…”The future isn’t what it used to be”. While many of the observations I made back in 2000 still exist today, the biggest difference is the installed base of technology has changed significantly. Instead of a large installed base of powerful machines cobbled together through a patchwork of Local Area and Wide Area Networks, everything from software applications, to operating platforms, to computing processing and storage can be provided remotely through the internet. Furthermore, operating platforms are open instead of proprietary which means more interoperability between devices and users. End-users can plug into the cloud from anywhere using any device (e.g., mobile phone, Netbook, Notebook, Set-Top Box, Game Console, etc.). The devices themselves are becoming smaller and smarter, and can sense the condition of the environment in which they operate. More importantly, virtualization and miniaturization has resulted in devices which contain standard components that are more affordable to purchase and easier to repair. And because they are more affordable, they are easier to replace resulting in a greater need to recycle and/or dispose of obsolete technology.
Indeed, we now live on a planet that is smarter, greener, more intelligent, and more dynamic than ever before. This paradigm shift is not specific to just computers. Everything that once relied on big iron and/or electrical or electromechanical processing on premise can now be performed at a centralized, remote location.
It applies to electricity, healthcare, telecommunications, transportation systems, building controls, you name it. Take Healthcare for example, telemedicine creates an environment where nurse practitioners can use intelligent instrumentation to perform a brain scan from a rural healthcare facility, the image is then processed by an MRI machine in another country, and read by a doctor in yet another country.
This new paradigm brings into question what type of service and support needs be performed, when, by whom, and for how much.
Are Service Level Agreements still relevant in this new world? Do we need a large field service workforce? How do we account for assets and manage customer relationships? We will explore this and attempt to bring some high level answers in our next blog post.
Stay tuned…
"This feels like déjà vu all over again!" This is a comment that my late father and business mentor used to say to me whenever we observed a situation with a client in which history seemed to have repeated. Indeed, this current recession has brought about some interesting industry trends which for me are like déjà vu all over again and again. What am I talking about? Basically, with the decline in product sales many original equipment manufacturers (OEMs) are looking to make up margins through a more aggressive attempt at developing new service business in the the aftermarket. However, some manufacturers are surprised to learn that they do not have a captive market fro service and must compete with Third Party Maintenance (TPM) and Independent Service Organizations (ISO) for business. ISO competition is often very troubling to OEMs because ISOs usually don't have the same overhead cost structures as OEMs. As such, they can often provide service at a much lower price. Since the natural instinct is one of survival, the OEM begins to investigate strategies and tactics to eliminate competition by implementing barriers such as denying ISOs access to parts, documentation, or diagnostics.
Quite frankly, I am not sure why some OEMs want to take an adversarial stance against ISOs. Sure, it is within the legal rights of an OEM to withhold intellectual property but this can be counterproductive to the market. First, customers want choices when it comes to purchase of the equipment as well as purchase of aftermarket services. By trying to squash competition through adversarial tactics, the OEM eliminates choice. Second, a landmark Supreme Court Case in the 1990s between Eastman Kodak (Defendant) and Image Technical Services (Plaintiff) ruled that an OEM can have monopoly control over the After Market even it doesn’t have control of the Product market. AS a result, certain competitive practices like tying in the purchase of parts or diagnostics software with service contracts is a violation of Sherman Anti-Trust Laws.
Rather than erecting competitive barriers, OEMs are advised to consider how Companies like IBM, Siemens, HP, Comcast, and Philips, etc. effectively use ISOs to deliver field service on an efficient, productive, and quality basis. Over the years, a number of OEMs have acquired ISOs to not only augment and expand service capabilities but also to develop multivendor service skill sets in order to better service customers who require a single point of contact, total service solution. The fact of the matter is that independents provide value to manufacturers by the mere fact that they force manufacturers to be proactive and innovative in serving their customers. Let’s face it; implementing strategies and tactics to squash compettion is the act of desperate company. Most companies win market share and create sustainable, profitable revenue growth through a business model built upon a committment to customer satistaction, quality processes, highly effecient systems, and well trained people. Furthermore, these companies view compeitition as a healthy thing. Why not use the same standard when it comes to the Aftermarket?
To learn more about strategies and tactics for winning business in the Aftermarket contact us at 215-643-9060 or visit us at www.blumberg-advisor.com
"What is the primary aim of our business?" This is a quesition that a colleague of mine, a turnaround expert, used to ask the client management team on every new assignment. The Management team's answers were predictable ranging from make a profit, to increase sales and customer satisfaction, to maximize shareholder value. "No", my friend would tell them, "the primary aim is to survive".
As companies ride out this recession and prepare for a recovery, the focus will continue to be on survival. In survival mode we need to remember the effectiveness of basic block and tackle moves. The "Strategic Business Model" provides such a framework. Basic tenants of the model are that the internal operating infrastructure and external sales & marketing function must work smoothly, effectively, and in tandem in order to fullfill the company's basic strategic service direction and achieve optimal levels of service performance. This means implementation Service Marketing and Sales programs to increase density of the customer base or installed base and implementation of state of the art service management systems like Field Service Automation, Service Parts Optimization, and Dynamic Scheduling solutions to improve service quality levels. Density is the key to profits in the Aftermarket Service Industry since it results in a lot of customers with similar needs and enables a company to leverage its infrastructure to drive effecinecy and effeciency.
Just as the company needs to work diligently and effectively in building a customer base to generate revenue, it must continously find ways to drive productivity and effeciency through its service delivery infrastructure. Benchmarks measurements such as Turnaround Time, FSE Utilization Rates, No Fault Found provide an assessment the productivity and effeciency of internal service management systems while Customer Satisfaction measures the external perspective on the service peformance. These measurements should be viewed in parrallel to determine if the internal infrastructure (e.g., Reverse Logistics, Field Service, Depot Repair) is capable of fullfilling the marketing promise and vice versa to determine if the marketing promise is capable of being delivered through the internal infrastructure. The Aftermarket Serivce organizations "Strategic Service direction" is achevied to the extent these facets of the business work effectively.
In laymen's terms, operating a Aftermarket Service operation is a little like driving a car in a cross country race. While it is important to keep an eye on the road (the market), sponsors (customers), and other drivers (competitors), it is also just as important to look under the hood to make sure the engine gets us where we need to go. The primary aim of companies in the Aftermarket Service world can be best achieved through continous measurement and calibration of the internal systems and external programs. This becomes even more important when the focus is on basic survival. This is the time when Aftermarket Service executivs and managers can not afford not to give careful attentino to their company's strategic direction and business model.
The Field Service Automation landscape looks very different than it did 25
years ago when I began my career. Back
then, the market was in its early growth stage. Today, the market is mature.
Field Service functionality can be found in different types of applications
which we categorize into ERP/CRM (e.g., SAP, Oracle, Microsoft Dynamics, etc.),
Integrated Service Management (i.e., Astea, Metrix, Vertical Solutions, Amdocs,
etc.), Field Mobility (e.g., Antennae Software, Agentek, etc.), Service Parts
Optimization (e.g., MCA, Servigistics/Click Commerce, Baxter, etc.), and Field
Service Optimization (i.e., Service Power, Click Software, TOA, etc.). Applications are available for purchase either
through an On Premise (i.e., License) or On Demand (e.g., SaaS) solution. As
such the decision making process is much more complex.
In the past, the business user had a very vocal voice in the selection of Commercial Off the Shelf Systems (COTS). Sure
the perspectives of technical and economic decision makers were considered but
now these participations have a greater role in placing constraints and/or
mandates on the types of systems that are purchased. The technical platform on which the field
service application is written is often more important as the feature
functionality of the application itself. The ability of this application to integrate
with other corporate systems is also extremely important consideration and
constraint. One thing which is continued
to remain certain is the applications will continue to evolve and new vendors
will continue to enter the market while others disappear.
Given all these complexities, we believe end-users can benefit from working
with an independent and objective third party advisor such as ourselves to help
define the solution, recommend a qualified vendor short list, and evaluate proposals. We believe our understanding of where this
market place has been and where is it heading, combined with our knowledge of
the current state of the art and vendor market is critical in helping clients
to select and implement solutions which meet the needs of today and the
requirements of the future.
In our last blog post we wrote about early development in Field Service Automation (FSA). There have been many advances since those early days (circa 1986). Back then, most
of the vendors were focused on winning business from large and very large
end-user organizations. After all, the
conventional wisdom was “that’s where the money is”. As
consultants, our firm played a hand in promoting Commercial Off The Shelf (COTS) Solutions and helping end-users define
their requirements, and evaluate and select qualified vendors. We encouraged our clients to give serious
consideration to the depth and breadth of software functionality, its
applicability to their business needs, and the stability of the software
platform over the technical features and bells and whistles of software’s user
interface. As the market become
increasingly competitive many software developers took heed of our advice by
expanding their functional capabilities and implementing segment specific
marketing campaigns.
Over time we saw new developments in Field Service Automation. First,
we saw the development of wireless technologies which led to the roll out of field
service mobility solutions. At first, the vendor evaluation and selection was based on network coverage and
device feature functionality. Overtime, the focus moved toward the capabilities
of the middle software and its ability to integrate with corporate systems and
provide a user friendly interface to the field. In parallel to the wireless
evolution we also saw the development and roll-out of point solutions focused
on various aspects of Field Service Management from dynamic scheduling to parts
forecasting to remote diagnostics. Software developers were constantly looking
at ways to incorporate new technologies such as RFID, GPS, Remote Monitoring, and
advancement in Internet technology into their applications. Over time, we also saw new players come and
go either through acquisition or market shake out. We also saw sales cycles and resulting
implementations become longer, as field service applications become
increasingly more complex and involve cross functional integration with other
corporate systems.
Be sure to check back with us soon as we provide more informaiton on today's FSA environment provide advice for selecting and implementing an optimal solution.