2010: The Year of the Reverse Logistics Management System
“A day will come when customers will evaluate our service business based on the capabilities of our Service Management System”. I remember this statement as clear as day. It was from a participant, a VP of Service & Support, in a focus group that I moderated for a client over 15 years ago. We were working with them to launch what was at the time considered to be cutting edge technology…a Field Service Mobility solution. This executive’s statement helped to validate our assessment of the market opportunity for our client. It also represented a mind-shift in the conventional wisdom toward the use of technology in delivering aftermarket services. Up until this point, service businesses were valued based on the technical expertise of the service personnel. Now it was becoming clear that technology was going to be key driver in the customer’s decision to select one service provider over the other.
Fast forward almost two (2) decades later and we can see how critical and pervasive technology is to the Reverse Logistics & Aftermarket Services industry. From ERP & SCM solutions to mobility, to planning & forecasting, to remote monitoring, it is hard to fathom a service business without technology. Indeed, even customers of service providers evaluate their vendors based on the vendor’s adoption of advanced technology. In the past, IT systems were utilized primarily as a control mechanism to store and retrieve data related to costs. Now they are used to enhance the customer experience. Case in point, business travelers, such as myself, who prefer to use Hertz for car rental due to ease of check in/out enabled through the use of advanced technology solutions such as electronic signage and handheld mobile devices.
Yet, it still amazes me that there are many companies in the Aftermarket Service Industry who still don’t understand this point. Even though industry research shows that IT System functionality is a key criterion in evaluating and selecting service providers, many service providers are still laggards in their use of advanced technology.
Despite the fact that many of these companies are losing business or not getting their fair share of new business due to gaps in their systemic infrastructure, many are in denial that this is even a problem at all. Instead they chalk up their lost sale to a more aggressive competitor or a Not Invented Here (N-I-H) syndrome of the customer. Worse still are those companies who realize they need new system functionality but postpone the decision to invest their own capital preferring instead to find a customer who can generate enough cash flow to fund this project. Not likely!
The fact of the matter is that Reverse Logistics and Aftermarket Service of today has become a technology intensive business as we had prognosticated a long time ago. Most people would think it ludicrous if an OEM did not invest in new technology to design and build better products, or to retool its manufacturing plants. A manufacturer would lose market share or eventually go out of business if this were the case. So why should this be any different for service providers? It is critical for service providers to understand that system functionality is part of the value proposition and mix of capabilities that customers require in a vendor. Customers are smart and can quickly judge a service providers capabilities based on assessment of the provider’s IT infrastructure. Service providers need to think of IT as an extension of their service offering.
Let’s make 2010 the year of advanced technology deployments in the Reverse Logistics & Aftermarket Service Industry. My goal in future blog posts will be to provide you with the expertise and know-how to evaluate, select, and deploy new technology to take your service business to the next level.