Manufacturing Customer Satisfaction

Can after-sales product support set manufacturers apart?

Harld Peters | UPS

For industrial manufacturers, it’s a classic “gap-in-the-market” opportunity. And it couldn’t come at a better time for the sector.

Nearly four out of five buyers of capital goods — 78 percent to be exact — say they expect their industrial suppliers to provide speedy, on-site support and service for their products during the equipment’s long lifespan.

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Manufacturers can create after-sales service and support networks without big investment.

Yet roughly one in nine industrial manufacturers — just 12 percent — says after-sales support is something that differentiates them from competitors.

So there’s the gap. Most customers expect something. An overwhelming percentage of Original Equipment Manufacturers fall short, though a handful are making it a priority, giving them a head start over rivals.

In today’s manufacturing world, where new, low-cost competitors have put pressure on product margins, providing great after-sales service is an excellent way to cement customer loyalty and to grow new sales. This means service where replacement parts are always in-stock and delivered fast and where equipment downtime is reduced to an absolute minimum.

Here’s the best part: Manufacturers can create efficient, profitable after-sales service and support networks without investing unnecessary amounts of money in new warehouses, extra inventory or additional field service technicians — and without contorting their business models, opening new warehouses or expanding into unfamiliar areas beyond their core strengths.

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[Also on Longitudes: This Tiger Still Has Teeth]

Check out Sealed Air

Just ask Sealed Air, the manufacturer of food-safety, packaging and facility hygiene products with customers in nearly 175 countries.

Sealed Air was experiencing high demand for its TASKI® floor-cleaning machines in Europe, where it was managing its own supply of replacement parts for its team of 500 field technicians.

When spare parts were needed, they were either picked up from one of the warehouses by one of Sealed Air’s field engineers or sent directly to the customer’s factory.

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Sealed Air TASKI® swingo® XP-R

Sounds simple, right? It was, but it wasn’t ideal. And that was a problem because while Sealed Air had market-leading products, the company faced ever-growing competition.

For starters, Sealed Air’s approach to supply chain management required it to operate 19 fully stocked, fully staffed warehouses spread across Europe.

That diverted money away from the company’s labs and research facilities and its scientists, engineers and application experts.

And the company’s order fulfillment system for spare parts was hardly a model of efficiency.

Sealed Air technicians collecting needed parts from the company’s warehouse network spent a huge chunk of their time behind the wheel of their vehicles rather than in front of customers, racking up empty miles and empty hours instead of solving critical customer problems.

Parts sent directly to customer sites, on the other hand, were often difficult to retrieve when Sealed Air technicians arrived to install them. Either way, it translated into frustrating delays for customers.

So Sealed Air tried something new.

Partnering with UPS, which has a network of 15,000 Access Point pick-up and drop-off locations across Europe, Sealed Air consolidated its network of 19 warehouses into one centralized distribution facility outside Frankfurt, Germany and handed responsibility for warehousing, inventory management and fulfillment to UPS.

That UPS-operated facility now serves as Sealed Air’s one and only spare parts hub, feeding replacements parts to the company’s army of technicians when-needed, where-needed.

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How does it work?

When a technician needs a spare part, it is sent by air or road — depending on the situation and shipping speed needed — either to the technician’s homes or to an Access Point location along his or her service route.

That has significantly reduced the time those highly trained, urgently needed repair technicians spend collecting and delivering spare parts. It has also given Sealed Air more visibility into the location of parcels in transit.

What’s more, packages of spare parts can now be rescheduled or rerouted at the last minute if a technician’s to-do list suddenly changes.

The result: reduced waiting time for engineers and reduced operating costs and increased operating efficiency for Sealed Air. The company’s ability to provide such nimble, lean after-sales service has opened up new opportunities to support customers and generate revenue through extended warranties.

While this program is now being implemented in France, Sealed Air has plans to expand it throughout its entire European network, making it easier to monitor servicing programs while delivering a consistently high level of customer service. goldbrown2

[Also on Longitudes: Move Over Lean Six Sigma, Here Comes Smart Operations]

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Harld Peters is the President of the West Europe District at UPS.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.