Service Industries

The recently published study by Aberdeen Group, "Optimizing the Service Supply Chain," found that field service organizations are placing an extremely high priority on service supply chain initiatives, with more than 70% of leading firms engaged in active improvement initiatives across all major areas of the service supply chain. Top firms are looking to leverage technology and outsourced partnerships to improve performance in parts management and logistics, product and part returns, and warranty management to create a linked and completely optimized service supply chain.

Among the service organizations recently surveyed, companies that have implemented technology to aid parts forecasting, planning and execution, returns / exchange management, and warranty management have improved:

1. service profitability by 12%
2. customer satisfaction rates by an average of 24%
3. first call fix rates by 23%

Best-in-Class organizations are showing greater improvements, with service profitability up 30%, customer satisfaction increases of 28%, and a 37% improvement in first call resolution rates.

"Top organizations have realized the significant benefits gained by a smooth-running service supply chain," said Micky Long, Research Director at Aberdeen Group. "By leveraging partnerships and technology, and applying the right business processes and workflows, organizations are ensuring delivery of critical service parts to the point of service, efficiently managing part and product returns, and improving warranty management. The result is reduced costs, better customer satisfaction and higher service profitability."

Other service supply chain Best-in-Class characteristics include:
1. 63% have a vice president or higher executive overseeing service and repair
2. 62% regularly track all service supply chain financial and operational indicators
3. 59% offer service staff real-time visibility into parts availability

Long recommends that service organizations consider the following strategies to better position themselves as to meet customer service needs:

1. Link support systems to provide complete data flow across entire service operation
2. Implement real-time analytic tools to aid rapid decision making and analyze the impact of decisions across the entire supply chain
3. Leverage outsourced partnerships in parts logistics, repair, and other supply chain areas
4. Create a closed-loop system to provide product design teams with product repair and warranty information

Over 160 companies participated in this quantitative study, including. Bombardier, Coca Cola, EMC, Heidelberg, Northrop Grumman, Nikon Precision, Panasonic and Toshiba.
http://www.aberdeen.com