Executive Briefings

Growing Demand Seen for Industrial Machinery After-sales Service

Seventy-eight percent of small- to mid-sized industrial machinery companies believe their customers' expectations for after-sales service are rising, but just 12 percent of those manufacturers say replacement parts and service are top differentiators for their business.

Growing Demand Seen for Industrial Machinery After-sales Service

The UPS research, conducted by IDC Manufacturing Insights, indicates that while manufacturers focus on developing and deploying new machinery, the buyers of industrial machines are increasingly seeking after-sales support to maintain the complex machinery for optimal productivity.

“Industrial machinery manufacturers are in a challenging situation,” said Brian Littlefield, UPS director of industrial manufacturing and distribution. “Their pipeline depends on developing new products, yet over one-third say that 50 to 75 percent of their profitability comes from after-sales service. For many, enhancing service after the sale could be a way to differentiate from the competition and offer potential for revenue growth.”

The UPS research found that 56 percent of industrial machinery manufacturers manage after-sales service in-house and have no plans to outsource those services. The remaining 44 percent of equipment manufacturers now use, or plan to use, a third-party service provider for long-term maintenance.

The results are based on a March 2015 survey of U.S.-based industrial machinery providers with a global customer base and between $10m and $50m in annual revenue. All survey participants said more than half of their business was in North America, with the near-remainder divided evenly between South America, Europe and Asia. A small percentage of business was located in the Middle East and Africa.

The UPS Industrial Machinery Manufacturing Insights executive summary can be downloaded.

Source: UPS

The UPS research, conducted by IDC Manufacturing Insights, indicates that while manufacturers focus on developing and deploying new machinery, the buyers of industrial machines are increasingly seeking after-sales support to maintain the complex machinery for optimal productivity.

“Industrial machinery manufacturers are in a challenging situation,” said Brian Littlefield, UPS director of industrial manufacturing and distribution. “Their pipeline depends on developing new products, yet over one-third say that 50 to 75 percent of their profitability comes from after-sales service. For many, enhancing service after the sale could be a way to differentiate from the competition and offer potential for revenue growth.”

The UPS research found that 56 percent of industrial machinery manufacturers manage after-sales service in-house and have no plans to outsource those services. The remaining 44 percent of equipment manufacturers now use, or plan to use, a third-party service provider for long-term maintenance.

The results are based on a March 2015 survey of U.S.-based industrial machinery providers with a global customer base and between $10m and $50m in annual revenue. All survey participants said more than half of their business was in North America, with the near-remainder divided evenly between South America, Europe and Asia. A small percentage of business was located in the Middle East and Africa.

The UPS Industrial Machinery Manufacturing Insights executive summary can be downloaded.

Source: UPS

Growing Demand Seen for Industrial Machinery After-sales Service