Upto 75% of Profit comes from Aftermarket for 1/3rd of Industrial Machine Manufacturers

Recent UPS research, conducted by IDC Manufacturing Insights, has reported that one-third of midsize industrial machinery manufacturers are getting up to 75% of their profitability from parts, service and consumables. 78 percent of manufacturers said that their customers’ expectations for after-sales services are rising, but just 12 percent manufacturers say replacement parts and service are top differentiators for their business.

Graphs

In the remaining 88% of manufacturers, 45% of manufacturers believe machine (product) performance and 43% believe machine quality is their top most business differentiator. It is a known fact that, machine/product performance also greatly depends on Aftermarket services.

The research 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.

UPS Survey

“Industrial machinery manufacturers are in a challenging situation. Their pipeline depends on developing new products, yet over one-third says 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”, says Brian Littlefield, UPS director of industrial manufacturing and distribution.

This survey also reaffirms the fact that, sales is a transaction and Aftermarket/After Sales is a relationship. 61% of the manufacturers have said that, their machines average lifetime is 10 to 19 years. If they approach After Sales rightly, they can get perennial revenue throughout the lifecycle of the product.

Offering an enhanced level of aftersales support is not easy as majority of manufaMapcturers surveyed sell broadly across multiple industry segments (64%); from multiple facilities(68% sell from 2 – 9 locations);to locations around the world (48% sales from outside North America).

Survey also throws light on typical response time taken by manufacturers to respond to a new parts or machine repair requests from their customers. Majority of manufacturers (60%) admitted that, on an average they take 2-3 days of response time for service requests. Given the potential for significant lost productivity and revenue, that 72 hour window is likely unacceptable. Downtime creates lasting memories and anything less than immediate service can dim the prospects for loyalty and repeat sale.

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

Contact us to know more:

Email: sales@questinformatics.com   Web: www.questinformatics.com

Quest Informatics is an Aftermarket IT product and services specialist company having more than two decades of experience in supporting Fortune Global 500 Companies. Quest Informatics was awarded as the Aftermarket Brand of the Year-2014, by Silicon India.

How Generator companies generate extra profit?

Big generator

India is the 3rd largest electricity producing country in the World, with installed power generation capacity of 249,488.31 MW. But daily generation is only to the tune of 135,000 MW and India’s per capita power sector consumption is around 940 kWh, which is among the lowest in the World ( global average 3000 kWh).

On the other hand, power demand is steadily on the rise in India, as it is getting more urbanized and industrialized.  To tide over huge gap in supply and demand, industrial and commercial establishments continue to depend on generators and captive power plants for their power needs.

‘The big deterrence for industries in India is lack of optimal basic infrastructure. For example, we’ve our own captive power plant in our Bengaluru facility’, said Ms. Kiran Mazumdar Shaw, MD Biocon, in a recent interview.

Power shortages cost India’s GDP to about USD 68 billion. Industries investment on power backup arrangements will continue to rise and they will choose power backup products which are more reliable than just being economical.

Power backup generator manufacturers can establish their reliability in the market,

  1. By delivering high quality generators which are durable
  2. By guaranteeing that generators face less downtime through preventive maintenance
  3. By ensuring generators are up & running in shortest time in case of break downs

Out of the three factors above, the last two belongs to the Aftermarket space.

Most of the manufacturers produce the same quality generators and commit the same performance from them. But, their differentiation is by the quality of their Aftermarket services. Manufacturers having an upright Aftermarket services are the clear winners.

Preventive maintenance for engine generators plays a critical role in maximizing reliability, minimizing repairs and reducing long term costs. Preventive maintenance in generators consists of the following operations:

  • General inspection
  • Lubrication service
  • Cooling system service
  • Fuel system service
  • Servicing and testing starting batteries
  • Regular engine exercise

IT systems are available which can keep track on all the operations and alert the customers or manufacturers when they are due. It is generally a good idea to establish and adhere to a schedule of maintenance and service based on the specific power application and the severity of the environment. For example, if the generator set will be used frequently or subjected to extreme operating conditions, the recommended service intervals should be reduced in systems accordingly.

Shorter TATs can be ensured only when customers are able to register the complaint with the manufacturer quickly and then by manufacturer sending the nearest right technician with right tools to address complaints. Manufacturers need to have simpler systems in place for customers to register complaints quickly and a complaint registration acknowledgement should be sent to customers swiftly, even before customer hangs up their phone. Manufacturers should also have systems to capture service history and operational hours of generators, using which it will be easier to predict type of complaint and then send nearest right technician with right tools.

Delivering good Aftermarket services will enhance customer satisfaction and support in establishing credibility, along with perennial profit by parts sale and service throughout the life cycle of generators. IT Systems can also help in preventing warranty leakages and a sustained goodwill in the market will lead to more repurchases from the customers.

Contact us to know more:

Email: sales@questinformatics.com   Web: www.questinformatics.com

Quest Informatics is an Aftermarket IT product and services specialist company having more than two decades of experience in supporting Fortune Global 500 Companies. Quest Informatics was awarded as the Aftermarket Brand of the Year-2014, by Silicon India.

How Quest Informatics enhanced a leading Automaker’s support desk performance to 90%?

Support Desk

India’s leading automaker now boasts of 24×7 parts help line, with 24 hours resolution call closure at 90%. But not long before, it was a different story.

  • Call closure stood at 42%.
  • Parts Help Line (PHL) was mired with challenges like, manual process resulting in call backlogs, unanswered calls, difficulty in getting right information and lack of coordination between departments
  • PHL staff were accessing many applications and sources to find the answers
  • Manually sending acknowledgement of calls and not sharing call progress with customers, resulted in many follow-ups from customers
  • Absence of processes for escalation and inter departmental coordination
  • Lack of categorization and prioritization of calls
  • Complex operations across domestic and international markets

When they turned to Quest Informatics for help, they knew they were in professional hands with over twenty plus years’ experience in aftermarket consulting and solutions. Quest Informatics conducted an ‘as is analysis’ and came out with ‘to be’ solution recommendations. Quest helped roll out

  • A Single of Pont of Contact (SPOC) and restructuring of PHL (included members from the Automaker, as well from Quest Informatics)
  • An escalation matrix and process of interaction between departments
  • A process to populate historical data of PHL and use the same for forecasting
  • Customize Quest Support Desk Application for PHL Activity

Accomplishments:

Our right diagnostics followed by right solution implementation, delivered results beyond expectations:

  • For the first time ever, the automaker’s PHL internal business calls pending were in single digits
  • For the first time ever, PHL domestic business’ pending calls were bought to its lowest, with all calls pending with other department, meaning work-in-progress (WIP) calls were ZERO!
  • For the first time ever, PHL’s 24 hours resolution call closure reached 90%!
  • PHL’s capability increased, as it was able to handle more calls
  • Automaker’s customers are getting acknowledgement and closure information
  • With respect to catalogue, PHL team was able to do Root Cause Analysis (RCA) and also correcting issues by themselves
  • Appreciation of PHL team by the Automaker

Quest Informatics is an Aftermarket IT product and services specialist company. Quest has more than two decades of experience in supporting Fortune Global 500 Companies. It was awarded as the Aftermarket Brand of the Year-2014.

Contact us to know more.

Mail: sales@questinformatics.com   Web: www.questinformatics.com

PRODUCT PERFORMANCE, NOT PRODUCT POSSESSION THAT MATTERS!

According to Dun & Bradstreet, equipments at Fortune 500 companies experience a downtime of about 1.6 hours per week. The economic loss of the downtime is estimated to be around $46 million per year. When there are millions to be saved by increasing uptime, buyers are looking at manufacturers who can deliver them equipments with greater uptime. Buyers are demanding performance (uptime) commitments than just taking pride for owning products. Let’s understand how few manufacturers are trying to ensure higher uptimes by going an extra mile.

Quest Informatics Uptime

At “UPTIME”, a biennial event conducted by Volvo Trucks, its North American president Gӧran Nyberg said “Even a single day of downtime can affect a trucking company’s reputation and relationship with its customer, so we strive to continue to develop new products and services to keep customers’ trucks on the road.” Volvo uses its global network of 2,200 dealers and workshops in more than 120 countries to ensure higher uptime of its trucks. Since 2010, Volvo’s dealers have invested $435 million in facilities and personnel, resulting in a 37% increase in bay capacity and 89% more technicians.

Volvo Construction Equipment (VCE) division guarantees that machines experiencing unexpected downtime will be up and running within 72 hours, or the customer will be provided with a comparable loaner for up to 2 weeks. Its competitor, Hyundai Construction Equipment is promising an uptime of 98% for its Wheel Loaders, if proper preventive maintenance procedures are followed.

Leading Indian carmaker Maruti Suzuki, which is widely recognised as having great after-sales service, has 3,060 service stations (inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,454 towns and cities throughout India, which is more than double of its nearest competitor. Not be complacent, Maruti has come out with a programme to skill up 2,100 youth annually on car service, repairs and maintenance. This programme will supply a good number of skilled automobile technicians to the market, who across the country will come handy when Maruti’s customers face challenges.

Underscoring the importance of Aftermarket support, Maruti Suzuki’s service division Executive Director Mr. Pankaj Narula said ”Our experience suggests that a key determinant in the car buying decision is the after-sales network, its accessibility, service costs and the availability of spare parts. Our big goal has been to run a robust service network that also supports sales.” One of Maruti’s competitor Tata Motors has plans to double its dealership network to 1000 by 2020 in India, so that it can serve its customers better.

It’s evident that, equipment uptime can only be met with a robust Aftermarket support network, which is not just about comprehensive technology but also about skilled personnel.

Focus on uptime is not just restricted to Heavy equipment & automobile, but also in sectors like, Industrial refrigeration, Wind Turbines, Industrial Print Machines, Medical Devices, Farm Equipments and Water Treatment Equipments, etc. Leading companies from these sectors have employed following practices that are enabling them to deliver higher uptime.

  1. Effective Communication: Ways & means of registering a downtime should be very short & simple. For example, allowing customer to register a complaint through an SMS is a great facility to have & acknowledging the same will give customers the first level of respite. Service technicians should be able to access details like service history, parts replaced, etc on the go. Also, field technicians should be able to update the job status in real-time may be through SMS or Mobile app.
  2. Preventive maintenance: Major downtime issues can be prevented by regularly checking on areas like hydraulic fuel levels, Oil levels, Air & Oil filters, etc. Manufacturers are persuading customers to undergo preventive maintenance activities through awareness campaigns & also by sending reminders.
  3. Proactively identifying issues: Systems use knowledge base to identify the vulnerable areas of equipments. For example, based on HMR reading, system will predict the replacement of oil filters.
  4. Deploying ‘Rapid Service Action’ teams strategically: Even after best efforts, emergencies will continue to come. Preparation is the best way to respond to any emergency. Service technicians are placed close to customers by analysing the equipment density, their working hours, etc.
  5. Leveraging the strength of Dealer Network: Regular training dealer’s personnel on servicing, using electronic tools is an economical & efficient way to increase uptime. Also, share updated electronic catalogues (parts, service etc) across the dealer network swiftly.

Apart from generating more revenue, higher uptimes help your customer in meeting their commitments, which in turn elicits loyalty and repurchase of your equipments. So, time is up to focus on Uptime!

Quest Informatics is an Aftermarket IT product and services specialist company. Quest has more than two decades of experience in supporting Fortune Global 500 Companies. It was awarded as the Aftermarket Brand of the Year-2014. Quest Aftermarket ERP is a comprehensive, robust, flexible, intelligent product which addresses all the challenges of Aftermarket and will be up and running within 3 months. Many have boosted their Aftermarket revenue up to 35% post implementation of it.

Contact us to know more.

Focus on Aftermarket to improve Customer & Dealer satisfaction: Study

auto-industry-satisfaction-at-all-time-Quest Informatics

J.D. Power Asia Pacific 2015 India’s Dealer Satisfaction with Automotive Manufacturers Index (DSWAMI) Study released on 28 May 2015 emphasises the fact that manufacturers have to improve their Aftermarket services to improve their dealer satisfaction.

According to the study, overall dealer satisfaction is determined by examining nine factors, out of which 5 factors belong to Aftermarket.

  1. Marketing and sales activities (15%)
  2. Product (12%)
  3. Vehicle ordering and delivery (13%)
  4. Sales team (16%)
  5. Parts (6%)……………………………………………………..
  6. Warranty claims (7%)……………………………………..
  7. After-sales team (7%) …………………………………….Aftermarket (45%)
  8. Training (10%)…………………………………………………
  9. Support from the manufacturer (15%)………………

J D Power Study 2

45% of factors contributing to dealer satisfaction with automotive manufacturers fall in Aftermarket.

India Tractor Customer Service Index (CSI) Study 2015

Another study released by J.D. Power Asia Pacific, titled “India Tractor Customer Service Index (CSI) Study 2015”,release on 18 February 2015, shows a considerable gap in the Aftermarket support offered by Tractor manufacturers to their customers.

The study found that only 8 percent of owners are contacted by their authorised dealer when their tractor requires routine maintenance. Among owners who take their tractor in for maintenance, the average wait time for service is 2.5 hours, with 19 percent of owners waiting more than one day for their tractor to be serviced.

“Dealers should be more proactive in reaching out to farmers to ensure their tractors are correctly maintained. Encouraging customers to conduct regular maintenance on their tractors not only makes financial sense for the dealer, but it also reduces the number of tractor breakdowns and helps improve the overall uptime during busy periods.” said Dr. Gordon Shields, director, J.D. Power Asia Pacific.

Overall customer service satisfaction is based on a combined score of the service satisfaction index and parts operation index. The service satisfaction index examines satisfaction in four key measures (listed in order of importance): service quality; service initiation; service engineer; and service handover. The parts operation index examines satisfaction across five attributes, including availability of parts, speed of parts delivery and parts value for money, amongst others. As it is clear, these attributes and measures fall in Aftermarket.

The take away from these two studies is that manufacturers have to improve their Aftermarket services to improve their customer satisfaction.

Source:

http://india.jdpower.com/press-releases/2015-india-dealer-satisfaction-automotive-manufacturers-index-dswami-study

http://india.jdpower.com/press-releases/2015-india-tractor-product-performance-index-ppi-customer-service-index-csi-studies

How to build best in class support desk?

• What is behind the success of business leaders?
• How support plays a vital role in branding and customer experience?
• Do you know the pain points of your current customers and what they think about you?

The answer to all the above questions is your support desk.

Customer satisfaction is the primary measure of success for any company and the effective way to reach customers is through a dedicated support desk working hand in hand with them. Support desk or customer service desk is essentially a single point of contact for customers to reach out to your organization with their grievances, know the status of your response and also provide valuable feedback on what they like and what they do not in the service operations. Based on industry, support desk works in different forms viz. Customer Support, Help Desk, Service Desk, Part Desk, Customer Relationship Management, etc. They work closely with customers – troubleshooting their problems, assisting customers in right use of the product, addressing customer grievances and providing right solutions.

Best in class support desk softwares have following characteristics:
• They act as single point of contact (SPOC) to avoid conflicts and delays.
• They manage call monitoring.
• They manage timely responses, status updates and resolution of problems.
• They are equipped with knowledgeable resources to handle in-depth product information and FAQs.
• They offer proactive support for spotting reoccurring issues, identifying root cause and resolving it.
• They have well defined escalation procedures for effective management of responses.

What is the impact of support desk? – Many service professionals understand that good support does matter and the NO or BAD support can harm reputation of company and even lead to huge losses. No support or Bad support leads to –ve customer word of mouth. –ve word of mouth may impact purchase decision, switching to competition or in worst cases legal suites and claims.

Deploying a support desk helps to know where is the customer ticket, how long it has been in queue and what the lead time to response and closure is. This helps companies in knowing who have been resolving or who can resolve what type of issues, at what level and by what time. This helps to define KPI for different levels and type of calls to optimize response and resolution time.

Support desk plays a vital role to develop customer loyalty as customer feels he is closely connected to the company and this invariably drives company to deliver amazing results.

Aftermarket service maturity: assess where does your company stands

Aftermarket service maturity: assess where does your company stands

In this paper published in “Indian management”, Dr TR Madan Mohan, Rudresh Basavarajappa and R Ganapathy describe stages of aftermarket maturity and how to traverse from initial stages to more evolved stages. The maturity model is a useful framework for all OEMs and their dealers across industries such as heavy equipment, automotive, construction, medical, industrial equipment and agricultural products industries where post-sale support exists.