Following the news that John Lewis has chartered a fleet of ships to limit the impact of supply chain disruption on its Christmas season, Alan Laing, UK&I Managing Director at enterprise software firm, IFS has praised the company – noting that others can learn from their foresight and planning.

As reported by the BBC, John Lewis is chartering a fleet of extra ships, along with a number of other businesses, to make sure it has Christmas stock on time.

IFS HAS PRAISED JOHN LEWIS' FORESIGHT AND PLANNING CAPABILITIES IN LIMITING THE IMPACT OF SUPPLY CHAIN DISRUPTION AHEAD OF CHRISTMAS

Alan Laing, UK & Ireland Managing Director at IFS commented: “Supply chain disruption has dominated the business and news agenda for much of the pandemic period, and it is clear that firms are increasingly worried about what that may mean for seasonal sales in the run up to Christmas. The measures announced today by John Lewis show a business that has made an intelligent assessment of the potential pain points in its supply chain operations and put in place a well-considered mitigation plan well ahead of time, proactively minimising disruption and ensuring their customers still receive the service they’ve come to expect from the retailer. Others can learn a lot from this example, leaning on resource planning software to gain true visibility of their business and plan for a range of potential scenarios to make sure they are delivering for their customers when it really matters – at the moment of service. However, the time to do this is now, before it’s too late.

IFS helps companies around the world who manufacture and distribute goods, build and maintain assets, and manage service-focused operations to plan and manage their supply chains and coordinate people, product, and processes to ensure businesses run optimally.

Further Reading:

• Read more about Parts, Pricing and Logistics @ www.fieldservicenews.com/parts-pricing-and-logistics
• Read more about Service Supply Chain on Field Service News @ www.fieldservicenews.com//service-supply-chain
• Read more about IFS on Field Service News @ https://www.fieldservicenews.com/ifs
• Find out more about IFS @ www.ifs.com/
• Follow IFS on Twitter @ twitter.com/ifs

three ways to stay on track of the supply chain

First and foremost, understanding the supply chain’s efficiency is difficult to master, which is why there are service industries that assist with some of the distribution of services. But how can you stay on track of the supply chain? Here are three tips that we use, that are beneficial when wanting to stay on top of the curve. 

#1. Adapt to Your Customer Demand and Go Mobile

#2. Outsource an External Partner

When your company decides to outsource an external partner, you are allowing yourself to focus more on your company’s core strengths and values. Thus, remaining ahead and on track of any trends relating to the supply chain. Instead of maintaining in-house infrastructure and expertise to manage every operation in your business, companies should consider outsourcing supply chain partners. By outsourcing a third party logistics company, you will be improving your business by speeding up service and improving your customer service. Additionally, the business will be saving both time and money. 

#3. Increase or Maintain Your Visibility

The term ‘Supply Chain Visibility’ refers to your company’s ability to track every component and touchpoint the product has undergone, from the suppliers’ hands to yours. 

You can obtain good visibility to your customers by giving your suppliers the ability to check your inventory in real-time, in order for them to gain a better understanding of current stock and plan ahead for future demand. Having a supply chain partner that presents good visibility and allows your team members to access details about your counts allows them to strategize freely, without risking too much distraction back-and-forth. 

Allowing colleagues, customers and suppliers the power of visibility relieves pressure regarding communication and inventory planning for the future. Your supply must be responsible to stay optimized for many different market and supply conditions. Think redundancy and multi-channel supply chains.

Kevin Little is VP, Sales and Marketing at PiVAL International.

Ensuring your field service engineers are best positioned to deliver a first-time fix becomes a moot point unless you have an efficient service supply chain.

Claudine Mosseri, General Manager, Field Services, ByBox outlines the benefits of outsourcing this critical function...

Running an effective supply chain can seem like a necessary evil for many businesses.

With multiple touchpoints and high margins for error, supply chain management requires a comprehensive and considered approach.

Running an effective supply chain can seem like a necessary evil for many businesses.After all, being unable to successfully deliver goods to customers is detrimental to both service and reputation. For many companies, a solution to the supply chain conundrum is to outsource the operation – either in its entirety or in parts – leaving them to focus on the day-to-day running of their operation and growing their business.

Supply chain collaboration goes beyond transactional relationships in warehouse management and transportation to encompass value-added processes, such as demand planning, configuration and returns management. At ByBox, we have made significant investments into effective parts management and increasing stock visibility.

Our approach is to move the data, not the part.

What does this mean?

It enables us to take a holistic view of where all spare parts are, whether they are with an engineer, in a warehouse or stock holding facility, or in a secure location such as a locker bank. This view of the supply chain provides customers with new ways of getting an item from A to B.

Establishing a dramatic improvement in inventory visibility is at the heart of next-generation supply chain methods.Establishing a dramatic improvement in inventory visibility is at the heart of next-generation supply chain methods. Historically, pallets of parts have been moved blindly through distribution networks, only to be moved somewhere else the following day. Our approach exposes that data, helping customers make informed management decisions.

All movements can be traced in real-time online to see at precisely what stage of the supply chain a customers’ part is located. As a result, businesses spend less money on same-day transport and unnecessary stock holding.

Modern logistics is constantly moving forward, with businesses trying to stay on top of the latest trends and technologies while satisfying customers. Re-evaluating supply chain partners can help businesses to speed up service, improve customer experience and review costs.

There are additional reasons for reviewing visibility within a supply chain:

1. Increased Efficiency:

Working with a partner that understands the need for efficiency can help you increase it within the business. By exposing real-time data and full visibility of stock movements, your technicians always know what parts are available for collection.

Visibility in a supply chain not only reduces stock loss but also provides clarity over what jobs can be completed.

2. Saves Time and Money:

When you outsource to an external partner, you can save a great deal of time and money by cutting down on wasted stock. Finding suitable space to store your products, a means for transporting them, and qualified staff to carry out the dispatch process can quickly add up.

Outsourced providers can leverage economies of scale, and scope, to provide compelling value-added services.

3. Consultancy:

Exploring more effective ways to manage and improve the supply chain could take up a great deal of time.

The same goes for hiring a team of staff and providing them with necessary training. Working with a business that invests in spare part visibility can provide you with the information needed to reduce stockholding, while also increasing efficiencies and SLA performance.

4. Scalability and Flexibility:

Outsourcing some of your supply chain management needs can lead to more flexibility to scale up or down, accommodating your current, and future, business requirements. As your business needs change, you’ll need to be able to adapt accordingly.

Not having enough space, manpower, or transportation could prove detrimental to your business.

By working with an outsourced company, you have access to their knowledge and resources, which means expert help in developing a more extensive and appropriate infrastructure.

5. Adapt to Customer Demand:

Customers now demand 100% uptime of technology in the field and are intolerant of failure. To achieve this, businesses are required to get vital spare parts to field engineers as quickly as possible. At ByBox, we don’t believe this should come at a higher cost, which is why we don’t rely on same-day deliveries.

Our unique technology is paired with app activated locker collection, so engineers can access parts delivered overnight, whenever they need them.

Outsourcing your field service supply chain, focusing on stock management and visibility can mean you’re better equipped to cope with changing business requirementsIn conclusion, outsourcing your field service supply chain, focusing on stock management and visibility can mean you’re better equipped to cope with changing business requirements, shifts in customer demands and changing market conditions.

Using a supplier that offers full visibility and flexible solutions - such as locker delivery - can reduce cost on stock, transportation and overheads. It’s not just about reductions, the right partner can also increase efficiency and customer satisfaction, adding value to your business and reducing the bottom line.

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Blockchain, the technology developed to enable the crypto-currency Bitcoin has become the latest big buzz phrase technology across industries worldwide, but is it just hyperbole or can it be an important factor in the future of field service?

Business across the world are turning their attention to BlockChain right now and in the majority of cases, the main focus of this attention is centred around Bitcoin, the first globally recognized digital (crypto) currency that has hit the headlines largely for huge spikes and dips in its value across the last 12 months.

However, whilst Crypto-Currency is the most widely understood application of Blockchain technology, there may be a number of other applications which could be far more important to how the field service sector operates.

Blockchain 101

So for the uninitiated lets first get our heads around exactly what BlockChain is...

To begin a blockchain is a continuously growing list of records, called blocks, which are linked and secured using encrypted codes. Essentially, each block will typically contain a cryptographic hash of the previous block, alongside a time stamp and the transaction data.

Perhaps the most critical point to comprehend about blockchain is that by design, a blockchain is inherently resistant to modification of the dataPerhaps the most critical point to comprehend about blockchain is that by design, a blockchain is inherently resistant to modification of the data. The technical language is that it is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.

When used as a distributed ledger, a blockchain is generally managed by a peer-to-peer network which adheres to the same protocols for validating new blocks collectively. What this means is that in practice, once the data is within in any given block it can not be altered retroactively without the alteration of all subsequent blocks. The particularly clever part here is that as each peer within the chain is working as part of the collective, such a change requires the collusion of a majority from the network - this makes pulling a fast one anywhere along the line pretty much near impossible.

Thus blockchains are inherently secure by design.

For the more technically minded amongst us, one could suggest quite rightly that the establishment of blockchain has meant that decentralized consensus has become realized, with blockchain ‘exemplifying a distributed computing system with high Byzantine fault tolerance’

For those of us who are perhaps more interested in the outcomes, however, essentially what we need to know is that due to the way they have been designed they are highly suitable for the recording of information that needs watertight security - such as medical records and of course financial transactions - which is where it all began.

Whilst Blockchain is rapidly gaining attention, it is the crypto-currency that it was created for use with, Bitcoins, even more widely recognized within the mainstream.

Blockchain was invented by wonderfully mysterious Satoshi Nakamoto back in 2008 as Bitcoin’s public transaction ledger.

Indeed it was the invention of the blockchain that allowed bitcoin to become the first digital currency to solve what is known as the ‘double spending problem’, without the need of a trusted authority or central server - essentially making crypto-currency viable.

So it’s just a new way of taking payment?

Well no, as we alluded to at the top there could be a lot more to how Blockchain plays a role in field service which we’ll go into shortly - but whilst we are at it there is certainly a case for adding crypto-currencies to the list of how your organisation receives payment for the services delivered - especially if you are serving the consumer directly.

Certainly whilst crypto-currency is by no means a mainstream payment method as yet, an increasing number of businesses are starting to accept it and with a lower barrier to entry than accepting plastic, any business in any industry has the ability to adopt crypto-currencies.

In Japan alone, an estimated 260,000 businesses were reported to offer the cryptocurrency as a payment channel in 2017.In Japan alone, an estimated 260,000 businesses were reported to offer the cryptocurrency as a payment channel in 2017.

But what are the benefits of accepting cryptocurrencies such as Bitcoin for a business?

There are plenty of positives in doing so but some key reasons cited in an article on business.com include:

• Eliminate chargeback fraud: A Bitcoin transaction is immutable. Once a client has paid for a product or service, the money is in your account. Unlike credit card payments, charges cannot be reversed.
• Immediate availability: There is no third party-dependent waiting period the way there is with bank-owned payments.Once payment is successful, the transaction amount is in your wallet and accessible immediately.You can convert Bitcoin into your local currency fiat at the end of each transaction, at the end of each working day or according to a custom set schedule.
• Lower transaction costs: Credit card payments usually end up costing you a 2 to 4 percent fee.With Bitcoin, this amount is a low flat fee, not a percentage of the transaction.
• Attract new customers: As Bitcoin rises in popularity, more users seek out participating businesses. This can mean exposure to a clientele you didn’t have before.
• Garner publicity: Bitcoin makes the news in a way fiat currency can’t. Local, national and even international news outlets are reporting on businesses taking Bitcoin payments, giving you an opportunity for free publicity.

Fixing the holes in the Internet of Things

However, as mentioned above, within the field service sector Blockchain has a huge amount more potential than just facilitating an additional means of receiving payment.

Firstly, there is its potential application within the Internet of Things - which is set to become the fundamental backbone of service delivery in the future - although widespread mass adoption is still arguably held back due to security concerns, a very real example of which being realized back in October 2016 when an unprecedented distributed denial of service (DDoS) attack involving an estimated 100,000 compromised devices in the Mirai malware botnet nearly brought the Internet to its knees in 2016 provided a clear indicator of the precarious state of IoT security.

The root of such weaknesses lies essentially within the security architecture of the IoT itself.

IoT architecture relies upon a distributed client-server model which uses a central authority to manage both the IoT devices as well as the data generated across an IoT network.

For IoT data to be trusted, all trust requests are aggregated into a single location which creates a sole point of security intelligence that can compromise IoT security. This is how Mirai-style botnet attacks can succeed.

Basically, during such an attack, IoT devices are unable to adapt their behaviour because they are not considered “smart” enough to make security decisions without the help of the central authority.

In an interview with computerweekly.com Joseph Pindar, Director for Strategy in the CTO office at Gemalto, and co-founder of the Trusted IoT Alliance, a non-profit group that advocates the use of blockchain to secure IoT ecosystem outlined why he believes Blockchain could hold the answer to true IoT security.

Pindar explained how blockchain removes the single point of decision-making that leads to failure, by enabling device networks to protect themselves in other ways, such as allowing devices to form group consensus about what is normal within a given network, and to quarantine any nodes that behave unusually.

Blockchain can play a crucial role in building trust in IoT dataIn addition to this blockchain can play a crucial role in building trust in IoT data by enabling what Pindar called the five digital security primitives: availability, auditability, accountability, integrity and confidentiality.

In blockchain, data is automatically stored in many locations and is always accessible to users.

For auditability and accountability, a private, permission-based blockchain is used – where all users are authorized to access the network – and because all data stored on the blockchain is signed, each device is accountable for its actions.

With regards to integrity, blockchain is as we’ve outlined above a public ledger of data entries.

With every entry, deletion or correction of data being confirmed across the network across a fully verifiable complete chain of events.

Further to this, there is also another perhaps less obvious but equally important benefit of utilizing Blockchain within IoT systems which Pinder raises.

There is a fairly widespread mindset amongst IT executive management regarding securing the industrial Internet which is that once a sensor, device or controller has been deployed and is working, it cannot be touched.

“Even if there is a known security vulnerability, it is not worth fixing it, because there is a chance that the security patch would cause problems elsewhere in the system that no one knows how to fix,” explained Pindar when speaking to Computer Weekly’s Aaron Tan “But as cloud computing has demonstrated, there are continual failures of devices and systems when operating at very large scale.”

“Simply put, it is not possible to manage large-scale systems that are fragile and not resilient to failure – as is the case with many current industrial IoT and OT systems.”

And the solution to this which Pindar recommends is to allow continuous deployment of software updates, alongside blockchain technology after devices have been deployed, with little or no downtime through an over-the-air update system - something he believes delivers both cost and operational efficiency when delivering over-the-air updates and patching to IoT devices and sensors.

With the IoT becoming more and more prevalent amongst field service organizations, the suggestions Pindar makes regarding the application of Blockchain in such systems should indeed be an important consideration for field service organisations as they establish their IoT processes.

The final piece of the 3D printing puzzle?

However, there could be yet another important place for blockchain within the field service sector, it could just be the missing piece of the puzzle in resolving one of the biggest challenges within our sector, namely managing the spare parts supply chain.

3D printing has for a long time been touted as a potential solution to getting parts needed to engineers as soon as possible, but one potential hurdle has always been how organisations control the licensing of the spare parts to ensure that firstly if the customer has 3D printing capability on-site - which has been one suggested use case, how can the provider ensure they don’t simply print off as many parts as needed once they have initially received the schematics file.

Similarly, by sending the parts data across in a digital file, the potential for such a file to make its way into the hands of unscrupulous third parties happy to make unauthorized parts for sale elsewhere is also a cause for concern for many organizations. Frankly, the risk to their IP and the significant loss of revenue this could lead has meant that many OEMs still view 3D printing with a distinct lack of trust.

However, could Blockchain perhaps hold the solution to such fears?

This certainly seems to be the thinking behind one Italian startup called 3D-TOKEN, which aims to integrate Blockchain and 3D printing technologies, in order to create a “unique, decentralized, global Just-In-Time Factory 4.0 for this century’s digital revolution.”

If successful it could certainly set a precedent for how Blockchain and 3D printing could work in harmonyAside from cramming as many manufacturing buzz phrases into their mission statement as possible, it seems it is certainly a concept that could have a potentially huge impact on service organizations within OEMs.

The goal for 3DToken is to connect thousands of 3D printers in a network hub based in Blockchain. In short, the plan is to create a Blockchain-managed network hub of desktop 3D printers.

The project will be used to bring just-in-time small-to-medium scale digital manufacturing to a new level.

Coin Telegraph described the startup as being capable of “accelerating the 3D printing market to its full potential” by changing up industry norms on product cost and time to market.

Whilst this project is still very much in its infancy, they have made impressive progress to date and although the focus on desktop 3D printers would suggest a consumer-centric approach initially as opposed to something suited for industry, if successful it could certainly set a precedent for how Blockchain and 3D printing could work in harmony, and the concept should at the very least give many OEMs food for thought as to how they could harness the potential of 3D printing. Especially as a means of bypassing much of the often highly complex service supply chain.

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Ahead of the forthcoming inaugural Spare Parts Summit being held in Warwick, UK on April 12th, Field Service News Editor-in-Chief, Kris Oldland talks to Thomas Igou, Content Director, Copperberg about the impact the growing trend of servitization will have upon the spare parts sector...

In his role as Content Director with conference producer Copperberg, Thomas Igou has been at the heart of conversations in both the Field Service and Spare Parts sectors for many years now. So who better to assess how the continued trend of servitization is impacting on both sectors?

With Copperberg launching a new UK focused version of their highly respected European Spare Parts Forum I was keen to get his view of what the key issues facing those working in the Spare Parts sector were and if the introduction of outcome-based contracts would require a rethink of how manufacturers align there field service and spare parts operations.

“There are three main themes on the macro level looking at how digital transformation is impacting organisations and more importantly the service business,” explains Igou.

Most manufacturers today are going through some form of servitization process moving from a purely transactional business to a more servitized model“Most manufacturers today are going through some form of servitization process moving from a purely transactional business to a more servitized model. That creates both great opportunities but also some sizeable challenges from a spare parts perspective and then to add to those challenges there are a number of other disruptive factors in the market at the moment as well.”

“eCommerce, AI, 3D printing and so on are all necessitating transformation in the spare parts sector, which has tended to be the cash cow within a service businesses because of the purely transactional nature of the business - the customer needs the spare part, he orders it, pays for it, gets it delivered.”

“Whereas on the flip side, when you look at field service it’s actually the opposite - field service directors are looking at how to move from being a cost centre to being a profit centre, and servitization plays a role in facilitating that shift. “

“However, the impact that is being seen in spare parts operations as companies move towards an outcome-based model, is that companies actually, start to cannibalise some of their spare parts revenue - because instead of being purely transactional, spare parts orders and deliveries start being included in SLAs, so actually, you will make less money from the sale of spare parts.”

“Essentially, it is something of a contradictory development because companies have to take away from one side to add value to the other.”

As Igou mentions for the spare parts executive there are additional external challenges to be contended with as well as the internal questions being raised by outcome-based contracts. Not least of these is eCommerce.

“eCommerce is another very significant topic of conversation at the moment, especially regarding competition from China where quality is getting better and better but as Chinese organisations have access to much cheaper raw materials they are able to be far more price competitive compared to European or North American organisations,” Igou explains.

“And that is before we even get to challenges centred around pirated parts - there are even growing fears around how companies like Amazon or Google could enter the sector and take a large share of the market revenue quite easily as they have done in other industries and sectors.”

Indeed, the Spare Parts sector is perhaps facing some of its most testing times ahead, but there remain plenty of opportunities also - many of which lie in tightening up efficiencies in two of the sectors mainstay topics - pricing and logistics.

The main aim with the spare parts sector is tackling how to deliver the right part, at the right time and at the right price“The main aim with the spare parts sector is tackling how to deliver the right part, at the right time and at the right price,” Igou explains.

“Most companies are now trying to move away from the cost plus model (i.e. how much does it cost to produce the part and then adding the profit on top) towards a more value-based approach, or if a company is entering a new market, they may prefer a market-based pricing strategy. Here, of course, eCommerce is again having an impact because prices are becoming more transparent - anyone can go on eBay or the internet and see on your website how much it costs to buy a part from China compared to say Egypt and then compared to the US or Europe.”

“If you have price differences it can be awfully bad for businesses so companies are facing a need to standardise prices across the board.” “In terms of logistics, the big discussion remains centred around whether companies should have a centralised warehouse management solution (where you have one big warehouse holding all of the stock and service all of Europe) or whether they opt for a decentralised strategy, operating multiple smaller warehouses which are closer to their customers, but which cannot stock as much inventory per warehouse.”

“In addition to that, there is a new consideration emerging,” Igou adds.

”We had a great session at this year’s European Spare Parts Forum from Schneider Electric about segmenting logistics depending on customer segments. Schneider found that customers in each of the differing sectors they service have different behaviours and expectations. For example, in one industry it may be that their customers need a very rapid solution and the key issue for that industry may be availability, so their logistics channel needs to be very good and very flexible and agile.”

“Whereas, another customer segment might be more demanding of uptime or more price sensitive etc, so segmenting your service supply chain based on your customer segment and the specific needs of that sector is another consideration that is beginning to enter the conversation.”

Of course, as Igou mentions, as companies move towards outcome-based solutions there is a danger of spare parts revenue being cannibalised as part of the wider service offering.

So where does he see the future of Spare Parts Management - will it ultimately become swallowed up as a subdivision of field service operations perhaps?

“It’s a great question and one I’ve been giving quite a bit of thought to,” replies Igou when I put this to him.

Whilst yes, servitization will mean some cannibalisation of the spare parts revenue, I don’t see that it’s going to destroy the spare parts business“With some of the larger organisations that were involved at our Aftermarket Conference at the end of October last year, we saw that even with companies such as SKF and GE Healthcare, i.e. major multi-national companies who have been working towards outcome-based services for some time now, still only about a third of their customers are on outcome based contracts and these are the organisations that are really at the forefront of this shift.”

“So whilst yes, servitization will mean some cannibalisation of the spare parts revenue, I don’t see that it’s going to destroy the spare parts business. There are always going to be some customers who won’t want these long term contracts and who will be happy to continue on a more transactional type of arrangement.”

“So I think the Spare Parts business will always have that transactional element and it will always be a profit centre. There will however, perhaps be a need for establishing some different internal relationships and some different processes may need to be considered moving forwards.”

The inaugural UK Spare Parts Summit will run on the 11th of April and will mirror the highly interactive peer-to-peer format of Copperberg’s UK focused field service event The Field Service Summit.

For more information on this event visit and last minute for registration opportunities visit: www.sparepartssummit.co.uk

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Glyn Dodd, Managing Director of Centrex Services looks at if we can re-invent the service supply chain cost model before it becomes to late... 

The fixed verses variable cost structure has long been debated in the industry – and continues to remain a hot topic.  With the evolution of technology, customers demanding innovation in service delivery and all the intelligence that can be derived in the provision of a break-fix service; the industry seems to remain adamant in delivering an outdated, antiquated delivery/cost model.

The big question is whether innovation within services can be delivered on a variable cost base? And can pricing be a differentiator in the evolution of the service supply chain?

As the majority traditional service supply chain continues to steadfastly remain fragmented, its fixed inflexible cost structures have become increasingly expensive against the context of the revenue they are earning today.  It’s these costs that are putting price pressure in the market; the change in the products and the simplification and reduction of the revenue attached to the maintenance has made the fixed price model and its legacy engineering costs outdated.

The anatomy of the fixed and variable cost

If we look at what the fixed service costs are, we see a combination of skilled engineers, external repairs, parts and logistics, as well as diagnostics – all of which often are still operated in the traditional unconnected way.

On the other hand, if we work within a re-designed (fit for purpose) connected infrastructure based model then variable service innovation and pricing modernisation becomes the norm  The customer pays by the type of activity that’s required, when it’s required with the correct skill to deliver. This means that when there is a requirement for a particular skill in the field environment then that’s what is assigned to the call, not an over-skilled or under-skilled engineer/technician/tech courier.

There will always be a need for various skill levels in the field, the difficulty in the traditional service supply infrastructure is its inability to respond and adapt to the rapid simplification of product and its continued incapability to deliver modern service

Is variable viable in the service supply chain?

Looking at anecdotal evidence within the market, the complex service call requires a senior engineer, which accounts for approximately 20 per cent of all service calls. The rest is split between the technical courier and the internal engineer. It’s within this ground where a variable cost model is far more effective and specific in responding to a customer demand driven ethos but only within a fit for purpose infrastructure model.

This allows the service provider to flex the cost base against the demand using the re-designed skill profile as required.  This in turn creates the environment for innovation and increases the responsiveness to the customer enabling the service provider to create a modern, intelligent service supply chain, while freeing valuable working capital on the core IP and differentiators.

These economies of scale can be achieved through aggregation.  While many of the larger service providers all have their own infrastructure, if one of those components is non-core it doesn’t add any differentiation. If it can be shared with multiple parties, greater value can be obtained for the end client where they do differentiate.

However, sharing infrastructure and the ability to aggregate can’t be orchestrated within a siloed organisation.  The industry needs to embrace more efficient ways of generating economies of scale, by taking the non core competencies in a connected supply chain and putting them into a service model that’s connected and can demonstrate aggregation and economies.

Can we do more for less?

The fixed verses variable pricing model is without a doubt a huge step change in the methodology, collaboration and delivery.  And the consequences are even greater.  To meet customer demands, major changes are required in the infrastructure to meet innovation and pricing needs.

To deliver the variable cost model, service providers have to make strategic changes that will impact almost every element of service, from repair centres to logistics providers and sub-contractors. In my view, this is the only way the industry can not just reduce costs, but continue to innovate, make sustainable margins within its break fix business and ensure it stays a sustainable and strategic component of its managed services proposition.

In the first part of this feature we looked at why a successful customer interaction strategy should be at the heart of every field service organisation as well as why companies shouldn’t be afraid of failure.

Now in the concluding part we see why you should think of bringing your customer service department and all other business divisions of the service supply chain, under one roof and why putting the customer first always is the key to ongoing customer satisfaction.  

Applying intelligence: the control centre & the service supply chain

Bringing your customer support service under the same roof as the other divisions of your business including field service dispatch, logistics and operations and other elements of the after service supply chain, is essential and needs to become the regular way of working across all industries if companies are to drive brand loyalty forward. This is the belief of Carolyn Wilson, services director of technology support specialist Centrex Services.

Carolyn comments:

“The current approach to after sales is a siloed one, contact centres often pass the customer onto the next silo if they are unable to resolve the problem themselves; washing their hands of the problem at the first opportunity.

“A control centre provides true added value to the customer, utilising a legitimate knowledge-base to not only resolve a high quantity of issues during triage, but controlling each step of the process from opening the call to booking the correct engineer, with the right part or loan product. The result; the SLA failure is eradicated.”

A good example of such a 'controlled service supply chain' approach in action is in the repair centre that Centrex Services provide for Fellowes, a manufacturer and marketer of business machines, shredders and office accessories, with a global presence. The business aim for Fellowes is to enhance the quality, efficiency and productivity of the workplace. Therefore it is key that their own after sales service meets the very highest standards and there service supply chain needs to be efficient and effective.

The Centrex representative responsible for the Fellowes service supply chain oversees calls from clients whose devices are both in and out of warranty. He is responsible from the outset in determining the type of call and then controlling the entire process. From the very beginning of the process he liaises directly with the client, confirming of the level and type of support required, identifying the correct engineer is allocated to the request and ensuring either a new machine (if the client is in warranty) or a loan machine (if the machine is out of warranty) is then available for the next day.

He will then personally telephone the customer to confirm the engineer’s call time and has responsibility for ensuring the engineer is on site at the agreed time. The whole process is only considered complete after a replacement or loan machine has been installed on the customer site and the customer has indicated that the issue has been resolved satisfactorily.

By adopting this type of approach where the customer is at the front of the solution, the entire way that after sales service calls are resolved is completely changed. Fellowes are certainly seeing the benefits of such an approach already, as EU after sales manager, Neil Cosgrove attests:

“Our partnership with Centrex Services ensures our consumers receive a seamless experience from the second a Fellowes shredder is purchased, and offers them total peace of mind through industry leading support service in the unlikely event they should require hassle free in and out of warranty support,” he says.

“On the occasions when it is not possible to source a replacement part the next day, Centrex has implemented a system which enables loan equipment to be made available the next day.”

The customer must truly come first in the service supply chain

By thinking out of the box and offering a loan service that is combined with dedicated control centre representative, Centrex and Fellowes are together treading a new path and it is this new way of thinking and approach to the service supply chain and service delivery that is yielding such positive results. By asking the right questions, the control centre is able to give  clients realistic expectations, while guaranteeing that whatever the problem is, the consumer will not be left stranded without an important piece of hardware overnight which could impact their business continuity.

Carolyn adds:

 “The loan service we offer shows the importance of listening to the needs of our customers. After an issue has been resolved following the deployment of a field engineer, the control centre sends a short questionnaire to gain an insight into how service can be improved.

“We found that supplying loan machinery during those periods where the malfunctioning machine is in need of in-depth maintenance was a highly sought after service. We have improved our after sales service due to the intelligence of the control centre and there is no reason why other businesses can not follow suit.”

Creating ongoing customer satisfaction

By creating a system where the customer’s needs are viewed as the most important factor of after sales support, it is clear that control centres can continue to offer high customer service levels on an on-going basis.

Ensuring triage is effective and efficient allows for the issue to be resolved as swiftly as possible, and by offering short-term hardware loans where required, a supply chain is created in which the customer’s satisfaction is assured and as a result both brand loyalty and reputation continue to be enhanced.

No matter which industry you are involved in, it is almost certain that at the very forefront of your business strategy is the goal to guarantee the very best levels of customer satisfaction.

It absolutely needs to be as in todays climate, where access to a huge array of information about you and your competitors is readily available, customer satisfaction plays an enormous role in the way consumers choose which companies get their business. 

For customers requiring after sales service, more often than not the first port of call is of course a contact centre.  Here, the initial call is logged and whenever possible, resolved.

But do service calls really provide customer satisfaction?  What happens when the problem is not rectified within the agreed time or if the service supply chain is too disjointed to efficiently resolve the problem? What impact can this have on your customers overall satisfaction with your company's ability to deliver the product or service they expect?

Successful customer interaction is vital

Carolyn Wilson, services director of technology support specialist Centrex Services, believes the contact centre process is becoming both outdated and ineffective for today’s technology support.

“It is clear that the role of the contact centre within the service supply chain has evolved rapidly; moving from simply offering support to becoming the driving force behind customer satisfaction. There must be control over the entire journey of the repair, not just an automated process to raise a service ticket. Service companies are now at the forefront of customer service, this unrequited lip-service is no longer just an afterthought.” she comments

She is certainly not alone in this view either. In fact a recent study by the Aberdeen Group showed that an incredible 96% of businesses viewed improving customer service results as their primary goal[1].

Carolyn explains further, “There are two major factors which directly affect the success of customer interactions, namely triage (problem identification) and the ability of the control team to resolve any issues as efficiently as possible.

“Equipping the staff to intelligently diagnose hardware problems over the phone and enabling them to take responsibility for the entire service process results in a huge increase in satisfaction levels, as invariably customers are contacting businesses to gain resolution as quickly as possible.”

This begins with the control representative understanding not only the nature of the call, but being able to identify where the part is located and accurately outline when a correctly skilled engineer can be sent to remedy the problem. In short, they need complete visibility of the service supply chain.

An inefficient control centre, can have a knock on effect across the whole of the service supply chain and will always result ultimately in dissatisfied customers.

An alarming statistic uncovered recently by The Service Council was that less than ten percent of field engineers dispatched had the part required to fix the hardware[2]. Clear evidence of a disjointed, fragmented and simply inefficient service supply chain. Instead, businesses favoured a system where engineers operate in territories and will therefore immediately be called out if the customer’s address falls within their patch; regardless of the parts they have to hand, or the personal skill-sets at their disposal.

Addressing this issue Carolyn added, “If a customer’s problem revolves around a part being sourced and fitted by an engineer, for the traditional contact centre to dispatch an engineer closer to the customer because it is more convenient, is unacceptable. This just shows it’s vital that changes are made to the way businesses view their own contact centres and move to adopt better control throughout the process.”

Why accept failure in your service supply chain?

Technology is evolving every year, indeed at an often bewildering rate. So it comes as a huge surprise and disappointment to learn that the vast majority of organisation are failing to apply the available and required layers of intelligence and responsibility to their contact centres. Layers which can provide the level of insight into the service supply chain that is so badly needed. Instead, we see that outsourcing this process remains a highly popular solution, even though as Carolyn points out, this is an ineffective method that is all too often cited as being the major factor in why poor service is being delivered.

“When contact centres are outsourced, businesses always run the risk of providing a service where staff processing customer calls have little knowledge related to the logistics of the service supply chain. Unsurprisingly, triage is inefficient and service level agreements (SLA) are often missed.

“I remain astonished that businesses continue to offer contracts which allow for a certain level of failure when it comes to meeting SLA’s, which is often the bar used to measure customer satisfaction.

“The current systems in place across the after sales service supply chain are not fit for purpose and the time for change is upon us. There will of course be resistance from those who believe the traditionalist approach works, but accepting failure is intolerable and should not be accepted by business leaders or their customers.” she concludes. 

Centrex, who have redesigned their service processes, began with increasing responsibility within its ‘control’ centre to create a service which is both valuable to the company while offering best practice to the consumer. It put's the 'control' centre at the heart of the service supply chain not a distant cousin looking on from afar. It is a sensible yet breathtakingly simple concept that hopefully others may follow.

Look out for the second part of this feature where we look at why bringing all elements of the service supply chain , including customer support centres, all under one roof is an essential aspect of the Centrex philosophy.