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After Sales
Service

A replacement part is missing and your entire production line is at a standstill? You have all spare parts in stock, just not the one you need? We are a management consultancy that specializes in supply-chain management and after-sales service. In times of falling returns in the new-product business, excellent after-sales service gains special importance. Companies that can bind their customers over the long term with smart, new service and maintenance concepts improve their sales and profits.

But what does a competitive strategy for after-sales service look like? We are experienced consultants who help you build up an efficient service organization with outstanding customer care that encompasses cost-optimized spare-parts logistics. Your perfect supply chain is our goal!

1/6After sales
service strategy

For innovative companies, after sales service is the quintessential growth driver. While many new products are sold at little or no profit, after sales service offers the opportunity to generate attractive revenues. In addition, big data, digitization, networked data, collaboration and connectivity are giving rise to ever more highly interesting digital business models. And yet many companies fail to exploit that potential. The Barkawi After Sales Service Pyramid has a structured approach with which you can become the number one in service – the service champion!

Barkawi Service Pyramide

After sales service ambition

Clear goals and a precise strategy help you steer your company in the desired direction. Do you strive to be the innovator that provides its customers with after sales service based on the latest technologies and tools? Or do you want to position yourself through price leadership? For service champions, after sales service accounts for up to 35 % of their sales, and that with margins north of 20 %! What are your ambitions for your after sales service in 2018?

'Where to play' – Where do you want to position your after sales service?
Should you concentrate on after sales service for products you have sold, or should you also offer the service for competitor products? What customers should you focus on? And which services should you offer for which products in which countries? Service elements defined in an after sales service catalog enable you to show the diversity, availability and price structure of your range.

'How to win' – What is your strategy for success?
If service offerings comprise internally standardized service elements that are easy to describe and implement and that the customer feels are tailored to its individual needs, they offer true added value! Well thought-out sales processes help your sales team sell premium after sales service to your premium customers! You should be able to offer your after sales services with standardized processes, and fully utilize the capacities of your service network in a well-balanced fashion.

'How to enable' – How do you put your company in a position to implement the service strategy?
Leading after sales service organizations clearly define the separation of responsibilities between the equipment and service organizations. In nearly all cases, companies have to build-up their service capacities, service sales, field technicians and support staff, introduce the right KPIs and use them to steer their organization. Global or regional functions and a select network of partners form their after sales service operation and help them deliver excellent service that sets them apart from the competition.

'How to succeed' – How do you transform into a perfect service organization?

Even when companies recognize the enormous potential that lies in growing their service business, the challenge still remains of further developing the company into a perfectly functioning service organization. All the activities required to do so have to be well planned with the necessary budget – but they also have to be executed efficiently and in the right order of priority. A key component for their success is getting staff and management behind the project and establishing an after sales service culture in the company.

Our After Sales Service Excellence Pyramid is a proven tool that we have used to help many enterprises multiply their customer-care business and service sales, and to become a service champion in their field!

Digital business models

Modern machines are being equipped with more and more sensors. More sensors mean more data – and that opens up whole new options. And not only that: the triumphant advance of sensor technology also brings manufacturers much closer to their end customers:

For a long time, makers of, for example a large printing press, would sell it to the end customer and that would be the end of the contact with them. Even if the machine got damaged, independent repairers would often do the repairs for the printing company without the manufacturer being involved. In the worst case, the manufacturer didn't even know its installed base. Nobody had ever heard of things like making money with after-sales business, Service as a Service, predictive maintenance and such like back then anyway.

Digitization opens up entirely new options thanks to the close relationship with the customer, because the manufacturer and its machine or hardware are connected up to each other digitally and constantly exchange data with one another about running times, performance, capacity utilization, breakdown risks or actual defects and so on. With all these data, innovative manufacturers that see their after-sales service as an integral component of their product and don't want to hand that over to the competition can turn it into a high-profit, forward-looking business. But what does that mean in real terms?

In the past, a customer would buy the printing machine it wanted to use. Today, more than one major German printing machine maker offers an entirely different business model: the customers of these manufacturers pay by page. Instead of owning an entire machine, customers today pay for exactly the performance they need.

New business models made possibly by the digitization of machines often exhibit the following basic parameters, for example:

  • Pay per use: The customer pays for how much it uses the machine, but no longer has to buy the machine itself.

  • Predictive maintenance: A performance guarantee ensures the customer 100% capacity utilization, because if defects threaten, they are recognized in advance by detectors and sensors before the machine comes to a standstill.

  • Cutting costs by optimizing utilization: Data exchange enables the manufacturer to make full use of its installed base of machines. Instead of an expensive machine not being in use, an internet-based service platform brokers out the unused machine capacity to other customers. Everyone involved benefits from the cost savings of this clever solution!

  • New after-sales concepts: Service technicians are on remote call 24/7, anywhere in the world, to help the customer in real time using augmented-reality glasses!

  • OPEX not CAPEX: New business models arising thanks to Service-as-a-Service are increasingly becoming transaction based rather than flat rate. They invoice fairly, inexpensively and per use, and CAPEX (capital expenditure) is turned into OPEX (operating expenditure). CAPEX refers to a company's investments in things like machinery, etc. OPEX refers to ongoing business expenditure "consumed" throughout the course of normal operations.


CFOs love it when high, often predetermined CAPEX of underutilized machine fleets turns into low, flexible OPEX that finally meets their actual needs!

Summary: New business models made possible by big data, digitization, interconnected data, collaboration and connectivity bring with them enormous benefits!

 

 

2/6 Customer interface management
in after sales service

The new mobile phone is all the rage! But then, all of a sudden, incredible amounts of fully unexpected problems arise with the battery. The customers storm the company website, and it collapses under the traffic. So they reach for their telephone to make a complaint – but the call center isn't geared for peak loads either! Incidents like this cost sales, customer satisfaction and may even damage your image. Perfect after sales service, on the other hand, can manage to leave a good impression and satisfied customers even in the event of annoying product defects, recalls or large-scale claims!

After sales support in various different channels

Companies are today faced with the challenge of having to offer individually tailored after sales support to different customer types and in different channels, such as telephone, e-mail, messaging, chats and social media – because expectations are high, regardless of whether the customers are end consumers (B2C) or resellers (B2B).

Providing technical know-how, expert experience and adequate support in real time are today seen as services that play a significant role in the purchase decision. Customer care is increasingly becoming an integral part of a product!

Multiple local service centers, or a single central one?

We help you by taking the standpoint of your customers: what after sales service do they want; what media do they want to be served in; what order volumes can you expect, and when? What makes more sense: several local service centers or one central one? Do you really need trained product specialists, or could you use less expensive employees with lower levels of expertise if you had a modern knowledge-management system?We help you make changes to your after sales service measurable by implementing a comprehensive KPI system, so that your customer care perfectly complements your product and helps move purchase decisions in your favor, while keeping your costs lower and your customers happier than those of your competitors!

Twitter and service training manuals for satisfied customers

An internationally successful company – one of the world's largest makers of consumer electronics – set itself the goal of reorganizing its call centers around the globe. Driven by growing customer demands and pressure to cut costs, the challenge was how to offer better service without costs rising?

1. Channel structure

The company only responded to customer inquiries by telephone and e-mail, while ignoring channels like its Facebook and Twitter accounts for customer service, despite their high usage rates. By setting up the relevant communication options, we were able to reach in particular consumers in the 18 to 39 demographic, and take a lot of pressure off the hotlines.

 

 

2. Workforce management

The organizational structure in the call centers was not tailored to the volume and type of inquiries received. By establishing virtual teams comprising a mixture of generalists and experts, who took care of both telephone and social media queries, we made sure that every after sales service incident was assigned to the right person.

3. Performance management

Strict monitoring of the major key performance indicators of the service, and a set of predefined measures helped the service center to react quickly when it deviated from its target values. For example, if the first-call-resolution rate fell (the share of service incidents that could be solved at the first contact), operatives were given more training or knowledge-base articles.

4. Knowledge management

The use of modern knowledge-management tools enables inexperienced agents to access expert know-how in real time, and to pass that expertise on to the customers. Now, consumers no longer have to wait for an overworked service expert to call back, instead they get a rapid answer to their question. Because reaction speed is the name of the game!

5. Use of modern technology

Modern technologies save working hours; from allocating calls to the right team to reducing the time required for research and documentation thanks to a modern ticketing system, and on to the possibility to e-mail standard solution texts to customers. Those hours are now available to the customers for improved after sales service.

These optimization levers led to a 12% rise in customer satisfaction scores. Without having to employ additional staff, 10 % more inquiries could be dealt with. That is what great after sales service looks like that deserves the name "service"!

3/6 Perfect repair management
in after sales service

Everyday business in after sales service: defective smartphones that impatient customers want to have replaced, wind turbines and machines at a standstill, a production plant that can't function because a replacement part is lacking. Or even worse: an emergency medical device in a hospital that could cost lives if it malfunctions – how do you, the manufacturer, deal with that kind of problem? There is nothing that improves customer satisfaction more than excellent repair management! Cleverly integrated into innovative service solutions, it also promises high profits.

Make or buy?

We help you find the best answers to many questions, such as what levels in your end-to-end repair process can you outsource in your after sales service, and which ones can't you? Is your front-end solution designed in such a way that errors that aren't actually errors at all are ruled out from the outset and don't make their way into the repair process in the first place ("no failure found")? Do you use social media to offer your customers the best possible self-help options? How do you want your ideal repair network to be structured? All these questions and more need answering and the right plans made if you want to create the perfect service!

Improve availability

We help where help is needed, so that you always have control over your service business and increase your customer satisfaction levels with optimized repair services. That is what happens when your machines have less downtime than those of your competitors, i.e. when you are the undisputed service champion! At the same time you keep the costs of repair and maintenance under control, and often even generate a sales plus with your after sales services.

Our network of consultants and employees from B2X (a Barkawi Group company!) guarantees that our know-how in the field of repair management is always up to date: B2X offers global repair-management solutions in the fields of telecommunication and consumer electronics. Leading edge customer care, state of the art!

Industry example: Medical technology

The background

An endoscope is made up of complex individual parts: wire winders, pulleys, fiber optics, brake rollers, screws and a micro camera as small as a speck of dust. A hospital cannot conduct examinations with broken endoscopes. Patients then have to wait for weeks for a knee arthroscopy – or go to another clinic. Your reputation as a manufacturer suffers. So in the worst case, sub-par after sales service damages your core product!

One of our clients was struggling with exactly this problem. At first glance, its heavily decentralized European repair network of workshops close to the customers appeared to be a guarantee of fast response times. But the reality of it was different: poor parts availability, big differences in the skill sets of the service technicians, cross-shipments of the devices from one market to the other, etc. led to massive delays in after sales service. The costs for equipment leasing skyrocketed.

Our solution

We designed an after sales service repair strategy based on an easily accessible regional repair hub at a location with qualified personnel in Eastern Europe. We also defined various repair types: while only an expert can repair a micro camera, simpler repairs like the adjustment of the endoscope sheath angle can be taken care of in a few simple steps by technicians. More professional, centralized planning and sufficient volumes enabled us to significantly improve the availability of parts and thus the entire customer care in the repair hub.

A standardized repair process in after sales service, tailored specifically to the device, reduced the internal processing times. With endoscopes now arriving at the hub from all over Europe, the volume of complex and rare repairs was large enough that the technicians were able to quickly acquire sufficient expertise to take care of them. Pooling was the secret to success here! The bigger distances for sending the devices to the hub could be more than compensated for with in-night deliveries and the time saved in the repair phase itself. High-volume consignments (bulks) that could then be taken care of centrally further lowered the service costs.

We supported this realignment of customer care from the concept design to its full operation, and it put our client in a position to set itself apart from the competition by offering better service at lower cost.

4/6 Spare-parts management:
The heart of after sales service

A mobile phone for 120 euros, a hospital's blood plasma refrigerator for 4,000 euros or a special machine tool for 700,000 euros – they all have one thing in common: as diligently as they may have been constructed, some of them will probably break down at some point in their life. And when they do, the customer expects the manufacturer to provide a fast and uncomplicated repair. That only works with efficient spare-parts management and perfect after sales service.

'Efficient' means having the right part at the right place at the right time. High warehouse costs have to be avoided just as much as long distances between the warehouse to where the repair takes place, or delays in the handling of orders. While a mobile phone can be repaired centrally and it suffices to have the replacement parts available within the space of three days, the parts needed to repair a machine tool have to arrive on site with the technician, at best immediately. But customer satisfaction is not an end in itself.

The margins that can be generated with spare parts in a well-planned after sales service concept are four times as high as with end products. So if you don't have the parts you need at your fingertips, you are missing a big opportunity.

Goal: Maximum service at minimal cost

We take a close look at your spare-parts management and service. On the basis of customer and market requirements and your service strategy, we investigate your procurement, order management, inventory planning and logistics handling, parts pricing, selection and management of service providers and supply chain controlling processes, and ensure that they are all ideally structured and dovetailed within a strategically smart after sales service process, so that your customers get the best possible service at the lowest possible cost.

Barkawi Impact Story: after sales machine tools

Modern machine tools are highly complex. It is not rare to have these machines running almost without interruption in a three-shift operation – because they are so expensive that you can't just go out and buy a second one. So downtimes are undesirable: a machine stoppage of one hour can quickly cost the manufacturing company many thousands of euros. What is more, machines designed or configured to customer requirements also contain many one-off parts. This means that the machine maker has to keep a large store of replacement parts, many of which are seldom or never actually needed. This is a real challenge for smooth after sales service!

The background

Our customer, a leading maker of machine tools, had acquired a number of companies and was faced with the challenge of bringing together the spare-parts management of three different divisions into one overall service concept, and making its spare-parts business more customer centric.

Analyses of the spare-parts management examined its performance: what did the customers expect from their spare-parts supply? What did the internal stakeholders expect of the service? Three separate warehouses in different European countries? Expensive local spare-parts inventories? Many questions, and even more challenges.

Our solution

To improve the internal processes and exploit synergies, we brought together the spare-parts management instances of the three divisions. We structured the warehouse network and delivery of the spare parts to suit the customers' needs, and we ensured the active marketing of spare party by Customer Service and integrated them into service products.

Based on our analysis of the customer needs, we defined, together with the customer service organization, the service levels that were to be offered to the customers in after sales. One customer group needed fast delivery but wasn't price sensitive, and one was very price sensitive but could wait a little longer for its parts. A network simulation showed how we could achieve the defined service levels, with as few warehouse venues as possible, small inventories and low obsolescence risks.

We set up further local warehouses (Forward Stocking Locations – FSLs) for a limited range of critical products, which could then be delivered to the machine within six hours of receiving the order/diagnosing the problem. In addition to this logistics solution, we transformed the order management and reorganized the inventory planning when optimizing the customer care.

The result: better, faster and cheaper!

The transformation of the logistics, the related processes and the overall after sales service concept enabled supply-chain costs to be reduced by 22 % per year, while at the same time making sure that 98 % of the customers in western and central Europe got their parts within the requested time. With the support of the network of FSLs, express freight options and flexible order management, critical orders can now be delivered to most of the customers in Germany, Benelux, France, Austria and Switzerland within three to six hours. That's what we call really good after sales service.

5/6 Workforce management
in after sales service

After a severe thunderstorm, 500 windpower plants around the country reported faults, and that during the summer vacation, when the service team – which was chronically understaffed anyway – was further decimated. The technicians of other service providers had no more capacity, because they were taking care of service orders from direct competitors. And as if that weren't enough, the own customers were calling every half hour and demanding that their disruption be remedied NOW – or the next call would be from their lawyer. A true challenge for after sales service!

Rectify unpredictable disturbances

Alongside the more predictable everyday business, there are often also incalculable problems to be dealt with in workforce management. When these extreme situations arise, the individual wheels of call center, spare-part preparation and scheduling of the service technicians all have to mesh together precisely, like the cogs in a Swiss watch. There is nothing more nerve-racking for a customer than not being able to get a machine up and running again because a part is missing, or – even worse – because the technician doesn't know what to do.

Digitization between the human being and technology

We scrutinize whether your 'first-visit completion' and 'cost per visit' lag behind those of your competitors. We find the optimum staffing of your team, based on your technician profiles, we don't shy from questioning longstanding shift and working-hour models and we sound out the software jungle for solutions to your requirements. Are features like the IT interface to spare-parts management, or the real-time retrieval of technician capacities done well? At the end of this process is your individual, ideal quality standard for your after sales service – with reduced costs, more sales, motivated staff and a maximum of customer orientation.

Industry example: Manufacturer of windpower plants

The background

Hardly anything is as complex as servicing a windpower plant: rotor blades, transformers, generators and other components all have to be serviced at regular intervals. To do so, specialist know-how is required, and innumerable labor-law regulations have to be adhered to. For instance, a service technician without a minimum of training in electrical engineering is not allowed to even switch a windpower plant on or off. Another sticking point are the large distances between the plants. It is not uncommon for service technicians to have to drive for several hours to get from one plant or wind park to another, which of course means a large share of unproductive working hours. So it isn't easy to put together an optimized concept for after sales service!

Our customer – one of the world's leading makers of windpower plants – was faced with just this challenge. We analyzed its workforce management together:

We closely investigated every step of its after sales service, from order acceptance to spare-part and shift planning through to order execution, to then subsequently focus on two main topics that promised particularly large optimization potential: the skill levels of the technicians and the shift and working-hour models!

 

 

It soon became apparent that teams often comprised two highly-qualified technicians that did not complement each other with their skills, but overlapped. This meant that these service teams could only be commissioned with certain specific service orders, which reduced the flexibility of the entire service organization, without the management realizing it. That is not what perfect after sales service looks like!

Our solution

We replaced these teams with mixed-expertise teams. This meant that the service teams became more flexible with regard to maintenance and repair orders. For example, the industrial climber can service the rotor blades while the second technician takes care of the fault in the gears. We also found that strict shift and working-hour models lowered the efficiency and productivity of the service teams. Because the technicians often had to cover large distances between the plants, a large percentage of their working hours was non-productive.

It often occurred that travel times accounted for more than 50 % of the working day. Furthermore, many service orders were not completed until the following day, because the working-day model forced the technicians to stop in the middle of their work, in full awareness that they would have to spend several hours on the road again the next day to come back to the plant and finish the job. An efficient after sales service with clever workforce management does that better.

A new shift and working-hour model reduced the number of working days in the week from 5 to 4, but increases the working hours per day from 8 to 10. That led to a lasting increase of the productive working hours of almost 10%, and the new overtime rule further improved productivity by more than 5 %! Better and cheaper – that is the win-win of smart, modern after sales service!

Barkawi Booklet After Sales Service

From just another after sales provider to a leading service champion

After Sales Service – A guideline for companies that want to turn opportunities into measurable successes

Read more

 

 

6/6 Warranty management
in after sales service

Three years guarantee for a new machine. 'Excellent' the customer thinks. But for the manufacturer the situation is different: it can get costly! Why does your company even offer guarantees? Why aren't some components excluded from your manufacturer's warranty? Is a guarantee purely an obligation for you as a manufacturer – or is there an opportunity in there somewhere? The main objectives of efficient warranty management and intelligent customer care are to keep after sales service incidents to a minimum and to deal with them at the lowest possible expense, while keeping the focus on customer satisfaction. But poor utilization of technician capacities, plants that are difficult to service, a lack of upgrades, varying warranty periods and missing spare parts are just some of the many challenges that the everyday business holds in store.

We find out together with you which of these challenges you want to master first – because they drive up your costs! In doing so, we ask whether different warranty periods and terms are really needed in each different country. We want to know why your best engineers generally work on developing new products, rather than on upgrades or retrofits. And we question why no service technicians are involved in the design of new products (design for serviceability).

And furthermore, you don't have to do everything yourself. Many of our customers today put their trust in a clever mix of own and third-party services (make or buy). This conscious decision is made possible by the fact that our customers have transparency over their geographical technician coverage and the required technician profiles – and of course the costs they involve – so that you can keep the after sales service promises you make.

Industry example: Agriculture

The background

At last the waiting is over: the corn is ripe, the weather is dry – the harvest can begin. All the more frustrating when the new trailer for transporting the crops chooses now to break down. The farmer goes into a cold sweat and puts pressure on the dealer to get him a replacement as soon as possible. After all, the trailer is under guarantee! If you don't have good after sales service with strong warranty management in such a situation, things can get nasty.

Among the many challenges for our maker of agricultural trailers was that the starting date of the warranty period wasn't sufficiently documented. For the farmer there was no question: from the day he bought it! But the manufacturer only knew the date it delivered the trailer to the dealer. Nor were there clear guidelines for the price up to which the dealer could offer a swap, or from what price the manufacturer had to be involved in the assessment. To aggravate things further, the Russian dealers didn't fully understand the English-language warranty terms.

 

 

So all in all, our agricultural machinery manufacturer struggled with high warranty costs and dissatisfied customers. Were the reasons for the many warranty cases to be found in product development or the production process? Were there quality problems among its suppliers – or did the customer just not know how to use the trailer properly? Good after sales service doesn't work like that!

Our solution

In workshops with Sales, some of the national managers and selected dealers, we succeeded in designing a three-stage warranty program with a clear strategy, well-defined processes and efficient performance management – a clever overall concept for individually optimized after sales service. For instance, we defined what the warranty should include – and what it shouldn't – and where the dealer had to have freedom for goodwill. We determined IT tools for holistic data integration, established simple front-end diagnosis options and defined simple return options.

By determining KPIs, reports and communication rules, we also ensured that problems could be analyzed and eliminated immediately in the future. We also laid out clear guidelines for proactively remedying series errors in machines that have already been delivered. In addition to a reduced number of warranty inquiries and lower total costs for warranty cases, our customer was also able to significantly improve the satisfaction levels of its trading partners and the end customer farmers! With this perfect after sales service, not only the corn is in the bag!

Barkawi Ansprechpartner für After Sales Service

Short communication paths
for a brilliant
After Sales Service

Get in touch:

Dr. Andreas Baader
Managing Partner
andreas.baadernotvisible@barkawinotvisible.com
Phone +49 89 - 749826 - 712

Oliver Bendig
Partner
oliver.bendignotvisible@barkawinotvisible.com
Phone +49 89 - 749826 - 813

Barkawi Management Consultants
Office Munich
infonotvisible@barkawinotvisible.com
Tel +49 89 - 749826 - 0