World Trade - August 2008 - (Page 50)

SUPPLY CHAIN WORKING CAPITAL Service lifecycle management framework Service Discovery - Customer support - Service sales - Monitoring - Predictive support Service Discovery Service Fulfillment Service Fulfillment - Help desk and self service - Scheduling and dispatch - Depot repair - Parts planning and network optimization - Reverse logistics Service Knowledge Service Knowledge - Customer repository - Repair documentation and BOM management - Committment management - Customer needs and quality feedback - Design for serviceability t Bus iness Managemen Business Management - Profitable service modeling - Service portfolio management - Visibility into network performance Source: AMR Research, 2008 more than 50 percent of the product is manufactured by partners. Automotive and consumer product companies have the added challenge of working with a network of dealers and independent service organizations to meet the end-customers needs. For suppliers to original equipment organizations there is an added conflict where both suppliers and OEMs are pursuing service revenue and a long-term customer relationship. A Service Lifecycle Management framework to deliver performance repair and installation, as well as optimization of these processes • Service Knowledge – Keep track of what assets exist and the service agreements in place. Communicate valuable data to product development for continuous improvement • Business Management – This ensures the profitability of service contracts through financial reporting and analysis, with scenario analysis on optimizing the service network Conclusions A large defense prime contractor summed it up well: “PBL contracts demand more data to be successful. It’s necessary to mine that data deeper, get cost roll-ups on total systems versus components, identify redundancy, analyze mean-time-between-failure reliability data, and optimize spares and service technician placement.” Most manufacturers we speak with emphasize the importance of process and organizational change supported by technology to scale and institutionalize the behavior, as well as to add processing and decision support capability that would otherwise be unavailable. The AMR Research service lifecycle management framework (SLM) is a guide toward where opportunities for process and technology improvements lie. The SLM framework includes the following processes: • Service Discovery – Determine when service is required through activities including equipment monitoring and mobile ﬁeld service communications. • Service Fulfillment – Execute on service from planning and delivering spare parts to conducting 50 WORLD TRADE AUGUST 2008 Customers are looking for complete solutions to their business process problem. Manufacturers are responding by combining original manufactured product with continued post-sale services to provide total value. Many of these contracts are paid based upon ﬁnal performance requiring the manufacturers delivering these services to take a total lifecycle view of the products and services delivered. Not all contracts are completely performancebased nor is every customer prepared to accept one. It is an evolutionary process with both providers and customers at different maturity levels. Success requires a clear understanding of the organizational changes required, inclusion of partner networks, and the use of technology to optimize and scale the business. WT Michael Burkett is Vice President Value Chain Strategies AMR Research. For reprints of this article, please contact Cindy Williams at williamsc@bnpmedia.com or 610-436-4220 ext. 8516.

Table of Contents Feed for the Digital Edition of World Trade - August 2008

World Trade - August 2008 Contents Weathering the Storm Helping the World’s Poorest Nations Benefit from Global Trade Supply Chain Watch Tradewinds World Trade’s Top U.S. Trading Partners LTL Shipping ‘On the Fly’ Air Cargo Flies a New Heading Getting More from China Sourcing Why 3PLs Need a Seat at the C-TPAT Table Performance-based Supply Chains Drive Total Lifecycle Value SmartWay Navigates Sustainable Transportation Around the World in 80 Days—Hours—Minutes

World Trade - August 2008

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