After-sales: The other side of the supply chain
By Howard Baldwin
Most manufacturers anticipate a certain number of replacement parts for their products based on normal wear, and order materials accordingly. But what happens when there is an unexpectedly high number of failures? Without the right information about repairs and replacements—supplied from support requests or by field technicians—you risk losing customers.
In Summary:
| • | Work with distributors and resellers to create ways to exchange service and repair data. |
| • | Set up Web- and e-mail–based systems for consumers to file complaints. |
| • | Expect to work with both structured and unstructured data from multiple sources. |
File this under "strange problems with cars": Even though I live in California, occasional cold weather had a tendency to set off my car's horn. The dealership's response was to replace the horn—twice. Only on my third trip did a mechanic rightfully conclude that the problem wasn't the horn but rather the rubber cap mounted atop the horn in the center of the steering wheel. As it got colder, the rubber contracted, which had the same effect as a hand on the horn.
You could also file this under "supply chain anomalies." Most manufacturing company executives think more about what components they need to build products than what components they might need to service them. The purchasing department can anticipate how many replacement parts to order based on normal wear, but how does information technology (IT) create a system that confirms the accuracy of this estimate? As Alain Waha, managing consultant for London-based PA Consulting, which specializes in supply chain and manufacturing issues, notes, "There are really two distinct ways of thinking about what you need: daily business routine and crisis management."
Without accurate information about the need for replacement parts, manufacturers risk antagonizing their customers, who might have to wait for repairs. And if information about design or production problems doesn't get back to the manufacturers so that they can correct them, they may lose future sales as well.
IT's challenge in serving the after-sales supply chain is that it cannot fully automate the processes. Therefore, IT must consider three things: integration with the systems of resellers and distributors; communication channels for customers; and analysis of data through business intelligence. In addition, IT must account for human intervention and analysis.
Integration with third-party systems
If distributors and resellers cannot easily communicate service information back to the manufacturer, the manufacturer runs the dual risks of running short on parts and being unaware of quality issues. Thus, it's crucial that a system pass information from the distributors' field technicians back to the distributor and then to the manufacturer. That information should include not only numerical codes for typical problems, so that they can be tallied, but also descriptions of any unexpected issues. Whether you do this automatically through Web services by using XML or by routinely exchanging Microsoft Office Excel spreadsheets doesn't matter. Confer with your distributors' IT departments to determine the smoothest method of exchange.
It's important to capture customer information as quickly as possible, says Mike Newkirk, industry marketing manager for manufacturing at Cary, North Carolina-based SAS, a developer of business intelligence solutions and a Microsoft Gold Certified Partner. Providing service technicians with smartphones or personal digital assistants (PDAs), for example, allows them to upload information on the spot, so that you can identify problems that much sooner.
One way to entice distributors to provide information is to offer to share the data you collect from all the service technicians. Distributors in different areas may be encountering similar service issues. If they each give you a list of key issues, you can consolidate those lists, identify trends, and redistribute the consolidated data by e-mail or post it on a portal. "If a technician shows up with knowledge of what's likely to have failed, and has the right parts on the truck, that increases field technician productivity," says Mark Vigoroso, chief research officer for service chain management at the Boston-based analyst firm Aberdeen Group.
Customer communication channels
Make it easy for customers to share their feedback and requests, say, through a Web form or a dedicated e-mail address. If there's an unresolved problem with a distributor, the consumer may want to contact the manufacturer directly.
You might also set up a system on your Web site whereby customers can submit their warranty information. Just be aware that they may balk at doing so, because they loathe being on one more mailing list. "Every situation needs a creative solution appropriate for your product and industry," PA Consulting's Waha notes. "If you give the customer value, they will participate in your system." For example, in return for supplying information, you could offer six months of free product support, a rebate on an additional purchase, or a free replacement component of some kind.
When it comes to linking customers to your supply chain, consider the practices of the software industry. Software developers incorporate customer feedback into new versions of their products so that customers will buy them. That's why the industry has special-interest groups, conferences, and multiple technical support options to gather information from customers.
"We have a cross-functional team that meets periodically to prioritize these disparate requests," says Dan Whelan, senior vice president of worldwide support for Irvine, California-based Epicor, a developer of supply chain and service automation software, and a Microsoft Gold Certified Partner.
How to handle unstructured data
Right now you're probably wondering how to compile and analyze all this data so that you can identify supply chain issues. Part of the problem is that some of the data is structured (the technician's numerical codes) and some of it is unstructured (customers' messages from the Web site). Compiling, interpreting, and responding to it requires a human touch.
Once you have consolidated the issues from the various sources, you can track them in a database, against which you can run traditional business intelligence software to identify problems. The point of this effort is not only to improve overall product quality but also to prevent disastrous consequences. Imagine the public relations nightmare Ford and Firestone could have avoided—not to mention the dissolution of a long-standing partnership—if they had shared accident data involving blown tires and rollovers.
Many software developers are tackling the after-sales problem with solutions that range from parts tracking and warranty processing to remote diagnostics and mobility applications for field service operations. Aberdeen Group currently monitors 220 such solutions, according to Vigoroso.
But those applications don't solve the integration issue. In fact, their very proliferation may make it worse. It's possible that one day all data, whether in e-mail or on the Web, will be configured as XML components and consolidated that way. Until then, you'll need to devote the time to integrate service data to take care of your customers.
"Ignoring quality issues can destroy your brand," insists Waha. "Your systems should encourage early customer feedback, and engage them before their perception of your company is irretrievably damaged."
Bio: Silicon Valley-based technology journalist (and picky consumer) Howard Baldwin is a contributing writer to the Microsoft Midsize Business Center. His work has appeared in CIO, Optimize, and InfoWorld, among others. .
