Service leaders face enormous daily challenges from customers, their supply chain, partners and internal stakeholders. To me, balancing these demands in the current environment seems to be a balancing act largely based on trade-offs. To do this successfully, I think you need more accurate visibility of your business. This includes more transparency and trust in data, its insights and in particular, your customer proposition and status, financial position and labour and supply chain networks.
This demands a focus on delivering value for the customer. In a recent Vanson Bourne market study, research showed that 95% of the 500 service organisations surveyed agreed that they expect to trade off between the cost of parts and providing good value to their end customers. The reality is that companies are adapting to higher costs, rising at a rate no one would have anticipated a couple of years ago.
With tightening purse strings across businesses, services will likely not be afforded much wiggle room. We debated this point and the possible choices and actions you could take in our LinkedIn Live broadcast. I encourage you to watch and download a copy of the supporting e-book, “Build a Resilient Aftermarket Service Business.” It contains a deep dive into the state of aftermarket service.
The broadcast was a lively debate with contrasting perspectives on the implications of the Vanson Bourne research findings; for me, the recommendations on how to focus on service revenue, margin and urgent review on service contract leakage and the approach to parts pricing especially resonated with me. Likewise, identifying waste and unnecessary storage in the supply chain was an action. I was impressed with how you might locate this waste using existing data.
Suppose you are starting your budget planning for 2024 soon. If that is the case, I encourage you to reflect on the viewpoints from the 500 service and supply chain leaders, CIOs and CFOs found in the research. Join in the conversation with us on what actions you can take now and what you should be planning to focus on in what remains of 2023 and heading into 2024.