Manufacturers Can Drive More Revenue and Profitability through Integrated Services Business

Many of today’s manufacturing companies consider themselves designers and producers of products rather than providers of integrated solutions to meet customers’ broader needs. Too often we see manufacturers view their service operations as ancillary businesses separate from, and by no means equal, in importance to the “core” product business. And, that mindset is not only outdated but risky in today’s market.

Whether you are a manufacturer of consumer goods or complex industrial products, there has been a clear migration toward service offerings. As products become commoditized and the customer expectations continue to grow, manufacturers cannot ignore the importance of producer and customer interactions and service over the lifetime of a product.  Protecting the business through service excellence is one way of keeping out the competition while improving customer service and loyalty, and improving the bottom line.

A Deloitte Research Global Service and Parts Management Benchmark Study suggested that of the manufacturing companies interviewed, service revenues averaged more than a quarter of total revenues and delivered 46 percent of the profits. And that, for many of these manufacturers, there would be little or no profitability without a service business.

While most companies are eager to improve their service and parts businesses, many continue to treat service functions as an afterthought for a variety of reasons including a lack of business buy-in, inefficient technology systems to manage service functions and poor execution.

So what can be done? Companies can only increase their level of service if their back office is focused on registering and controlling many of the daily service processes. The only efficient way of doing this is using a Service Management solution that is fully integrated with a back office ERP as Microsoft Dynamics AX. Using Microsoft Dynamics AX as the core ERP with an advanced service module such as Asset Services Management manufacturers can:

  • Smoothly Manage Complex Contracts and Warranties – Specify and execute on end-to-end payment processes and accurately define contract and warranty obligations, using forms and notifications that adapt to specific needs.
  • Maintain One Coherent Schedule for Equipment – Schedule multiple dates for maintenance of different parts within one calendar and quickly view and adapt general timelines and specific dates.
  • Bring Together Service Activities Scheduling and Management – Establish recurring equipment maintenance scheduling, incorporate ad hoc checks and repairs, and manage tools available for both internal and customer services.
  • Monitor Parts Inventory with Greater Confidence – Track spare parts and eliminate “disconnects” to optimize inventory levels—you’ll have real-time visibility and service process integration with general inventory management.
  • Increase Customer Satisfaction and Reduce Downtime – Predefined, yet flexible workflows and automation cover all aspects of maintenance and repair, from accurate quotes, dispatch, and job processes through follow-up notifications.

We believe that the service and parts business is often overlooked by many manufacturers. Not only is money being left on the table but service levels and customer loyalty can suffer. If this is true about your organization and you feel you’re at risk, contact the team of manufacturing experts at Columbus to talk more.

By Norman Carmichael, Manufacturing Practice Director at Columbus. Columbus is an award-winning Microsoft Dynamics ERP Partner, serving companies around the globe in the food, retail and manufacturing sectors.

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