After Sales Service . . . Supply and support for the long-term

By Asif Saeed Assignment No: 1

Submitted for the course Spare Part Management (SE9004) Department of Terotechnology School of Technology & Design Supervisor and Examiner: Prof. Anders.

TABLE OF CONTENTS

PageChapter 1

Supply and support for the long-term

1.1 Background..............................................................................................................4

1.2 Services................................................................................................................5

1.2.1 Service Quality......................................................................................................5

1.3 Customer Care and the Service Manager.................................................................6

1.4 Customer Satisfaction Modelling............................................................................8

1.4.1 Customer Satisfaction and Customer Loyalty......................................................8

1.4.2 Customer Assistance to Deliver Maximum Satisfaction .....................................9

Chapter No.2

After-Sales Service & Technical Support

2.1 Product Support and After Market Services..........................................................10

2.1.1 Technical Support ..............................................................................................10

2.2 After-Sale Service is never static.........................................................................11

2.2.1 After Sales Services And Customer Satisfaction................................................11

2.3Customer support Vision.........................................................................................12

2.3.1 Customer support policy.....................................................................................12

2.4 Service & Maintenance..........................................................................................12

2.4.1 Service Support Contract....................................................................................13

2.4.2 Maintenance after Sale........................................................................................13

2.4.3 Maintenance Objective.......................................................................................14

2.4.4 Spare parts and accessories.................................................................................14

2.4.5 Repair services for lifetime accuracy..................................................................15

2.4.6 Training services.................................................................................................15

2.4.7System Upgrade Services....................................................................................15

ABSTRACT

The Main objective of this study assignment is to gain improved understanding of the factors

present in after-sales activities and the role of such factors and elements in enhancing business

strategy that in turn boost business and economy. The another main objective of this

assignment is to gain a better understanding of how a supplier could successfully manage its

“customer care” activities in the today dynamic market by planning a right strategy under

given circumstances and constraint so a realistic and adoptable approach can be implemented

successfully. After sales service industry have received little systematic and scientific

approach. The study described herein focuses on after sales aspects of business-to-business

activities in the industry. The term, “customer cares” is used extensively in the study as an

entrance into the world of after sales activities. The concept of care includes activities related

to maintenance and preventive maintenance services. Processes and measures of customer

satisfaction and loyalty provide two critical aspects of this study. Total customer satisfaction

and loyalty were then related to each other in order to compare the separate and combined

characteristics to make an appropriate approach in providing service. This provided the

reference basis and base line for analysing, forecasting and understanding how a customer's

behaviour might change relative to their level of satisfaction with the service level.

Chapter No1. Problem Introduction Motivation and Objective.

The hardcore for any successful industry that provides service after sales is to

have such policies that maintain close relation with their customer for better

support.

Author is motivated to write this assignment in conceptual way and for this purpose a new

approached, authors ideas and past experience is adopted to highlight and study those factors

and elements, to come up with good study result and conclusion; different product

manufacturer achievements and their strategies in this business area of after sales service is

included, so that different perspective can be studied and visualize the concept of true services

and understand customer satisfaction and loyalty.

Chapter No 1.

1.1 Problem Introduction Motivation and Objective.

The hardcore for any successful industry that provides service after sales is to have such

policies that maintain close relation with their customer for better support .The idea of linking

service value and customer satisfaction has existed for a long time. Total customer

satisfaction has been studied and recognised as an important factor in the management

studies; indicate that there are links among customer satisfaction, customer loyalty, and

profitability. During recent years, there have been studies that have established mechanisms

that attempt to link customer satisfaction and customer loyalty. Many studies additionally

attempt to establish connections between service quality, customer satisfaction, customer

loyalty, and profitability.

To cope up with the current requirements and challenges of after sale service the supplier’s

should adopt new way of managing after sales phase in a typical project environment.

Furthermore, this study also discusses the impact of care on customer satisfaction. From the

customer's point of view, also we will find out the reason the why a product is not as good as

another this is simple to understand because companies fail because they are unable to deliver

total customer satisfaction. Without new products and after sale services a company cannot

satisfy customers’ high-tech demands. Developing a new device and product is not enough;

companies must be able to create good quality products with after sales service support.

The task and the main objective of this study assignment is to understand the concept of after

sale service support, concept, vision and policies, total customer satisfaction concept, product

warranty issues, contractual requirements, threats, weakness, strength and opportunities

analysis, customer care and service manager relationship and responsibilities, spare part

management, challenges in service chain management are the key issues of this assignment.

Author is motivated to write this assignment in conceptual way and for this purpose a new

approached, authors ideas and past experience is adopted to highlight and study those factors

and elements which are mentioned above, to come up with good study result and conclusion;

different product manufacturer achievements and their strategies in this business area of after

sales service is included, so that different perspective can be studied and visualize the concept

of true services and understand customer satisfaction and loyalty.

Service defines as follows:

“Service is any act or performance that one party can offer to another that is essentially

intangible and does not result in the ownership of anything. Its production may or may not be

tied to a physical product.”

OR

“Service is all of the activities undertaken by the firm to provide value in use over time,

measured by increased customer satisfaction with a tangible product or series of products”.

Disposition:

Chapter No 1.

This chapter presents the

Chapter No 2.

Chapter No 3.

Chapter No 4.

Chapter No 5.

Chapter No 5.

This chapter presents the conclusion and summary based on the results of the study, author personnel motivated thoughts and experience

Chapter No 2. Supply and support for the long-term

After Sales Service

“Service is of course one of the major after market support and it is a prime area requirement for our customer’s truck operation. Service Department is completed by special tools, genuine spare parts, and factory trained technicians” (Volvo trucks).

Chapter No 2. Supply and support for the long-term

To have long term relation ship with customer after sale, company should offer a complete

after sales service program to satisfy customer ... The aim is to reduce the risk of

untimely and costly equipment failure as well as a minimum of disturbances and

downtime. In order to achieve continuous good performance after sale the

company should have some preventative maintenance offer comprises of highly

skilled and experienced service engineers or professionals , located close to

customers or centralized support system , carry out commissioning, trouble-

shooting and on-site service.

Service Provider Customer End

Support Team Professional Manpower 24 Hours technical support Stanby for emergency issues Motivated Environment

Feed back loop from customer to service provider and vies versa

Fig 2.1 After sales service blocks showing criteria and responsibilities at both ends

Development Team Personnel Development Performance enhancemnet Resources management Selection/ recruitment Skills enhancement

Organisation Personnel Development Performance enhancemnet Resources management Appropriate maint strategy Fullfill all contraectual requirements Maintain failure or history data

End user

Follow all procedures for Better usage of the product (Safety and Operational)

Avoid misuse and mishandling Report when problem occcurs

The figure showing relationship between provider and customer, the basic blocks

at each end make it more clear about service phenomena and both parties

responsibilities, this can also be consider in making a strategy for after sales

service requirements, so that it can be planned before the product launched in

the market, we can notice from the figure above showing a feed back loops from

service provider to customer end, this is because for continues and long lasting

support, there should be customer feed back for the service provider to improve

and enhance their service, this also service as the bridge between two parties

and reducing the risk of communication gaps and helps to introduce healthy

environment between customer and client relationship.

After sales Support

There are some basic issues which are the foundation of after sales support

1. Warranty

2. Technical support

3. Contracts and agreements

4. Spare parts availability for the system after sale

Marketing the system is not enough, the main issue after sale is to have a long and

comfortable relation with the customer, this will be only possible when the provider gives his

full attention to his customers needs , as customer is the asserts for any company or

organization, building a true relation ship is only possible when the company fulfil all the

contractual requirements as agreed but also provide comprehensive support to his clients up to

his satisfaction, to keep the relation ship maintain and healthy for a long term is only possible

when both parties full fill their requirements, today as there are lot of manufacture and

industries in the market, companies have several more responsibilities then before, that to be

fulfil and promptly response otherwise, it is hardly to maintain relationship, as it depends and

vary on industry to industry, but many things are common in after sales support. After sale

support is the foundation of boost sales, satisfied customer creates a chain that in turn makes

bridge between customer and service provider and indirectly boosts up sales.

Chapter No 3. After sale service Vision and Policies.

The True Test of Customer Care

“Customer satisfaction is far more important than profits. We have realized that making

customers satisfy with our reliable and fine services will eventually boost our sales and

profits.” —Masamitsu Sakurai, Ricoh Group General Manager and CEO.”

Chapter No 3. After sale service Vision and Policies.

Services and service Quality.

Manufacturing and service operations have some common characteristics. Services have been

an integral part and element of companies. Quality of service is frequently realised better

when it is missing in the service rather than when it is present. It is very important to keep the

customer updated of the possible changes that take place in the organization so that customer

can plan his strategy accordingly. The main objective of many organizations is not only boost

up sales but provides quality of service up to customer satisfaction, as services create an

increasing proportion of company profits in many industries.

Customers evaluate services based on the purpose of the service, priority, importance

necessity, results, cost, and risk. In order to have appropriate expectations, a customer should

have a full picture of the purpose of a job in their mind. Depending on the customer’s

perception and idea, the necessity of a service can vary.

“ Product or service quality requires a total system, which identifies customer requirements,

which designs the product/service to those requirements and which establishes a production

or service delivery system to produce in conformance with the specifications”.

Determinants of service quality are:

1. Reliability – consistency of services

2. Responsiveness – willingness or readiness of employees to provide service

3. Competence – possession of required skills

4. Access – approachability and ease of contact

5. Courtesy – politeness, respect, consideration, and friendliness

6. Communication –keeping customers informed and listening

7. Credibility – honesty, trustworthiness

8. Security – freedom from danger, risk, or doubt

9. Understanding/knowing the customer – making the effort to understand a customer's needs

Strategies, Infrastructures and Tools

Companies should develop expertise in the following areas to create an exceptional

service experience and an efficient service management.

1. Realize Customer Service Requirements

2. Design and Build good quality products for Serviceability

3. Leverage New Technologies for Service Management and Delivery

4. Integrate Partners into the Service-to-Profit Supply Chain

5. Continuous improvement in product and service and quality through customer feed back

6. Prompt response to customer site and support by all available means.

A customer’s perception of value generally is the result of five types of interactions

with a service or product provider. First among these is during the buying process

the sum of activities involved in an actual purchase. The remaining four, however, are

directly affected by the reach and quality of an organization’s after-sale capabilities:

• After-sale service and warranties assure customers that the capabilities they desire

in a product or service are fully and consistently available. For example, companies

can provide a replacement car to customers during service periods.

• Repurchase and upgrade policies encourage customers to dispose of old products and

migrate to new generations of products. Progressive policies in this area also make used

products available for resale or for recycling spare parts.

• Customer diagnostics—involving the customer in product design or improvement—

can create value for both parties. As products become more intelligent, customers

can play a greater role in resolving problems.

To excel at service management, companies must understand and anticipate customers’

desires for the above after-sale capabilities. New forecasting, database and communication

tools can be applied to capture, model and disseminate after-sale service information. In the

end, peak customer satisfaction is maintained, while expensive, unscheduled service visits are

minimized.

Five basic customer value lessons are:

1. Customer defines the appropriate product quality, service quality and reasonable price

2. Customer value expectations are formed relative to competitive offerings

3. Customer expectations are dynamic, always demanding

4. Product and service quality must extend throughout the channel

5. Maximising customer value requires total organisational involvement and commitment

1.4 Customer Satisfaction Modelling

The nature of customer care is very much service oriented as most goods are consumed at the

same time as services are experienced. To satisfy a customer, the supplier needs to have the

services that the customer requires. If the customer perceives a service in a certain way, but

expected less, then the customer is satisfied, as the formula in equation 2 shows. The

customer wants to know that they get the required attention.

A service firm that is able of project a caring image and backing that image with substance is

likely to success

Customer Satisfaction = Customer Perception + Customer Expectation

1.4.1 Customer Satisfaction and Customer Loyalty

Customer satisfaction means that the customer's needs are met, product and services are

satisfactory, and customers’ experience is positive. According to the definition, customer is

satisfied when only minimum has been done for the customer. If a customer is said to be

satisfied or happy about a purchase, the customer's overall feeling and experiences must be

neutral or positive. Customer satisfaction itself is not an indication that there will be customer

retention. A loyal customer is a customer whose expectations are met or exceeded and they

proactively refer the supplier. The nature of loyalty has changed over time in society;

nowadays it is based on mutually earned loyalty by the continued delivery of superior value to

the customer. Customer loyalty can be measured and analysed to minimise customer turnover

and to increase the growth of key accounts. Fulfilling customer's requirements, customising

products or services to meet customer's needs, managing to select the customers from the

marketplace, and implementing a customer-loyalty programme, if it is profitable, are seen as

basic strategies for a successful partnership considers that companies who know what they are

able to deliver and focus on tailoring it to a specific model can create fruitful relationships

with customers.

Total customer satisfaction concept

There are many slogans for different service provider for after sales service, organization may

adhere should be derived from customer perspectives, below is an example for showing

customer locality.

All our Activities should reflect our commitment to total customer satisfaction

Commitment Customer Continuous

Chapter No 4. The Challenges of a Service-Centric Supply Chain

To excel at service management, companies must understand and anticipate customers’ desires for the above after-sale capabilities. New forecasting, database and communication tools can be applied to capture, model and disseminate after-sale service information.

Following fig1 showing the strength, weakness, opportunities and threats that any company

should consider analyze before going to develop service business strategy

Positive Negative

Fig1. Showing the strength, weakness, opportunities and threats for consider going to

developing service business strategy.

Strengths Weakness Weakness

Internal capabilities that may help a Internal limitations and constraint that may Company’s reach it objective interfere with company policy ability to achieve its objective

Opportunities Threats

External factor that the company may be Current and emerging external factors that able to exploit to its advantage may challenge the company’s performance

Chapter No 5. Service Management

Building Profits after the Sale

General Motors’ greatest return on capital does not come from selling cars. Although after-

sale parts and services comprise a small amount of GM’s sales, they are by far the largest

contributors to shareholder value on a percentage-rate basis. In fact, an Accenture study of

GM shareholder value revealed that $9 billion in after-sale revenue produced $2 billion in

profits. Profits from the company’s $150 billion in car sales were relatively lower.

“To increase understanding of how to manage customer relationship in the after

sales business of an infrastructure supplier in the process industry market”.

Service is of course one of the major after market support and it is a prime area requirement for our customer’s truck operation. Service Department is completed by special tools, genuine spare parts, and factory trained technicians and engineers.To provide high level support and services issues the main business purpose is to maintain and improve customer satisfaction.

Service Department support includes the following:

1. Workshops 2. Service Cars 3. Factory Trained Technicians 4. Body Repair 5. Exchange Component 6. Customer Contract Program 7. Product Support

1.3 Customer Care and the Service Manager

It is realised that the traditional definition of after sales was too narrow to describe all the

tasks of after sales activities. In the literature, maintenance or preventive maintenance

activities relate to the delivered equipment. In the case of mobile networks, this definition

does not cover the whole scope of the used after sales activities.

A new term, "care" is found in the present study, which is synonymous with after sales. The

word “care“ hints towards the health care industry from where it is likely to have originated,

health care is essentially a highly personal service. During the 1990's, the word "care" was

used increasingly frequently in a marketing context to underline premier customer handling,

as in telemarketing and in the case of Volvo by Anonymous (1998), or customer focused

orientation of the marketing and sales or high-quality services to assure customer satisfaction.

Often, care is tied to services that are delivered to the customer after the final product has

been delivered. In the scope of the present study, the services studied under the title care

include preventive maintenance and maintenance activities, but are not only limited to that.

Care has common characteristics with maintenance activities, as it is delivered to the

customer after the final product has already been delivered; in the other words in the care

phase. In this sense, care could be thought of as a set of after sales activities.

The service manager has the business responsibility in the supplier organisation to deliver the care services to the customer. The supplier nominates a service manager to be responsible for the management of the care phase in the supplier organisation towards a customer. The success of the service manager is indirectly measured by the success of the delivery of the care services. Success is interpreted in terms of the customer’s perception of customer satisfaction and customer loyalty. The main objective in front of customer service manager is to develop such strategy that not only satisfy the customer needs but also continuously monitor the company service policy to improve it from customer feed back.

Chapter No 6. Conclusion

Sit Back and Relax we do all the rest . . . . .

This chapter presents the conclusion and summary based on the results of the study, author personnel motivated thoughts and experience

Chapter No 6. Conclusion

This chapter presents the conclusion and summary based on the results of the study, author

personnel motivated thoughts and experience.

For good and long lasting relationship with the customer the provider should take following

measures depending on the industry and service type.

1. Completere awareness of customer needs

2. Closed relationship with customers and partners

3. Continuous improvement in products and service through feed backs

5. Through out spare parts availability before and after warranty

6. Loyalty with customers

7. Problem solving attitude

8. professional manpower with ability to defuse problems in different circumstances

9. Excellent Management of resources

10. Availably to work under pressures and constraint

11. Closed feed back between customer and service provider

The above are the essential measure that is critical for after sale service business, any business can not be successed or maintain his good will and height in the market without adopting above criteria and measures.

“The hardcore for any successful industry that provides service after sales is to

have such policies that maintain close relation with their customer for better

support.