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MAKING THE CASE
MAKING THE CASE FOR
Outsourced Services in Post-Sale Supply Chain
(SSC)
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
onprocess.com • OnProcess Technology • 2
It’s no wonder that a 2016 study from Forrester
Research found that 72% of businesses say
improving customer experience is their top priority.
Senior executives know the effectiveness of the
service supply chain—their SSC—is critical to
success. In fact, a study by CFO Research found
that 83% of companies believe that they can boost
customer satisfaction by improving the quality
of post-sales service. However, 75% said their
companies could substantially improve their current
post-sales service.
In short, we know that improving after-sales service
is essential, but getting our arms around how to
achieve that, and then having a platform to execute
processes optimally, is the hard part.
The challenges are complicated because they’re
multi-faceted, cross departmental boundaries, and
are usually saddled by fragmented data, explains
Robert Kenney, executive VP of sales and marketing
with OnProcess Technology, a managed services
provider specializing in complex, global SSC
operations—the flow of people, parts and services
following the sale of a product.
THE DIGITAL AGE BRINGS OPPORTUNITY in many forms, but along with that, there’s a growing set of challenges. Cus-tomer expectations are higher than ever, and not only when it comes to product quality and on-time delivery, but also servicing of products after the sale.
Improving after-sales service is essential, but getting your arms around how to achieve that is the hard part. With a high-performing SSC your organization can take out costs in spare parts inventory, spare parts logistics, and recovery of repairable assets—all while improving customer satisfaction.
Making the Case for
Outsourced Services in Post-Sale Supply Chain (SSC)Your Service Supply Chain: Advantage or cost drain?
Source: Forrester Research & CFO Research
In fact 83%of companies believethat they can BOOSTCUSTOMER SATISFACTIONby improving the quality ofpost-sales service
However,
75%said their
companiesCOULD
SUBSTANTIALLYIMPROVE
their currentpost-sales service
72%of businesses sayIMPROVING CUSTOMER EXPERIENCEis their top priority. Senior executives knowthe effectiveness of the SERVICE SUPPLYCHAIN–their SSC–is critical to success
2%
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
onprocess.com • OnProcess Technology • 3
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
This technology-driven approach is vastly different
than BPO engagements based on contracted
headcount. OnProcess uses a visibility solution that
pulls information from the client company’s existing
enterprise, service, logistics, and inventory systems to
provide a unified view of the service chain, and applies
analytics and best practices to achieve specific results
and to drive continuous improvement.
For example, notes Kenney, analysis of Internet of
Things (IoT) connected equipment can help predict
when products in a customer’s client base are likely
to fail. This can help right-sized spares inventory
levels and positioning so that less capital is tied up in
parts, while the uptime for products in the installed
base is not compromised. “The good news is that
advancements in areas like machine learning are
enhancing our ability to pinpoint and predict machine
failures, which we can use to save costs and improve
reliability and customer service,” says Kenney.
OnProcess also applies analytics to business
processes and events, such as predicting which
customers in a client’s installed base are most likely or
least likely to return equipment. This can make asset
recovery processes more effective with less effort.
It’s just one example how analytics can look beyond
machine failure and examine ways to optimize crucial
handoffs in the service chain.
“Solving service chain challenges isn’t easy,” says
Kenney. “It takes experience and service chain process
expertise, coupled with data analytics and technology
enablement, to achieve the right outcomes.” •
“There are some real silos that exist in after-sales
service, such as the divide that can happen between
systems and people on the tech support side of a
company, and those on the service delivery side of
the house,” says Kenney. “They’re often operating
in different systems, so the data they’re looking at is
different. As a result, bridging that information gap
becomes a challenge.”
Poorly integrated systems and metrics may result
in departments working in an uncoordinated way.
For instance, a customer support operation may be
tracking how quickly it can resolve trouble calls, and as
a result, might be overly inclined to promise an onsite
technician visit, which can be good for the call center
metric, but bad for the field service operation if the
customer issue could have been resolved remotely.
“One department may perceive their metric
is in great shape, but what they’ve done is shift
responsibility to another department,” says Kenney.
“Lack of visibility and operating in different systems
magnifies these silos, leading to what is known as the
‘pain chain’ many companies experience.”
What’s the answer to this pain chain? Ultimately, it
takes better visibility over service events, orders and
processes, and better analytics to drive improvements.
The trouble is, few companies have the necessary
analytics and integrated systems to pull it all off. “The
challenge is that companies have a tremendous
amount of data in different systems, but it is sitting in
silos and not leverageable across all touchpoints in the
overall service process,” says Kenney.
Throwing more people at these challenges isn’t the
answer, especially if those workers lack a common
set of tools for visibility and analytics across the end-
to-end process. Simply outsourcing the challenge
to a business process outsourcer (BPO) will also fall
short without defined goals, as well as integrated
information and insights.
OnProcess Technology, a managed service provider
with proven visibility and analytics tools for service
management, can solve service chain challenges by
marrying subject matter expertise with technology to
achieve targeted improvements.
“Solving service chain challenges isn’t easy. It takes experience and service chain process expertise, coupled with data analytics and technology enablement, to achieve the right outcomes.”—Robert Kenney, executive VP of sales and marketing, OnProcess Technology
onprocess.com • OnProcess Technology • 4
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
“We are a managed service provider business, but
what we provide is powered by visibility tools and
analytics,” says Flinton.
Founded in 1998, OnProcess and its people
are experts in SCC processes. The company’s
engagements are outcome-based, meaning that when
it’s brought in to help a company, it assesses the pain
points and structures its incentives around attainment
of specific goals. It applies analytics to discover areas
for improvement, and leverages its visibility platform
known as OPTvision to optimize SSC processes,
explains Flinton.
Whether a company needs help with services
related to order-to-cash workflows, or with ongoing
service events, OnProcess can apply its mix of
domain expertise, technology and analytics to achieve
targeted outcomes.
“Typically, within a client organization, there are
multiple departments involved in fulfilling aspects of
service. But there are multiple handoffs in this chain,
and handoffs get delayed or otherwise don’t function
well,” says Flinton. “But with our visibility technology,
we can monitor and proactively react to exceptions
across the entire process.”
MOVING FROM disconnected processes for after-sales services to a smooth-
ly working service supply chain (SSC) can yield substantial benefits. With a high performing SSC your company can take out costs in spare parts inventory, spare parts logistics, and recovery of repairable assets, while at the same time improving customer satisfaction.
For either business to business (B2B) or business
to consumer (B2C) companies that service products
in the field or assets related to a service they sell,
an efficient SSC holds enormous profit potential.
In fact, according to Everest Research, after-sales
service can contribute 75% to 80% of an OEM’s
core business profits.
To get your SSC running optimally, the keys include
technology-based visibility into events, analytics-
driven insights, and expertise in fine-tuning critical
functions such as technician dispatching, spare parts
logistics, and asset recovery, says Jim Flinton, VP
of technology and medical division with OnProcess
Technology, a managed service provider specializing
in complex, global SSC operations.
Time for a Technology-Driven Service Supply ChainThe keys to a successful SSC include visibility into events, analytics-driven insights, and expertise in fine-tuning critical functions. Here’s how technology is applied.
In 2016, OnProcess teamed with Massachusetts Institute of Technology’s
(MIT) Center for Transportation & Logistics (CTL) on using Internet of Things (IoT) data to predict machine failures and the impact
on spare parts forecasting. The research found that the more accurately you can predict failures via analysis of IoT data,
the lower average inventory you need.
AFTER-SALESSERVICE
can contribute
75% to
80%of an OEM’s
core businessPROFITS
Source: Everest Research
onprocess.com • OnProcess Technology • 5
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
While many companies run business intelligence
reports on service related issues, OnProcess has
close to 20 years of analyzing service supply chain
processes, and can couple what the analytics
discover with its visibility and alerting tools.
OnProcess’s research and analytics team will
focus the analytics around what the client’s biggest
pain points are, says Flinton. For some companies,
it might be how to increase asset recovery, while for
other companies who sell high-tech products, fraud
prevention is a top concern.
OnProcess’s analytics leverage “propensity scoring”
to pinpoint tendencies that influence issues like asset
recovery or fraud, and immediately send alerts to
services agents to notify them of recommendations.
“We call these InstantInsights, which are proactive
notifications to our agents, so that the appropriate
response can be made,” says Flinton.
In sum, the OnProcess solution is not just
managed services, or a set of technologies, but
rather a blend of people with deep domain expertise,
as well as technology that can be applied in a
proactive way to specific SSC issues, says Flinton.
“Visibility is key, but we also build in the right
trigger points and alarms for specific processes
to proactively identify and prevent jeopardies,” he
says. “Our visibility approach allows us to proactively
support a process today, while our analytics take
processes to a higher level of performance.” •
Here is how some of this technology is applied:• With the OPTvision platform, alerting is used so that
once a threshold is reached the organization can
react. For example, if a service level agreement
(SLA) with a customer requires spares delivery
within 48 hours, and analysis shows that if it hasn’t
shipped from the primary warehouse within 12
hours it likely will not make the SLA cutoff, an alarm
will be triggered so that the order can be expedited
or an alternative parts source or mode of transport
can be found.
• Analytics can look at data from machines to predict
likely failures based on actual use trends, which aids
in spares inventory planning. In 2016, OnProcess
teamed with Massachusetts Institute of Technology’s
(MIT) Center for Transportation & Logistics (CTL) on
using Internet of Things (IoT) data to predict machine
failures and the impact on spare parts forecasting.
The research found that the more accurately you
can predict failures via analysis of IoT data, the
lower average inventory you need. The study points
to the value of basing spares inventory levels and
positioning based on real time trends, rather than
“just-in-case” overstocking based on history.
• Analytics also can be applied to business processes.
For example, OnProcess’s analytics can comb
through spares shipments to customers with
premium SLA agreements to see if parts shipped
under premium transportation get installed right
away, or sit idle waiting for a scheduled maintenance
window, thus leaving time for more economical
transportation options. When this pattern is
discovered, customer support can be alerted to ask
the end user if a more economical delivery option
that meets the repair cycle is suitable. Such analysis
saved one OnProcess client $8 million per year in
premium transportation costs.
• Another business process ripe for analytics-driven
improvement is asset recovery. By data-driven
examination of customers mostly likely to return
parts without prompting versus those who need
more reminders, asset recovery teams can focus
their follow-up efforts to yield maximum results for a
given level of outreach.
“We are a managed service provider business, but what we provide is powered by visibility tools and analytics…With our visibility technology, we can monitor and proactively react to exceptions across the entire process.”—Jim Flinton, VP of technology and medical division, OnProcess Technology
onprocess.com • OnProcess Technology • 6
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
Nutanix has its own systems for enterprise resource
planning (ERP), procurement, inventory, and customer
relationship management (CRM). OnProcess has
integrated its control tower technology with Nutanix’s
enterprise systems, and is now linking its control
tower function with the systems used by Nutanix’s
third-party logistics (3PL) partner.
As a result, as soon as a Nutanix support engineer
determines a service part delivery is needed,
OnProcess can dispatch the parts and coordinate
with the 3PL in an automated way, providing visibility
into successful execution of the delivery.
“We’re embarking on the last leg of the integration
so that now we’ll have full integration not only
between Nutanix and OnProcess, but also our
3PL partner to allow a seamless information flow,”
says Torre. “That integration carries huge value to
us because it improves transaction integrity and
shortens lead time.”
This level of integration allows Nutanix to leverage
partner capabilities without the time delays, manual
interventions, rekeying of data or phone calls
needed to coordinate activities and provide visibility
to end customers.
SINCE ITS FOUNDING IN 2009, Nutanix has built a global reputation and attained rapid growth by offering a hypercon-verged infrastructure platform which simplifies Cloud Computing for en-terprises. Its infrastructure appliances integrate server, storage, virtualization and networking elements to reduce the complexity and improve the efficiency of Cloud Computing environments.
In servicing its rapidly expanding global customer
base, Nutanix also needed to reduce complexity
and give confidence to customers that service parts
logistics will be on track and on time. That’s a key area
for which Nutanix turned to OnProcess Technology,
a managed service provider specializing in complex,
global service supply chain needs.
The relationship with OnProcess allows Nutanix to
focus on technical support and customer service,
letting OnProcess handle functions including
service parts logistics coordination and recovery
of parts from customers. With rapid growth for its
solution, Nutanix stocks service parts at hundreds
of locations worldwide so that it can get them to
customers in data centers quickly, sometimes within
just a few hours, according to Bruce Torre, director
of global logistics, service operations and trade
compliance for Nutanix.
OnProcess has both the technology and expertise
to get these jobs done effectively, says Torre. “They
really understand our challenges, and also, they
have a strong continuous improvement mindset,”
Torre says. “When we meet, if ever there any issues
they’ve identified for improvement, they already
have a remedy, and a timeframe for putting the
remedy in place.”
Nutanix Taps OnProcess for Smooth Service Parts Logistics
“It’s critical that we have this crisp information on service parts logistics, because when we interact with customers we can tell them with a very high degree of accuracy when their part arrived, who signed for it, and the other details a customer might be asking about. This visibility helps strengthen customer confidence in us.”—Bruce Torre, director of global logistics, service operations and trade compliance, Nutanix
Case Study:
onprocess.com • OnProcess Technology • 7
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
“It’s critical that we have this crisp information on service
parts logistics, because when we interact with customers
we can tell them with a very high degree of accuracy when
their part arrived, who signed for it, and the other details a
customer might be asking about,” says Torre. “This visibility
helps strengthen customer confidence in us.”
The integrated approach also smooths the handoff
from Nutanix tech support to OnProcess service parts
dispatching so Nutanix’s people can concentrate on what
they do best rather than worry about logistics, says Torre.
“Our people just need to be able to push a button and
know that it [the service parts dispatching] will work, and
know they will get updates when it is successful,” he says.
Going forward, Nutanix will examine ways to make
use of analytics from OnProcess to improve on areas
that might include asset recovery and service parts
logistics. OnProcess offers analytics technology that can
comb through data to discover patterns, and single out
areas in which to concentrate improvement efforts.
While Nutanix regularly wins accolades for customer
service and support, with its rapid growth, which for fiscal
2016 topped 106% year over year, it needs to constantly
look at ways to improve its service supply chain.
“Our relationship with OnProcess helps us meet the
scale and scope challenges we’ve faced in growing both
geographically, and in terms of customers and volume,
while maintaining our high level of customer service,”
Torre says. “We have good systems internally, and
smart technical support folks, but we also need, strong,
consistently performing backend logistics processes,
which is where we can count on OnProcess for help.” •
“We’re embarking on the last leg of the integration so that now we’ll have full integration not only between Nutanix
and OnProcess, but also our 3PL partner to allow a seamless information flow.
That integration carries huge value to us because it improves transaction integrity
and shortens lead time.”—Bruce Torre, director of global logistics, service operations and
trade compliance, Nutanix
Making the Case for Outsourced Services in Post-sale Supply Chain (SSC)Reap profits and hit operations goals via service supply chain optimization
IMPROVING THE SERVICE SUPPLY CHAIN brings with it a mix of benefits, from strategic to tacti-cal. Operating margins and working capital can be improved while simultaneously enhancing the customer experience. Operationally, man-agers can proactively monitor service events and avoid problems, rather than fighting fires or trying to pull together data from disparate systems. The key is moving from reactive prob-lem solving to proactive failure prevention.
According to Gartner, a recent survey of chief supply chain
officers (CSCOs) found that operations improvements, cost
management and profit improvement ranked as the top three
CSCO priorities. Let’s face it, every business is after reduced
costs and improved profits, but it’s important to remember
that attainment of these high-level goals typically stems from
operational improvements.
The strategic and operational benefits possible the service supply chain are outlined below.For senior executives including CFOs and CEOs: Improving aftersales service can unlock efficiencies and
improve customer satisfaction. According to a 2016 study
by CFO Research, 71% of senior financial executives
surveyed believe changes in post-sales services can
eliminate redundant work, while 82% agreed such changes
can improve customer satisfaction.
Potential areas for cost savings include lower spare parts
inventory levels, improved asset recovery rates, and lower
transportation costs for replacement parts. Better uptime for
products in the field and a stronger customer experience also leads
to improved customer satisfaction, which drives loyalty and sales.
Case Study: Continued
onprocess.com • OnProcess Technology • 8
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
For logistics VPs and service parts managers: Visibility over
service events with exception alerting ensures that if parts or
service calls are at risk of failing to meet a promise data or
service level agreement (SLA), the organization can react to
resolve the issue without last-minute expediting.
Analytics can also be used to determine if customers who
have the right to premium spare parts delivery are making use
of the parts immediately, or holding them for later installation.
Knowing this pattern offers the service organization a chance to
slash spending on premium shipping while still meeting SLAs.
Additionally, monitoring and analytics of unidentified returns
parts will aid your organization from building up a costly level of
“trouble shelf” parts in warehouses.
Thinking about specific improvements needed in the service
supply chain is a good exercise for any business with after sales
service. You should not just throw more people or new systems
at service management challenges; you need to have specific
outcomes in mind, explains Jim Flinton, VP of technology and
medical division for OnProcess Technology.
“The areas our clients want to focus on are those areas that
directly impact a financial or customer satisfaction measure,” says
Flinton. “We are a technology-driven managed service provider,
and we’re focused on achieving specific goals. For instance, if by
delivering our service, we can show a reduction in working capital
for maintenance stock inventory, that’s a win any CFO would be
happy to see.” •
Outcome-based managed service providers who can
leverage technology for visibility and analytics over service chain
processes are a proven path for achieving underlying operational
improvements without having to deploy costly new enterprise
solutions or bring in internal domain expertise.
For customer support managers: Visibility over service
order events ensures customer issues get resolved on time,
while avoiding expediting and time wasted combing through
back end systems for event status, logistics updates, or other
information needed to service the customer. With analytics
into customer calls and requests, the “triaging” of customer
interactions is more effective, with timely resolution of issues
without overburdening the field service group with unneeded
technician dispatch events.
For field service/technical support managers: Analytics can help reduce unnecessary field service calls
by resolving more issues remotely, while also matching the
customer issue to the parts and technician skills needed to
efficiently fix the issue on the first visit. Meanwhile, analysis of
machine data can lead to predictive maintenance schedules
that may result in fewer truck rolls, and overtime, reduce the
likelihood of bigger repair orders.
Analytics can also help ensure that warehouses and service
vehicles have the right parts on hand to resolve issues without
overstocking. Overall, technology helps deliver better, more
efficient service. In fact, according to research by McKinsey Global
Institute, up to 15% of after-sales costs have been reduced through
the use of analytics that includes product sensor data analysis.
Up
15%of AFTER-SALES
COSTS
have beenREDUCED
through theuse of
ANALYTICSthat includes
product sensordata analysis
Source: McKinsey Global Institute
p to
5%
Source: CFO Research
82% agreedsuch changes canIMPROVE CUSTOMERSATISFACTION
of senior �nancialexecutives surveyedbelieve changes in post-salesservices can ELIMINATEREDUNDANT WORK
71%1%
onprocess.com • OnProcess Technology • 9
MAKING THE CASE FOROUTSOURCED SERVICES IN POST-SALE SUPPLY CHAIN (SSC)
supply chain for 19 years, and many of our clients have
been with us for 10-plus years. We couple that experience
and process expertise with technology enablement—with
the visibility and data analytics tools needed to achieve the
targeted outcomes our clients are after.”
Like most enterprise challenges, improving pains in the
service supply chain requires a mix of people, processes
and technology, but with OnProcess, companies can
count on help in all three of these areas. OnProcess
helps a company assess which service processes need
improvement, and start applying its technology and
best practices to attain those goals, says Jim Flinton,
OnProcess’s VP of technology and medical division.
“Our engagements are structured around attaining specific
outcomes—we are not a business process outsourcer,”
adds Flinton. “Our approach is to focus on areas that affect
your balance sheet, income statement, and customer
satisfaction levels in ways that are measurable and clear.
That creates aligned interest, putting us in a partnership
position around your service supply chain objectives.” •
WHEN WE HEAR ABOUT COMPANIES that have made big improvements in after-sales services—cutting spares inventory by 20%, or doubling their asset recovery rate on repairable products—it begs the question: How can my organization gain similar benefits?
The answer is complex, but basically, companies
need better visibility over end-to-end service supply chain
events, and the technology and domain expertise to
analyze trends and make adjustments.
That remedy is a tall order for companies who have
disconnected back-end systems for customer support,
technician dispatching, spare inventory management, and
logistics management. You can deploy an overarching
system for service management, but that takes time and
requires a major technology investment, and still leaves
your company without the domain expertise to know
which issues to focus on, and how to best run event
management and analytical tools.
There is a better alternative: bring in a managed
services provider with technology tools, analytics,
domain expertise, and a track record for making targeted
improvements in after sales services. OnProcess
Technology is such a provider. In its close to 20-year
history, it has helped Blue Chip companies such as
Charter, Cisco, Dell/EMC, HP, Philips Lifeline, and GE
Healthcare, manage after sales services.
OnProcess also has helped young technology
companies such as Nutanix quickly ramp up a service
supply chain, helping Nutanix keep up with exponential
growth, while improving its asset recovery processes.
“We have tenure and track record in focusing on
aftersales sales service supply chain issues,” explains
Robert Kenney, executive VP of sales and marketing for
OnProcess. “We’ve been 100% focused on the service
Move from “Pain Chain” to Service Supply Chain
Savvy supply chain managers bring in a managed services provider with technology tools, analytics, domain expertise, and a track record for making targeted improvements in after sales services.
“We’ve been 100% focused on the service supply chain for 19 years, and many of our clients have been with us for 10-plus years. We couple that experience and process expertise with technology enablement—with the visibility and data analytics tools needed to achieve the targeted outcomes our clients are after.”—Robert Kenney, executive VP of sales and marketing, OnProcess Technology
(SSC)
Visit www.onprocess.com
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