There has been a sea-change in the attitude of business over the last 18 months towards:

management of field engineers in terms of individual well-being; management of the parts used as green issues come to the foreground, including consumables as well as repairables; generation of revenue from the service operation.

Some commentators refer to the ‘nanny state’, but irrespective of political allegiance attitudes have moved rapidly towards looking after workers as a pre-requisite to a loyal workforce and abandoning some of the more antiquated business philosophies. The focus for employee welfare is on the Duty of Care towards employees and the law reinforces moral obligations by requiring that vehicles are safe to use, equipment is well maintained and all individuals are properly trained in relevant aspects of their role, including the way they drive.

Many companies and management teams, however, appear to be unaware of the breadth of laws encompassed by the phrase Duty of Care and as businesses have focused on reducing costs through mobile solutions, etc, the mechanisms in place to protect the lone worker (defined as an individual working out of hours or not on a manned site) must satisfy the ever tighter legal requirements.

A good example of companies showing an awareness of their responsibilities is the use of software applications and devices that can provide ‘dead man handles’ (defined as the ability for a device to act in the absence of input from the user and epitomised by the emergency equipment in trains) now considered mandatory for situations where lone security personnel are despatched to a site in response to a plea for help. The software applications ensure that if the equipment and/or the personnel do not continually send a coded signal (specific pin number for example), the device will issue an alert.

This introduces the concept of ‘fail-safe’ which means that a device and software will register a failure to provide specific information at a specific time, causing an alert to be sent to base for backup support. The absence of this type of device in certain circumstances is now regarded by the law as criminally negligent, punishable with a custodial prison sentence for any director considered responsible for a failure to comply.

The other side of this coin is the significantly rising costs of running all types of asset (both personnel and equipment) over the last year. These costs are here to stay and companies will be looking to save money while implementing improved personnel welfare. As an example, the costs of running fleets continues to rise, so complying with legislation and employing improved driving techniques has been shown to reduce accidents as well as the amount of fuel used, thereby reducing costs that once were acceptable as a consequence of doing business.

Cost reductions

Achieving cost reductions whilst adhering to legal and social demands has been a trend in utilising the adoption of green issues as a marketing strategy that will demonstrate a responsible attitude. Some may find the issues contentious, but scrapping or throwing away items is no longer acceptable. Every item to be accounted for and returned for legal disposal means that the control and efficient movement of all items has become an important issue.

Companies are making great efforts to reduce return times of parts from the field and to reduce stocks in parts-supply pipe-lines. Significant cost reductions in parts holdings and purchases have been achieved, as well as more efficient compliance of tightening legal requirements.

The increasing attention and expectation on service by customers has generated much more interest within the board room, particularly with the growing realisation that service now represents the most effective mechanism for growing revenues and improving margins. This shift of emphasis is not unlike that when manufacturing moved from concern for engineering excellence towards smarter production techniques to reduce costs and increase value to the customer. Service (once a necessary evil to keep customers happy) is now appreciated for its financial and customer value, creating a focus on the financial returns and its growing support to the overall business bottom line.

Research undertaken in conjunction with Service Management magazine has highlighted this shift and shown that many companies now regard service as a critical and, in some cases, the only source left within the business able to generate strong sustainable revenue and margin.

The three issues are important in combination because it is essential to offer good service and a focus on customers while managing staff and parts effectively to ensure success. Service as a strategy has been accelerated by the impact of the economic climate over the last year and for businesses to still target to increase their revenues and profits in the face of shrinking sales and reduced margins on products. In successful companies there has been a recognition of the value of the service operation to the whole business, with decisions on business strategy strongly dictated by service issues in a customer centric operation.

Companies have succeeded in combining the areas of personnel care, environmental concerns and business profitability by focusing on existing customers and developing their customer relationships at all levels within the business. 

Generate revenue

Customer satisfaction is recognised as an important pre-requisite to generate revenue and that existing customers are more profitable than new ones, if only because, in the current climate, the cost of acquisition of new customers is high compared with the costs of maintaining existing customers. It is also significant to realise, however, that the average company still loses half its customer base every five years because of poor service. In the current environment this wastage is not acceptable.

Relationship management is demonstrated by good communication with customers, alerting them to potential problems before they occur, as well as fine-tuning expectations to ensure that they will be consistent with what can be reliably delivered. Good communications will also emphasise the importance of meeting customer commitments regardless of cost, if at all possible. It is this point of true loyalty to the customer that most companies find hard to come to terms with.

Not utilising information available through service, sales and marketing teams limits the ability of a business to maintain a lifetime customer from the very beginning of the relationship. Solutions that will deliver the necessary versatility as yet are few and far between as it requires the solution provider to embrace this thinking and deliver the necessary tools to facilitate the construction of customer relationships from the beginning. A business attitude that recognises a well supported and well treated customer will not be so keen to look for a better solution and their loyalty to a particular supplier will not be regularly tested.

Those companies that have recognised the ability that the new tools provide, coupled with a changing attitude towards the customer, have developed strategies that take advantage of theses tools and capabilities, supported by the appropriate solution to provide the business with invaluable insight from the customer services aspect of the business.

As outlined above, the use of mobile devices is increasing significantly and therefore the ability to capture the necessary information to maintain a lifetime relationship now exists in real terms. The technology and capability of these tools is allowing businesses to work in ways that were only pipedreams two years ago. Successful companies are fast eroding the limitations of their businesses by the effective use of certain software applications and taking advantage of all opportunities to optimise their service delivery.

As businesses come to realise the full value of optimising their total assets and utilise broad-based strategies, service is becoming fully integrated at all levels inside the business, helping to build and support a customer centric business that will keep customers for life.