BY Jovy J. Jader
Supply chain collaboration: It's not a choice
02/05/13
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March 02, 2011
Eliminate, Simplify, Integrate
BY Jovy J. Jader
Moments of truth in after-sales service
Most corporate “Vision” and “Mission” statements explicitly stress the importance of pleasing or even delighting the customer. To what extent these sentences are put into action can easily be measured in the firm’s after-sales service—an arena where customers tend to form their most lasting impressions about the company.
A colleague of mine recently had his vehicle serviced at a leading automobile dealership. It was for routine maintenance but the dealership’s service technician advised that the car’s clutch assembly needed to be examined. When asked how long the examination would take, the technician replied, “three to four days.” Below is the gist of their conversation:
Colleague: Doesn’t a clutch assembly examination take only three to four hours?
Service technician: Yes, but there is a three- to four-day backlog at our general maintenance bay.
Colleague: Can’t I make a reservation three to four days from now so I don’t have to be without my car for more than three days?
Technician: There is no reservation policy for the general maintenance bay.
Colleague: Why is it then that you have a reservation policy for the routine maintenance but none for general maintenance?
Technician: Because we only have one bay for general maintenance whereas we have several for routine maintenance.
Colleague: Why don’t you have more general maintenance bays given the demand?
Technician: I’m sorry but that is our policy; if you need more information or assistance, please feel free to call us.
My colleague had a similar experience with a leading appliance distributor:
Colleague calling an appliance service representative: Hello, I’d like to order a bushing to repair my refrigerator door hinge.
Service representative: I’m sorry but we don’t have the part on stock.
Colleague: When will the part arrive?
Service representative: We don’t know.
Colleague: Do you have another option to repair my refrigerator door?
Service representative: You can replace the door with a new one.
Both the car dealership and the appliance distributor have vision and mission statements that cite the importance of customer service. But there is an obvious disconnect between how these are written and how they’re actually carried out.
The automobile dealership may argue that owners wouldn’t mind parting with their cars for as long as a week, if the tradeoff is original parts and guaranteed service backed up with warranties, which the dealership offers. Customers, it assumes, would think twice about having their automobiles serviced by independent mechanics who would not offer comparable service levels.
The appliance dealer, which has the same monopoly over guaranteed parts, may defend its service policy along a similar line. As most of its appliances are imported, it is very costly to keep stock of parts, but it is something that the customers would understand and for which they would be willing to wait. This type of “customers have no alternative” thinking causes firms such these to be complacent—that is, until an enterprising competitor arrives and does a better job.
What did my colleague finally do for his car and refrigerator? He consulted experienced drivers who test-drove his car and found that there was nothing urgently wrong with the clutch. He also consulted an independent refrigeration contractor who repaired his refrigerator door by way of installing a simple bolt washer.
I wonder if the automobile and appliance firms ever studied the potential benefit of a more customer-friendly policy. I also wonder if they really bothered to even estimate the costs of losing clients who are unwilling to sacrifice their time and effort for these service lags.
From these examples, the two firms obviously lost revenue that they could have been earned through a more customer-friendly policy. They also likely will lose the loyalty of my colleague and the potential revenue from the after-sales service of their products.
Both these companies may remark that one disgruntled customer is just a drop in the bucket. If more customers drop out, however, the effect could be significant in the long run. Losing a client a day from un-friendly policies would mean losing 365 in a year. Taken togather, that’s not a drop in the bucket at all.
Jovy Jader is a consultant and regional speaker on Supply Chain Management. He has directed and implemented Supply Chain Management projects both local and international which have resulted to company-wide improvements in inventory, total cost, customer service, response time, quality, and on-time delivery. Mr. Jader was formerly with Procter & Gamble Philippines and Coopers & Lybrand/PricewaterhouseCoopers. Should you have questions or comments email to jovy@highimpactasia.com
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