Life used to be simple for manufacturers. You sold a product, and if it broke, you fixed it. Post-sales service was long considered a tactical cost center.
Today, however, aftermarket service is fast becoming a strategic imperative. Some manufacturers keen to compete in the face of difficult economic headwinds are focusing on improving the quality and productivity of their post-sales service to enhance customer satisfaction and drive profits.
"For manufacturers with a service infrastructure, it is becoming essential that service technicians are used to their fullest potential, not sitting idle," says Sumair Dutta, research analyst for the Strategic Service Management Practice at Aberdeen.
IBM has one of the largest service infrastructures around and, in recent years, the high-tech giant has found that virtually all of the lean concepts it has used to streamline manufacturing could be successfully applied to its huge, multibillion-dollar business process outsourcing operation. Its efforts have helped to reduce service costs while improving the company's ability to meet service-level agreement commitments and boosting productivity. These results earned IBM a tie for Managing Automation's 2008 Progressive Manufacturing High Achiever Award for Customer Mastery.
IBM began adopting lean principles in its service business as the company's IT service leadership position was threatened by lower-cost offshore competition.
"Lean is old news in manufacturing. It is not such old news in services," says IBM Distinguished Engineer Dave Northcutt. "We felt it was important to learn from other industries and apply lean to our IT services business.
IBM is relying on its new lean approach — called Delivery Excellence — to transform processes across the company's business process and IT outsourcing businesses. Customers of those businesses include large corporations such as ABB and Visteon. Delivery Excellence, a set of common, technology-enabled service delivery processes, is based on the company's beliefs that removing waste and latency leads to continual improvement and that performing value-added work in a global, integrated, and simple way drives productivity and maximizes profit.
So far, the services lean journey has circled the globe. In 2007, it reached delivery teams serving 22 of IBM's largest accounts in seven countries. IBM trained more than 2,400 employees in Delivery Excellence methods, and those employees touched more than 670 unique client environments in one or more service lines.
While results varied among project teams, IBM has seen across-the-board improvements in both quality and productivity. For example, according to Northcutt, the average time to resolve one class of problem tickets in IBM's server support area has decreased between 45% and 86%. The number of problem tickets closed per day in these same server areas increased between 23% and 66%. The average time required to service customer help desk calls decreased roughly 2% to 17%, while resolution rates improved or stayed constant. The percentage of help desk calls answered within target times increased as much as 25%. Productivity increased on average 20% in targeted areas.
"This has been a lot of hard work and effort," Northcutt says. "Certainly, not everything we have tried has worked out perfectly. On the other hand, in the aggregate, I think we have made tremendous improvement. We've taken measurements that show improvements in service quality, efficiency, and effectiveness. But we are not done yet. Lean isn't a project. It is a never-ending journey."