Research: Service Parts Managers Prioritize Customer Experience



About three-quarters (74%) of service parts managers believe effective service parts management is “extremely important” to the overall relationship with the customer base.

That’s according to research from Bill Pollock, President and Principal Consulting Analyst of Strategies For Growth. This is the second time Pollock has analyzed the service parts management market in recent years, surveying 162 service supply chain professionals.

On May 9th, he discussed his results with Capgemini Digital Supply Chain Principal Dave Williams and Servigistics Business Unit VP Steven Caldwell in a one-hour webinar. You can watch the replay below:

On-Demand Webinar: The State of Service Parts Logistics

Pollock isn’t surprised that service parts managers see the impact logistics has on customer relationships. In fact, he noted that the percentage of field service managers who believe their function is “extremely important” to maintaining customer relationships is high, but not as high as the 74% of service parts managers who have the same sentiment about their practice.

“When you think about it, service parts managers aren’t called upon unless the customer is already experiencing a problem – a unit broke, a system failed, and so forth,” Pollock explained. “Poor service parts management could make that bad situation worse. Imagine having a broken piece of equipment and having to wait several days to get the part you need to get it up and running.”

Were there any findings in the research that surprised you?

There wasn’t anything that jumped out that made me say “holy cow.” What was encouraging, though, was that the market seems to have returned to a place of normalcy.

When the stock market crashed, service parts managers were more focused on reducing costs than improving customer relationships. Now, improving customer experiences and decreasing costs are both equally important to these folks.

Now, you have to a do a bit more digging into this result. You’d assume that service parts managers still prioritize cost reduction because they’re worried about financial performance – especially when you look at surveys of field service managers, who are looking to build up revenue streams.

However, most service parts managers have already mastered the practice of introducing and sustaining new sources of revenue. Now that they have this focus under control, they’re looking for ways to reduce costs, but not due to the crises in 2008.

How are service parts managers approaching technology adoption?

Only 33% of service parts managers say they’re investing in new technology. I’m a little puzzled by that, given about two-thirds of field service managers say they’re doing so.

Are service parts managers not investing because they’ve already done so? Do they not think they need it? I don’t think those are credible assumptions. So, we have to better define what we mean by “technology.” Are we talking service parts optimization software? Machine learning? Blockchain?

With respect to the Internet of Things, only 39% of service parts managers have a strategy in place for implementing this technology. Less than half of respondents report that a majority of their equipment is connected, whether due to technological, managerial, or procedural barriers.

However, the survey data show that this will change over the next few years, increasing to more than three-quarters. What service parts managers need are concrete, proven examples of how the IoT could help them improve customer service while minimizing inventory costs. Once they fully understand the technology’s applications, I think they’ll be much more open to implementing an IoT-focused strategy.

Want a first look into Bill Pollock's research? Register for his webinar here