Vital steps in the evolution of the service supply chain
With the current economic business pressure, reducing costs in the service supply chain without compromising customer satisfaction is a challenge which must be faced head on.
Managing this balancing act requires business intelligence, which refers to the applications, tools, infrastructure and best practices which enable raw data to be transformed into significant information, and as such can be utilised to improve outdated processes.
Sadly, the current service supply chain model does not use business intelligence, but relies on a silo system, in which each area of the network, namely diagnostics and scheduling, parts, logistics, field service and repair, is run by a separate company.
Although the majority of companies working within the service supply chain use this silo model, there are major pitfalls to doing so which seem to be overlooked by the decision makers which strategically drive the agenda.
Glyn Dodd, managing director of service supply chain specialists Centrex Services, states such issues cannot be overlooked.
“We know the service supply chain model has been working inefficiently, with separate entities running each sector of the network. Unsurprisingly, the communication between these areas is often found lacking, as an issue which the diagnostics team are unable to resolve is simply passed on to the next stage, when in reality it may not have been necessary to do so,” he says.
The current model invariably results in the deployment of field service engineers, regardless of the scale of the problem, due to a lack of business intelligence. The cost-effectiveness of such a system must therefore be scrutinised.
Glyn says, “There are three key elements to the service supply chain which transcend each of the five silos. By studying the people, processes and data which unite to create the service supply chain, while simultaneously identifying the inefficiencies within these silos, each element can be challenged. Ultimately, this will culminate in a far more efficient network.”
Correctly skilled representatives create cost-effectiveness
The three key elements which are vital to the functionality of the service supply chain must be dissected to create the most effective model available. The first of these are the people who represent businesses in the service supply chain. This is the element which is easiest to directly challenge, as this can be controlled through efficient management of correctly skilled representatives.
Glyn believes the current silo model within the service supply chain is in fact impeding such change.
“Communication is of paramount importance in all businesses, and this applies to those working in the service supply chain, where we live and die by the level of customer service we are able to offer.
“It is therefore unacceptable that the communication silos which the majority of businesses seem to rely upon result in a system where cross-silo communication is so poor. This is especially poignant when it is the customers who pay the price. It is hard to believe, when some businesses utilise an integrated service network which improves communication, that the silo structure continues.”
A recent study by the Aberdeen Group shows service supply chain customers agree with Glyn’s sentiment, with 58 per cent of respondents stating they want to see an improvement of diagnosis of triage at the initial call level. With further statistics showing there is a 24 per cent increase in first-time fix performance, from 62-86 per cent, when all calls are routed via triage, it is clear that such intelligent communication can increase service level agreements (SLA) and in turn, customer satisfaction levels.
Inefficient processes must be challenged
Customer satisfaction levels cannot be increased solely through challenging the service supply chain businesses representatives. Alongside this, processes must also be scrutinised to construct an efficient service in which business intelligence can be utilised.
With business needs evolving continuously, the processes which are currently commonplace within the network cannot be sustained in the long term.
Glyn says although this is a vital step in the evolution of the service supply chain, this message is not reaching the relevant decision makers.
“Those decision-makers who strategically alter the function within the service supply chain do not necessarily have the knowledge required to alter the inefficient processes which currently plague the system.
“With businesses worried about maintaining their profit margins in these difficult times, altering the processes they use can seem like an unnecessary burden, which is then wrongly linked to excess spending. If they used a leansource approach to integrate the service supply chain rather than tactically selecting separate companies, efficiency levels would increase, while spending decreases and complex issues are transformed into competitive advantage.”
A study by research organisation McKinsey looking into the priorities in the global supply chain support this. 61 per cent of respondents cited reducing operating costs as a priority over the past three years, which is a task manageable through creating more efficient processes within the service supply chain. Once achieved, the percentage of SLA’s which are successfully achieved will increase without any additional pressure being applied on the deployed field service engineers.
These are not the only aspects of the service supply chain which must be studied to create business intelligence however. The second part of this feature will investigate the transformation of data into useful information, and how business intelligence will alter how companies work within the service supply chain. Read in tomorrow’s Supply Chain Digital.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany