Long seen as something of an afterthought to the core business of selling products, service has become a way to stand out from the crowd by focusing on solving customers’ problems in the longer term, and helping them be more competitive, rather than just selling to them.
Jack Welch, who ran General Electric from 1981 to 2001, had this take on the service question: “Your challenge is not just to improve. It’s to break the service paradigm in your industry or market so customers aren’t just satisfied, they’re so shocked they tell strangers on the street how good you are.”
And of course, this is exactly what service suppliers should be striving to do – exceeding customers’ expectations by anticipating and solving their problems before they happen.
For decades, many corporations were slow to crack the paradigm, often tending to see service as a sideshow to their main business of selling products. But that is changing. Economic pressures, and the worldwide commoditization of equipment and hardware, are forcing manufacturers to find new ways to differentiate themselves from the competition.
"The goods and service divide is obsolete. Services have become the key to unlocking the value of physical goods.”
BO EDVARDSSON, PROFESSOR OF BUSINESS, ADMINISTRATION AND FOUNDER OF THE SERVICE RESEARCH CENTRE AT KARLSTAD UNIVERSITY
FACTS – Selling peace of mind
Service Manager Peter Norrby says the mindset among Alfa Laval’s customers has changed from “don’t come to me and sell" to "come and help me keep my business running”. “It’s about asking how we ensure maximum customer satisfaction over the lifetime of the equipment. It’s about going from reactive selling of spare parts to a proactive selling of peace of mind.”
Increasingly, Alfa Laval uses advanced software and sensors to monitor the condition of installed equipment. Knowing the right time to replace components is critical to plant productivity and uptime.
One of the world’s largest ethylene producers in Saudi Arabia discovered this when Alfa Laval recommended a condition audit for the company’s 11-year-old gasketed plate heat exchangers. The heat exchangers had operated for many years without requiring maintenance and had delivered solid performance for so long that the customer saw no need for maintenance. But, even if gaskets are specially selected for the purpose, they can last longer or need replacement earlier than expected depending on actual operating conditions.
In fact, the audit data clearly indicated that the gaskets were approaching the end of their service life and reconditioning the plates was necessary. Early action averted a high risk of plant shutdown.
"A short-term gain by selling will not make a customer happy if the customer sits with a problem for ten years – the customer will never come back. 'Sell and run' doesn’t exist anymore.”
PETER NORRBY, ALFA LAVAL
FACTS – The true cost of downtime
Remotely monitoring equipment and fixing issues before they become full- blown problems is a highly attractive prospect for many companies. These two examples, which show what the cost of heat exchanger failure could be in two different applications, illustrate why:
- USD 500,000 per day: Production stop in a petrochemical application with plate heat exchangers in critical positions.
- USD 30,000 per day: Production stop in a mid-size vegetable oil refinery where boiler failure leads to total stop at the plant.