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Tidying Up Your Service Supply Chain

Take a quick look at your Facebook feed or any major news publication, and you’ll see a lot of chatter about Marie Kondo, the star of Netflix’s new series Tidying Up with Marie Kondo and bestselling author of The Life Changing Magic of Tidying Up.

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Gary BrooksGary Brooks

Take a quick look at your Facebook feed or any major news publication, and you’ll see a lot of chatter about Marie Kondo, the star of Netflix’s new series Tidying Up with Marie Kondo and bestselling author of The Life Changing Magic of Tidying Up.

Kondo’s method essentially boils down to holding on to material items that ‘spark joy,’ discarding ones that don’t and ways to optimize – and love – the space that you have. The KonMari Method has taken the domestic world by storm, so how can manufacturers apply it to their businesses?

Manufacturers are at a pivotal time in their storied histories. Around the world, we are seeing a major shift to servitization, where brands are shifting from selling a product itself to the outcome or value that the product delivers. This shift is putting much more responsibility on the manufacturer to ensure products are preemptively repaired and maintained and that customers rarely – or never – experience service disruptions or downtime.

As a result, manufacturers must find ways to ‘tidy up’ their businesses, increasing cost efficiencies throughout the entire value chain to transform business logic, company culture and product development strategies. Below are a few ways manufacturers can use Kondo’s style to transform internal processes to ultimately deliver amazing results.

1.    Commit to tidying up. 
The KonMari Method “places great importance on being mindful, introspective and forward-looking,” and manufacturers can view their businesses through this same lens. 

In recent research from Syncron and Worldwide Business Research, 66 percent of OEMs (original equipment manufacturers) indicated that they are beginning to feel pressure from the executive suite to shift away from a reactive, break-fix service model and move towards one that is focused on maximized product uptime. It’s clear that many executives see the writing on the wall and know that change is necessary to succeed. But, it’s clear many executives still have a ways to go. Thoughtful self-reflection from the C-suite will lay the foundation for new ideas to take hold within the broader organization. 

2.    Imagine the ideal outcome. 
Before launching any sort of transformative initiative, it’s important to first set goals that make sense for your individual business. The full shift to servitization could take anywhere from five to 15 years. The realization of a servitization-centered economy is a marathon, not a sprint and before you take off on this race, it’s important to have an expected outcome in mind. 

Goals will vary by organization and industry. When setting these goals, it’s important to consider your own customers’ expectations, industry standards and what is possible and necessary for your business. Having a common goal will encourage stakeholders from all facets of the organization to work toward a common purpose. 

3.    Discard what isn’t necessary. 
Prior to establishing new processes, investing in new technologies or hiring additional resources, manufacturers should reevaluate current processes and infrastructure. Identify any inefficiencies and determine how current programs are impacting – positively or negatively – the customer experience. 

In the shift to servitization, after-sales service in particular is more important than ever. OEMs should examine their entire service supply chains, including part inventory, price management, vendor partnerships and more, are efficient, automated, exceeding customer expectations and ultimately adding real value to the organization. If these needs are not being met, current solutions should be discarded and new ones should be implemented. 

4.   Tidy by category, not location. 
Servitization is a global shift. While individual regions will have different challenges, it’s important to keep a global frame of mind and ensure that all facets of a company are aligned. 

Manufacturers should identify key leaders in various functions that will touch any aspect of servitization. Organizations like research and development, production, service, finance and sales, among others, all have a vested interest in making the shift to servitization a reality. Consider establishing something like a ‘servitization council’ that regularly meets and can facilitate educating the broader organization on the importance of the changes servitization requires.

5.    Follow a process. 
Change can be scary for anyone, especially when it involves completely redefining the way a large OEM has operated for decades. To mitigate some of the fears and risks that come with change, manufacturers should build the structure that will help internal teams measure their progress. 

Because the full shift to servitization will take years, define specific milestones, like where the organization expects to be one, two and three years from now (or whatever timeline is best for each organization’s needs and goals). This will help leaders create more tactical, department-level measurements and identify the necessary resources, technology and infrastructure needed to succeed. Finally, establish regular updates and check-ins to ensure each functional area meets its desired goals.

6.    Does it ‘spark joy’ (especially for customers)?
Brands like Netflix and Spotify – where a user pays for access to multiple shows, movies or music – have created an on-demand mindset where customers expect products to ‘just work’ and service to be instantaneous. This mindset is trickling into all facets of business and life and is completely redefining the way people consume products – and that includes customers of large, durable, manufactured goods. 

If the customer is demanding change, manufacturers essentially have no choice but to adapt or lose significant market share to those manufacturers who adapt before them. As more OEMs move to a service model focused on maximized product uptime, they will need to transition away from the traditional, reactive break-fix method of service into one that is much more focused on preemptive maintenance. Through the ‘tidying up’ process, the most critical point to keep in mind is the customer experience. Though every step, OEMs should ask themselves how changes will impact customer loyalty and the overall brand experience.

Gary Brooks is CMO at Syncron.

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