Theory of Constraints Handbook - James Cox Iii [591]
2. All product types at the same site are covered by the same service programs.
3. Value-added services (VAS), such as training or advanced application support, are not included in the service programs.
4. Pricing will be such that Basic Services, Limited FSE visits, and parts services are the most attractive choices. Extended and Complementing Services will deliberately be priced “out of range” but still made available.
Presenting the market with a range of options, priced in a way that minimizes current “abuse” of services is definitely a big step in the right direction. As we have learned from personal communications of CS managers, it alone can decrease up to half the expenses of the CS department. However, that is far from all that can be done to improve the CS contribution to the company’s profitability.
At least four additional areas present significant potential for improvement (if improvement is defined as either a decrease of the operational expenses or an increase in the Throughput of the CS system). These areas are listed as other service offerings.
Other Service Offerings
Value-Added Services
These are knowledge-driven, high-end, high-margin activities, which enable the equipment user to derive much higher value from its use. Usually, companies turn to external consultants to provide this type of expertise. Often it has to do with better, smoother work-flow organization, better physical arrangement of the machines, and improving the interaction between various departments—all in order to improve the client’s positioning in the market. Often it necessitates an in-depth understanding of the client’s operation in order to correctly identify the constraints of the system, or more efficiently exploit them, or—and that is (according to our experience) the most common case—better subordinate the entire system to its constraint. As equipment makers, CS departments are often populated by people perfectly suited to perform such tasks; it positions the equipment maker as a better business partner, increasing the chances of future purchases. Furthermore, it transforms CS from its current “break and fix” mode to a consulting-like entity. And of course, such an activity can be amply remunerated, significantly higher than the standard service fees.
Launching of Expert Systems
Quite often large chunks of the expertise required to resolve customers’ problems effectively and efficiently are not properly documented and readily available to the technical staff. Usually it resides in the memory of the service providers, and that is one of the main reasons CS is viewed as more an art form than a science. It is just one of the many facets of the problems involved in the organizational knowledge preservation and management. If, however, the organization makes the necessary effort to build a system to identify, assemble, create, catalog, represent, distribute, and enable adoption of the insights and experiences of its experts, the benefits can be huge to both CS and its clients. Such systems are called Expert Systems, and as such, they make the insights and experiences readily available to everybody in the service organization. They comprise the assembled knowledge, either embodied in individuals or embedded in organizational processes. The potential of having all that expertise readily available, without the need to experience a lifetime of CS work firsthand, can turn even a beginner into a valuable worker, almost from his or her first days on the job. Using a computer expert system to assist CS personnel can decrease even further the need to perform on-site visits. When coupled with good remote diagnostic systems, an expert system has the potential to improve service to clients significantly, while considerably decreasing the costs involved in providing it.
Third-Party Maintenance (or TPM)
Third party maintenance (TPM) is a name given to outsourcing of the CS activities to an external entity, which is capable of providing