Industrial Utility Efficiency    

The Value of Service Inspection Programs

Distribution’s role in maintaining the performance of compressed air systems

During my forty years of involvement with distribution (companies that sell and service compressed air system products) as a Vice President of Sales and Marketing and Account Manager, I have witnessed a tremendous amount of change in the compressed air industry. As much as we like to reminisce about the good old days, it is quite apparent that the resources, capabilities and knowledge of distribution today are significantly better than ever before. This has been most apparent from distribution’s involvement in the design, application and operation of compressed air systems. Their grasp of the latest technology has made it possible to analyze, monitor and control virtually every aspect of the compressed air system. This has give distributors the ability to not only maximize efficiency but more importantly help improve the reliability and performance of compressed air systems to unprecedented levels.

Despite these achievements, distributors have not utilized resources effectively to motivate their customers to maintain and improve their compressed air systems. Just like all mechanical systems, the gradual deterioration of compressed air systems in reliability and performance over time is inevitable and will usually continue until the point of system failure. Due to reasons inherent in distribution’s approach to sales and service, most distributors neglect to maintain a direct involvement in the ongoing operational status of their customer’s compressed air systems. They willingly assume a reactive, rather than proactive role in providing support to their customers in maintaining and optimizing the performance of their compressed air systems.

 

Service Contract Programs

For distributors who have been successful in building this awareness with customers it has been through the utilization of service related programs. They have structured these programs, in order to optimize efficiency, by integrating the promotional capabilities of sales with the operational expertise of the service department. This has been proven, over the years, by distributors who have successfully marketed and implemented well-structured Service Contract Programs.

Service Contract Programs have been popular for many years, especially among larger and more progressive distributors. However, due to the significant investment in personnel and financial resources required to effectively implement these programs, they have not been a viable option for most distributors. In order to optimize service related program participation, by both distribution and their customer base, a program must minimize the resources required while being cost effective. When considering the critical aspects required for a successful program, the most beneficial business solution for most distributors is a Service Inspection Program.

 

Service Inspection Programs

Implementing a Service Inspection Program allows distributors to utilize their resources and maximize their ability to help sustain their customer’s system performance on a continual basis. A Service Inspection Program, whether contractual or non-contractual, is unique in that it gives distribution an opportunity to participate in the advantages offered by service related programs, regardless of size or resources available. The program limits and strictly defines the extent to which a distributor is exposed, allowing the distributor to minimize and accurately determine his operational costs. This greatly enhances the distributor’s opportunity to expand their company’s integration into a larger segment of their customer base.

A Service Inspection Program requires three basic requirements:

  1. Establish regularly scheduled service appointments. These are usually based on hours of operation and are most commonly performed annually or semi-annually.
  2. Provide a comprehensive inspection of the compressed air system. The scope of the inspection should be agreed upon with the customer but should at a minimum cover all equipment on the supply side of the compressed air system.
  3. Generate an inspection report. This should outline the status of all equipment included in the system, the condition of the system itself and any issues that need to be addressed.

In the event that service work or maintenance parts are required, the approval of the customer would be required. Any service work or parts supplied would be scheduled and billed outside of the Service Inspection Program as a separate work order.

Benefits of the program for the distributor:

  • Regularly scheduled access to the customer’s compressed air system
  • Ability to provide customers with more reliable system performance
  • Acquire comprehensive and accurate information on customer’s system
  • Enhance distributor/customer relationship
  • Increase opportunity to promote ancillary equipment
  • Increase parts sales
  • Become the primary system supplier to customers
  • Maintain and grow service business

Benefits of the program for the customer:

  • Increased system reliability
  • More consistent performance of the compressed air system
  • Longer equipment life
  • Reduction in operational costs
  • Reduce product waste and rework
  • Minimize production downtime
  • Ongoing training for maintenance personnel

For distributors who have already implemented a Service Contract Program, the addition of a Service Inspection Program would be very beneficial. A Service Inspection Program will open up a large new segment of the distributor’s customer base unreachable by Service Contract Programs alone. Many distributors that currently offer a Service Contract Programs find that only about 10-15% of their customer base are willing to participate despite devoting a great deal of internal resources, such as service schedulers and procurement personnel to facilitating the program. A well-structured and promoted Service Inspection Program has the ability to increase customer participation level up to 30-40%.

If you do not currently offer any service related programs, I encourage you to give a Service Inspection Program serious consideration. Service Inspection Programs, whether on their own or in conjunction with another program, give distribution the opportunity to increase revenue and profitability as well as provide additional value to the distributor/customer relationship. This simple, yet effectively designed service program allows all sizes and levels of distribution to participate with minimal up front and on-going financial investment and resources. The Service Inspection Program is truly one of the rare programs providing a win/win situation for both distribution and their customers.

 

For more information contact Ron Nordby, tel: 651.308.2740.


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