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The secret life of factory service centers. The secret life of factory service
centers For a lucrative new source of revenues, profits ...
... The secret of SABRO'S success is rather general to a ... "In the appliance industry,
product life cycles are ... could achieve higher rates of factory throughput and ...
... sustainable development." It is an open secret that industrialized ... life and afford
the basic necessities of life. ... Carlos (1999), From Farm to Factory: For a ...
... improvement was a way of life throughout the ... as to identifying the "secret sauce"
responsible ... SLC can service multiple factories; each factory makes materials ...
... 6. What has been the secret of the success ... the best available materials • Guaranteed
for life • Repair or ... Prior to building their factory, they supplied to ...
Submitted by ashrafvirk on August 18, 2005
Category: Technology
Words: 2755 | Pages: 12
Views: 188
Popularity Rank: 63,228
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The secret life of factory service centers
For a lucrative new source of revenues, profits, and market information, manufacturers need look no further than their own repair shops.
A few miles off Interstate 696, outside Detroit, the factory service center of a consumer goods company blends easily into the commercial landscape. The seven people who work at the customer support site sell parts, refurbished products, and accessories; repair products; and answer service and maintenance inquiries. Until recently, the manufacturer paid scant attention to this place or to its whole network of factory service centers, which were seen merely as a cost of doing business—the price a company pays to support products that eventually wear out or break. Then a new division manager discovered that despite years of neglect, the centers were earning margins upward of 20 percent, more than twice those of the core business. Now the company is planning to open centers in ten new locations across the United States and expects network-related revenue to double by mid-2003, thereby providing a full 10 percent of the revenue of the division and 15 to 20 percent of its profits.
A handful of US companies have achieved similar results; with small capital investments, so could many others.1 Factory service centers can not only generate cash but also provide a gateway to the lucrative world of services. Trucks, for example, can produce after-sales revenue equivalent to four times their purchase price through financing, insurance policies, service contracts, and the sale of parts and accessories.2 At present, though, these high-margin items tend to be sold through third parties—dealers, retailers, and independently owned authorized service centers—which take a cut of the revenues from parts and all of the revenues from service contracts and extended warranties. Manufacturers can capture a larger share by enlarging their own service networks.
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