With unprecedented pressures on product margins and the
threat of commoditization, services may the best
opportunity for profit and differentiation. Too often,
manufacturers view their service operations as ancillary
businesses separate from and by no means equal in
strategic or operational importance to the “core”
product business. That mindset is as risky as it is
outdated. There has been a clear migration toward
service offerings, a shift sparked by products rapidly
becoming commodities and by growth in the number of
customer “touchpoints” over the lifetime of a
manufactured product. The shift applies to consumer
goods as well as to industrial products, and to complex
industrial machining centers and commercial
refrigeration units as much as to vacuum cleaners. The
sale transaction is essentially just one touchpoint on a
continuum of potential interactions between producer and
customer, and an early one at that. At its root, the
basis of competition is shifting toward the ability to
drive business performance through excellence in service
and parts management.
