While manufacturers look for growth and profits in all corners of the globe, they often neglect large opportunities much closer to home — in their own service and parts operations. This new thought leadership report reveals how manufacturers are building world-class service and parts businesses to drive profitable growth.

Presenting the findings of a Global Benchmark Study on Service and Parts Management by member firms of Deloitte Touche Tohmatsu, the report highlights that:

• Service businesses are an increasing source of profit for manufacturers
  Among the global manufacturing companies surveyed, service businesses account for 46 percent of profits. The average profitability of the service businesses is more than 75 percent higher than overall business profitability.  For many companies, overall profitability would be much lower without the service business.
• Service businesses offer immense opportunities for revenue growth
  The average company captures just 40 percent of the after-sales service market and 70 percent of the after-sales spare parts market in servicing what is in essence a "captive market" — their own installed base of products. Very few companies have made significant inroads in servicing customers of competitive brands — a market that is typically two to 10 times larger than the captive market.
• Companies that focus on developing their service business stand to win customer loyalty
  Most companies tend to focus efforts on product innovation and manufacturing efficiency and fail to dedicate their best resources to improving "back-end" aftermarket service capabilities.  By offering customers an attractive total customer care package that ensures that they receive the parts they need to maintain the productivity of their assets, manufacturers can strengthen customer loyalty and gain significant benefits in revenue growth, profit contribution and repurchase loyalty.
• Service champions are transforming their business through service excellence
  "Service champions" are transforming their businesses in three ways.  These leading companies manage the service function as a growth business, integrating it into the company’s core strategy. They effectively deploy business processes and supporting technology. In addition, they deliver service excellence one customer at a time.  Improvements in any of these categories will yield real return, but service champions revolutionize their service businesses by excelling in all three.

Find out more about how to participate in the Global Benchmark Study on Service and Parts Management survey or contact us at serviceandparts@deloitte.com.

Global Benchmark Study on Service and Parts Management
Deloitte's Global Benchmark Study on Service and Parts Management has produced in-depth benchmarking information of the service and parts businesses of some of the world's largest manufacturing companies across a range of sectors, including aerospace and defense, automotive, diversified and industrial products, high technology and telecommunications equipment, and life sciences/medical device manufacturers. Through this research, Deloitte is able to provide insights on how top-performing service and parts organizations are leapfrogging the competition and driving continuous improvement in operational and financial performance.