LINE56 - Sharper Service
By Demir Barlas, Line56, January 16, 2004
Electrolux Home Products, which claims to be the largest home appliance manufacturer in the world, assigns a lot of importance to service providers.
That's not because the company is being squeezed by third-party service providers (in home appliances, the manufacturer's warranty has a lot of power) or because business is declining; it's a simple question of pleasing the customer, avers Mark Newell, head of communications & training for Electrolux's consumer services group. "For us, it's customer satisfaction," he says. "When a consumer has a a problem with an appliance, it's the single major problem of their day. If they're less than happy, we can't be in a leading position in the industry."
As a consequence, Electrolux (best known in the U.S. for its Frigidaire brand) assigns great value to its 4,531 independent authorized service providers. From Electrolux's perspective, the overarching goal is fast turnaround of service calls -- thereby providing maximum customer satisfaction and also pleasing the servicer, who can move on to other jobs faster.
One of the components of fast turnaround is on the planning and distribution level. Here, Electrolux has systems and processes in place that ensure a 99 percent parts fill-rate (within 48 hours) for its suppliers. But Electrolux has been able to derive further value by understanding, at both a granular and aggregate level, what is going on in service transactions.
For example, Newell says, Electrolux automatically audits service claims as they come in to see if there are duplicates. This is part of keeping the costs of administrative error down. Higher up on the value chain, Electrolux can see trends as they unfold and react to them more quickly. "If we see repeat problems in a given week, we'll alert the engineers at the factory," Newell explains. "We can identify and correct problems right on the line."
Electrolux can also closely manage the performance of its servicers and work with them accordingly. "Parts usage analysis lets us see how technicians work," says Newell. For example, a particular servicer might not have a particularly good grip on a problem and will just "keep replacing parts until they replace the one that doesn't work." Electrolux can identify behavior like that from part ordering patterns, making it simpler to identify servicers who need training updates. Another advantage of looking into part ordering patterns is that it "helps to forecast demand -- we can stock distributors with parts we see are more in demand," explains Newell.
There's another reservoir of cost savings in the way in which Electrolux uses its servicer data. The company tracks month-over-month volume, comparative costs, and labor rates, putting it in a better negotiating position vis-a-vis a given servicer. Aggregated across thousands of servicers, that means a lot of money saved.
Finally, Electrolux has used a scorecarding feature to identify the servicers it needs to stand behind its new, high-end "Icon" brand. "Icon will see the top servicers get more demanding work," says Newell. "We're serving a different demographic. The key ingredient is an ability to deliver service to a consumer who has an even higher expectation than a Frigidaire consumer."
The vendor that provides all this functionality is ServiceBench, which has been working with Electrolux since 2000 and went live in 2001. Indeed, ServiceBench has evolved partly in response to Electrolux's needs, going in the directions required by the manufacturer. "ServiceBench started out simply processing claims but the relationship has grown dramatically over the years," Newell concludes.
Used with permission of: Line56, 10940 Wilshire Blvd., Suite 600, Los Angeles, CA 90024, www.line56.com
