S011_PROC-852.2015

ACHEMA Worldwide News2/2015

supplier runs the risk of tarnishing its image, and the customer may place its next order with a competitor. Enhancing Customer Loyalty, Benefiting from Field Experience The provision of services following the sale of a product makes good business sense for a number of reasons. It gives pump, valve and controls suppliers a good sales argument for new products, and the services enhance customer loyalty. Information feedback from the service organization to the development team also helps companies improve their products. In addition, the margins in the service business are generally much higher compared to the product business. Not only that, the after sales and service business helps companies ride out economic cycles, particularly when new product sales suffer during slowdowns. The delivery of after sales services as a separate business is a very successful business strategy, but that approach faces a major hurdle. In a recent survey of several hundred machinery and equipment suppliers, management consultants McKinsey together with VDMA investigated the reasons behind the reluctance on the part of manufacturers to set up an independent service business. Besides the effort involved in setting up the new organization, the respondents cited customer unwillingness to pay extra for services which they expect to receive free of charge as part of the new product business. Virtually every manufacturer can point to an instance where a customer expected an old pump, valve or fitting to be repaired on a goodwill basis even if the item was ten or twenty years old. Chemical Industry Expects 24/7 service Then there is another challenge. Users in and around the chemical industry expect full service coverage on a 24/7 basis anywhere in the world, A special edition from PROCESS something which small and mid-tier companies may find very difficult to provide. However pump, valve and controls manufacturer KSB shows how it can be done. KSB set up its own service company and is now one of the leaders in the European rotating equipment service market. Services currently generate around a quarter of KSB’s corporate earnings. The company plans to significantly expand the business over the next few years in the Asian and US markets. “We have identified significant demand for pump spare parts in the mining industry in Asia and America,” reported Bernd Garbe who is the CEO of the KSB service company. At KSB, repair is not the first phase of the after sales service business. “Commissioning services are included in our new pump quotations,” said Garbe. The KSB repair and maintenance service portfolio is no longer limited to the company’s own products. Repair and retrofit of


ACHEMA Worldwide News2/2015
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