Installed base information : ensuring customer value and profitability after the sale

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Doctoral thesis (monograph)
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Helsinki University of Technology, Department of Industrial Engineering and Management doctoral dissertation series, 2009/6
This thesis explores the business benefits for capital goods manufacturers in maintaining systematic records for individual products in their installed base. The research results show that such installed base information can be essential for a company interested in improving both the value their customers get from using their products and their after-sales operations' profitability. Although companies have product-related records on their sales, production, deliveries, service contracts, and service jobs, the data in the often function-specific information systems remain incompatible, and an overview of the installed base is missing. The resulting situation resembles that of manufacturing before ERP systems were introduced to unify function-specific transaction data in the manufacturing process. Whereas the ERP systems for production have been powerful in standardizing transaction data involving product and component types, the value for customers after the sale is created through product individuals. To implement information systems focusing on individual products, it is necessary to understand which functions are interested in such information and what data should be standardized and gathered. The research's main objective was to improve understanding of the reasons for maintaining installed base information and understanding of the installed base information's structure. The research's empirical part consists of four in-depth case studies in four capital goods manufacturing companies providing product-related services. In each case study, the focal company developed its installed base information systems. Consequently, several purposes for installed base information were identified towards providing customer value during the product use, both through ensuring the products' operational reliability and through supporting the customer's goals with the products. Ensuring product reliability for the customer requires that service units be prepared for servicing the individual products in their area and that the company can identify and resolve production and design problems with their products. Supporting the customers' goals requires that sales and product development can adjust the customer offers to differences among customer applications as well as changes in the customers' operations. At the same time, after-sales operations' profitability can be improved through adjusting investments in service resources and service pricing based on the serviced products. Further, analyses of the installed products and the after-sales service operations support identifying performance problems with products, services, or customer contracts decreasing after-sales service profitability and requiring corrective actions. The research revealed three main categories of information needed to support the above purposes: information on the individual products, information on the customer site where the product is installed, and information on the service events involving the product installations. These information categories enable analyses involving products, customer applications, and their performance over time.
installed base, after-sales service, industrial service, service operations management, Organizational Information Processing Theory, information systems
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