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THE FUTURE OF THE SERVICES SUPPLY CHAIN

A DHL perspective on key trends and technologies in service logistics.

The support of products in the field was once seen as the manuf acturing sector’s poor relation. Product companies naturally focused their efforts on the chain of value-adding activities between concept and sale: the identification of customer needs; the engineering of new solutions that fulfilled those needs; high quality, cost-effective production; and the delivery of the finished product to the point of use.

The ongoing requirement to maintain, repair or upgrade products once they were in the customer’s hands was, for many organizations, an additional burden that they would prefer to do without.

However, companies can’t afford to think that way anymore. In most industries, commercial, technical and regulatory pressures are transforming the importance of service and support activities. Foremost among those pressures are rising customer expectations. Users, whether they are individuals or businesses, accept that products may break down or wear out. When thathappens, they want functionality restored with the minimum possible delay and inconvenience. The Customer Experience has become King.

As products get smarter, meanwhile, they are increasingly able to relay information on their own performance and health remotely to their manufacturers or to third party support organizations. Today, the Internet of Things (IoT) underpins a host of opportunities for manufacturers, from condition-based and predictive maintenance solutions to new business models built around advanced services. Turning digital insights into value, however, requires the support infrastructure and logistics systems to ensure that equipment can be repaired or replaced quickly and costeffectively.

Customer and regulatory pressure to improve sustainability also has implications for service logistics operations. The need to recover products and components for reuse, remanufacturing or recycling has created the need for sophisticated reverse logistics processes. And those pressures may also drivedemand for extended product operating lives, with mid-life overhauls and upgrades.

This increasingly complex, increasingly demanding service environment will have significant implications for logistics. We believe that many companies will need to reinvent their service supply chain and logistics processes over the coming years, and that the most successful organizations will make extensive use of new operating models and advanced digital tools to do so.

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