Service Challenges in EMEA

156 Countries and over 160 Languages.

Is it any wonder that few companies really understand how to get the most from EMEA?

Reverse Logistics Magazine, Mar/Apr 2008

The term “EMEA” has been used for many years and has established itself within many job titles. However, over the last few years the responsibilities for the typical EMEA service director have increased substantially. Until recently, EMEA used to euphemistically refer to a handful of developed countries in Europe. The service model was consistent, the network stable and the issues fairly well understood.

Things have changed. The boundaries of the average installed base have become substantially broader and with it, the role of the Service Director has assumed new and diverse challenges. The Europe Union (EU) now comprises of 27 countries with a further 18 countries in Europe that are not part of the union. These accession countries, together with the emerging countries of Africa and the rapidly expanding market in the Middle East, add their own challenges in languages, customs, freight, taxes, border controls and quality standards. Isn’t it any wonder that the Service Supply Chain needs urgent attention?

The significance of countries currently outside of the EU such as Russia, Turkey, Israel and South Africa are already impacting the P&L of many service organisations and it is widely acknowledged that the percentage of the annual service budget provisioned to support these regions will increase. This growth can account for many of the new challenges surrounding logistics, inventory, repair as well as the overall service strategy.

Questions are being asked by European and EMEA service professionals about how their service organisations are meeting the new challenges. Such questions as: is my consolidated repair centre and single source logistics contract the optimal model? Are my forward stocking locations in The Netherlands and Czech Republic still providing a cost advantage? Do I have visibility of my material/product flow and a true understanding of the costs? Questions like these are becoming more frequent and the true optimal service model is more complex than ever to determine.

The value of a visible service supply chain has never been greater. Fortunately, availability of such a model is becoming more accessible, but there are pitfalls. This simplest way is through consolidation of all activities with a single provider, but at what cost? A single logistics network throughout EMEA is a common approach, but does it provide a cost advantage as well as the flexibility? The key question to be asked is: Is it my service network that is being optimised, or that of my logistics provider?

Establishing a visible service supply chain with a true understanding of the total cost of service and in the right level of detail will greatly assist in developing a solution to these common issues. Designing this level of data capture and control points within the service model is critical to success but rarely achieved within the first few months of a ramping program. However, oftentimes it is never achieved at all -particularly in dynamic market conditions.

Regardless of whether the service is delivering an acceptable level of profit (we all target profit from our service business, right?) our ability to have an in-depth understanding of our service network will ensure we continue to stay ahead of the game and make proactive changes to our delivery model.

Introducing Russia and Turkey into the EMEA fold has added an additional population of over 212 Million people. Russia alone represents a geographic area 1.8 times larger than the US. Whilst the service demands in these regions are largely centralised to within major cities, the expectation from the general public, our customers, is fast catching up with the ever increasing expectations of consumers in the rest of Europe.

Whilst the changing face of Europe and EMEA presents considerable challenge, it also presents considerable opportunity for profitable business in new markets. Those that seize the opportunities now have the most to gain -providing they have the appropriate knowledge. The key to success is understanding local market conditions and designing “visible” solutions to meet customer commitments at a profit.

Sounds simple doesn’t it? Well even for us we get presented with new challenges we haven’t found the answer to yet - did I mention the border control issues in Africa and that there are over 2000 languages spoken there? ...maybe next time.

Please drop by our booth at the RLTS in Amsterdam and chat through your issues with us. We’ll be happy to help.

Mark Walker is General Manager, Service Support at The Service Business Ltd based in the UK. Prior to joining The Service Business, Mark was Director of European Business Management for the Aftermarket division of Celestica. Mark has practical experience in diversified markets including Eastern Europe and has advised leading global corporations and service providers. Mark is responsible for the design of end-to-end client solutions including logistics, repair, call centre, inventory finance, management controls and reporting. Please email Mark at mark.walker@theservicebusiness.com or call him on +44 774 775 8132.

The Service Business provides hands-on support for the Service Supply Chain in Europe and EMEA. We drive value through Service Parts Optimisation, Service Network Optimisation and support for People and Processes. www.theservicebusiness.com