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Service Excellence in Mechanical Engineering

Winning companies in mechanical and plant engineering use this phase to grow against the trend and gain market share. A key factor for both profitable growth and real differentiation is the after-sales and service business – which, in many companies, does not receive enough focus compared to the new machines business. Additional external challenges, such as a stronger competition from the gray market or a lower readiness to travel, require new approaches. It is crucial to further develop the after-sales area, leverage efficiency potential, and increase customer proximity.

After-sales business is crucial for company success

A targeted after-sales business can make the difference between winning and losing companies in mechanical engineering.

Group I: Winning companies
In winning companies in mechanical and plant engineering, the after-sales and service business not only significantly contributes to the overall margin with returns of >25%, but also represents a relevant share of total revenue (>20%).

Group II: High revenue share from service business, but not profitable
Companies that generate a high share of revenue from their service and spare parts business, but without sufficient profitability, often show inefficiencies in their processes, e.g., in spare parts offer processing or scheduling. In addition, inadequate or lacking transparency over relevant KPIs means that companies do not sufficiently monitor their cost structures.

Group III: Good margins, but low revenue share from service
Companies that generate good margins but have a low revenue share often lack clear objectives and a well-positioned, extensive product portfolio that is actively marketed. They lose market share to competitors, especially the gray market, due to too low speed or undifferentiated pricing.

Winning companies work towards three goals in the after-sales business

High Speed
Winning companies ensure fast response and fast delivery times worldwide to minimize downtime for their customers. They have high spare parts availability, are easily and quickly accessible to their customers in case of problems, and can resolve these problems effectively and promptly.

Active Market Engagement
An active service sales team sees itself as a partner to the customer and tailors its offering to the customer’s needs – with a well-defined, extensive after-sales product portfolio. This requires good transparency over the installed base to target the sale of spare parts or upgrades effectively. Tools can include maintenance contracts and digital service platforms.

Scalability
Aligning after-sales departments with the overall organization’s growth plans can only be achieved through a well-thought-out strategic concept. After-sales must not be merely an “appendage” to new machine sales – it must be understood by the organization as an essential part of the business model.

Service Excellence approach by Munich Strategy (Overview)

Munich Strategy supports transformation projects through individual Service Excellence initiatives. Securing growth, efficient use or resources, and preparation for the post-crisis period are the targeted goals. Our approach can deliver outstanding results for greater after-sales performance within just three to four months.

CONTACT

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Munich Strategy GmbH & Co. KG
Türkenstraße 5
80333 München

t +49 89 1250 1590
presse@munich-strategy.com

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