Sustainability in After Sales
How can equipment and machinery manufacturers make their service portfolio greener and more competitive?
As industry clambers to become carbon-free, socially responsible and regulation-compliant, the growth opportunities for equipment and machinery manufacturers are unprecedented. The obvious opportunity lies in driving sales of new, more energy-efficient equipment and machinery, yet we shouldn’t overlook the significant role that after-sales service plays. With the right sustainability-oriented services, OEMs can achieve a major environmental impact while also realizing sustainability gains. This new Deloitte whitepaper gives manufacturers the insight and best practices they need to plan and implement a sustainable service transformation.
What does sustainability have to do with service?
Today’s sustainability to-do lists are enterprise-wide and extremely long, focusing on issues such as designing more energy and resource efficient products, establishing sustainable sourcing programs, limiting ESG exposure across the supply chain and achieving carbon-free manufacturing. Service seems insignificant in comparison and may be overlooked as a result, but a closer look at the equipment and machinery lifecycle paints an entirely different picture.
A whopping 65% of greenhouse gas (GHG) emissions come from commissioning, operation, resale and – finally – disposal. Service can have an enormous sustainability impact as it tackles the lion’s share of indirect emissions across the value chain of a typical machine manufacturer. There are two dimensions to consider in this context:
- External: New sustainability-related services enable customers to use and operate equipment in a more eco-friendly way.
- Internal: By deploying sustainable practices as part of service fulfillment and operations, OEMs can optimize their own supply chain sustainability.
The sustainable service transformation comes with positive top and bottom-line effects as well. Let’s find out how to make this happen.
European PESTEL Analysis and Trend Clusters
Five thematic clusters derived by consolidating key themes
Framework for sustainable industry services
Based on insights from our sustainability projects in the machinery sector as well as industry best practices, we have developed a framework that focuses on those areas and levers that will drive long-term service growth, bring emissions and costs down, and even retain access to the valuable expertise of your service technicians.
- Field service: reduce the carbon footprint of the workforce, which will cut costs as well as mean time to repair
- Spare parts management: scale back inventories and transport in order to minimize the associated environmental strain and operational costs
- Equipment operation: optimize equipment efficiency and reduce energy consumption across the entire lifecycle
- Service model: unlock new revenue and differentiation potential by introducing novel service business models with green value propositions
Opportunities for sustainable value along the supply chain
What’s the best way to kickstart your sustainable service transformation?
It’s 2022 and still most of the companies we deal with have a very limited focus on sustainability. Their efforts tend to prioritize limiting business trips to reduce carbon footprint, adapting to new legislation or allocating new board responsibilities. While these issues are indeed important, we believe that leadership in sustainability will soon become a critical success factor and may even determine a company’s survival.
Leadership in this context is less about pursuing a lot of haphazard, so-called high-visibility initiatives and more about adopting a holistic, full-scale sustainability strategy. After sales service can be the ideal first step for manufacturers of equipment and machinery to do just this – and the time to act is now. Here are the five actions we recommend to kickstart your transformation journey:
Re-calibrate your service ambitions – determine whether service is an essential part of your sustainability strategy
Verify your sustainability bonafides – find out exactly how sustainable your services and operations really are
Define future services and set actionable priorities – pinpoint which operations need to improve and define which new sustainable services you want to offer
Break them down into initiatives and actions – start to derive initiatives and actions that will address critical areas and move you towards the future sustainable service operation you want
Draw a roadmap and start with step one – Design your roadmap and make it happen – what initiatives do you need to tackle, in what order and with what resources?
For more information on sustainable industry services, you can download the whitepaper here.
If you think a sustainable service transformation is in your future, get in touch with us.