Retailers and OEMs can cost-effectively minimize the risk of losing customers by adopting a solution, like the Servigistics offering, that can help them increase service parts fill rates while reducing inventory and driving higher customer loyalty, asserted Chakra.
For his part, Minahan, writing in a research alert on the Reynolds-Servigistics deal, pointed to data from Aberdeen's benchmark study suggesting that a high level of service parts automation can indeed produce significant results.
"Companies using discrete service parts management systems such as Servigistics reported a 22 percent reduction in service parts inventories; 42 percent more inventory turns; a 10 percent improvement in first-time fill rates; and 16 percent fewer stockouts than companies conducting service parts management activities manually or with only marginal levels of automation," the analyst wrote.
Servigistics' Gary Brooks, the provider's executive vice president for marketing and alliances, notes that Subaru of New England, which has been using the Servigistics service parts management solution, has been able to reduce its inventory by 60 percent while increasing its revenues by 12 percent. "That's because they had the part, they were able to sell it, and they were able to perform the service that went along with that part," Brooks said.
Brooks added that this type of solution is most applicable to companies that have upwards of $20 million invested in service parts, "which really makes this work for just about any company in automotive." And Kapolka said that the solution would be applicable to the OEMs and suppliers in the commercial automotive market, as well as the large fleet organizations.
Benefits for All Sides
Kapolka said that Reynolds partnered with Servigistics in this area, at least in part, because of Servigistics' success in the high tech industry. "We see great opportunity in leveraging a technology that has proven itself [in high tech]," he said.
In addition to the Servigistics solution, Reynolds will also be offering consulting services around service parts management, according to Kapolka. "It's part of a portfolio of solutions that we're starting to look at to address what we would describe as the service lifecycle of the vehicle," he said. "There are other things in the pipeline as well, but this is a great first start."
For Servigistics, this deal provides much broader access to potential customers in the automotive industry, where the solution provider to date has counted Subaru of New England as its only customer. "Reynolds and Reynolds has a large sales force that sells into the manufacturers and the dealers, so it significantly enhances our sales reach," Brooks said. "This is the fast lane into automotive for us. It's allowing us to accelerate our penetration in this market by a couple years."
Brooks added that Servigistics is not pursuing additional relationships of this nature in the automotive vertical, although the provider is looking to extend its reach into additional industry verticals.
For more information on solutions for the service and support chain, see the articles "In the Field and All Grown Up," the Net Best Thing column in the June/July 2002 issue of iSource Business, and "Time to Prove It," the Net Best Thing column in the April/May 2003 issue of iSource Business.