Outsourcing extends to repair and maintenance work

JOY ORLEK AS CUSTOMERS increasingly narrow the focus of their core business, supply chain solution companies are broadening the scope of their activities way beyond traditional warehousing and distribution models. The amount of core work on which a customer focuses has changed dramatically, says UPS Supply Chain Solutions director Thore Saether. “They’re not looking at warehousing and distribution, staff issues, cost issues and cash flow. They’re totally focused on the marketing and manufacturing of the product – everything else is outsourced. And that includes certain repair and maintenance functions,” says Saether. “We have, in a modest way, become engineers in repair and return maintenance for a number of customers worldwide.” And while South Africa tends to follow trends a little later than anyone else, Saether has noticed a move in that direction locally as well. “A number of the clever companies are aggressively analysing their core competence and outsourcing the rest - and the end user is clearly the greatest beneficiary. “Creating a difference in customer service is an abiding passion – how they can use people like us to make a difference to their marketing plans for their customers. If they’ve outsourced the traditional warehousing and distribution function, next they’ll look at repair and return work. “And while we’ll never have skilled engineers working for UPS, we will have skilled repair people who can do relatively elementary repairs," he said. “By taking over the call desk function, picking up the product, repairing it and returning it, in one case a 9-day turnaround was reduced to two,” says Saether. “Customers in certain competitive product lines are beginning to ask how they can use people like UPS to improve their marketing and service levels. “A key element is the necessary resources – both financial and intellectual – which is something that a company like UPS can offer,” he said.