Performance measurement systems in the after-sales service: the case of durable consumer goods

In today’s competitive markets, companies are shifting from a Product-centric to a Customer-centric view. The after-sales (AS) activities – those activities taking place after the purchase of the product and devoted to supporting the customer in the usage and disposal of the goods – can become a key differentiator and a major profit source. The importance of AS service is shown, for instance, by figures regarding the computer industry in the U.S.A.: AS activities account for 24% of revenues and 45% of profits of OEMs; in other industrial sectors after-sales accounts for 10-20% of revenues and 20-40% of profits. Thus, after sales cannot be merely a set of operative activities, but rather it plays a strategic role, affecting the definition of the product-service mix offered to the customer and the physical and organizational configuration of the overall logistics chain. In the past and present years, a plethora of literature dealt on the topic of performance measurement. However, due also to the perception of after sales as a “necessary evil”, no significant emphasis has been put on the definition of a structured business performance measurement system. Monitoring and measuring AS activities has to ensure a proper balance between business and operational objectives and their assessments. In addition, since more actors are involved along the service chain (starting from the part supplier, to the product manufacturer itself and distribution tiers), an integrated and multi-attribute set of measures needs to be properly designed. In this context the purpose of the paper is: i.) to review the existing body of knowledge about AS performance measurement systems and the industrial practice in durable consumer goods – automotive, home appliances, consumer electronics - through an empirical research performed within the ASAP research project and, ii.) to propose an integrated framework for AS performance measurement consisting of three levels (business, process and functional).