After-market logistics set for dramatic growth

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After-market services are set to grow dramatically over the next five years, according to a study produced by Capgemini in partnership with DHL.

Revenue from services, including exchange, return and repair logistics for the engineering and manufacturing, and hi-tech industries, are set to rise by 50 per cent as a percentage of total company revenue over the next five years.

On average, manufacturing companies already get 25 per cent of their profits from this area. Putting the after-market service at the heart of the company’s product strategy has resulted in considerable investments in optimising the after-market supply chain.

Jacob Verhagen of DHL said: “This study reveals the extent to which our manufacturing customers are increasingly viewing service management and service logistics as a differentiating factor in setting themselves apart from their competitors. After building an effective service supply chain over the years they are now using this as a vehicle for service differentiation. In an increasingly complex operating environment, centralised supply chain management is a hot topic in most of our customers’ boardrooms and now is a high priority as a core part of business.”

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