Using Online Video for Service and Repair

YouTube
Videos for iMac Repair

As we described in our previous post, we recently had a hard drive in our iMac crash. After learning of the $420 dollar charge, and the inability of the Apple Store to put in the model that we wanted.


Reliability vs. Capacity

We wanted to downgrade to the higher reliability and lower heat smaller drives, and have opted for a Hitachi Deskstar 320 GB disk. We took out the 500 GB disk that came with the iMac and ran it in an enclosure and were disturbed by the heat it created. Little discussed is a univeral feature of new items. The newer a technology, often the less reliable the technology.


We decided to repair the iMac ourselves. One of the best sources of information on this is not from Apple (they do not endorse users to perform this replacement as they consider it too complicated) but from YouTube. Several users have posted how to remove the front integrated display to get to the drive bay. We have assembled several computers ourselves, and replaced numberous hard drives and this is the first computer we have seen that has its hard drive so difficult to reach that it requires a special approach.

[tube]2YsCTNVEYt8[/tube]

[tube]eBAawbp2GUE[/tube]

youtube=http://www.youtube.com/watch?v=2YsCTNVEYt8

youtube=http://www.youtube.com/watch?v=eBAawbp2GUE

These people posted this video for no profit, and it has helped probably many Mac owners do internal work themselves. Since Apple does not want people opening the case of iMacs, without user created guides, the information of how to open the iMac case would never be made available. Kudos to the YouTube community.

What We Learned from the YouTube iMac “Service Video”

  • What tools we needed to buy before we attempt the replacement (allowing us to order the tools along with the new drive so they all arrived at roughly the same time)
  • How to perform the case opening in a fine level of detail.

Videos are amazingly good tools for learning how to perform complex multi-step activities — and thus are perfect for service parts repair operations.

The Use of Video

Video is popping up here and there in service management. For instance there are DVDs that deal with service management that can be purchased. Below are a few examples that are available on Amazon.com, but the titles are not very numerous, nor all that specific.

Maytag Repair

Motocycle Repair
There are several reasons why DVDs are not the best medium for repair videos.

  • Many people have a small video to contribute and will not go through the effort to produce an entire DVD
  • DVD’s tend to represent the interests and perogatives of the OEM. However, a number of unapproved techniques can be posted by users that the OEM would never publish.
  • YouTube and web video in general is far more convenient for the user
  • The cost is much lower
  • YouTube serves as a central online library for thousands of online videos

YouTube As a Service Video Library

The largest repository of service and repair videos in the world is no doubt on YouTube. However, it is not manufacturers or their service organizations that are leading the way, but individuals who are posting videos out of personal interest and in their spare time. This is yet another example of innovation not coming from inside of companies, but from outside, and from the general public.


Parts Databases and eBay

eBay has created the largest service parts database in the world, and it was not created by any one company (eBay only created the platform), but by the collective efforts of many individuals and companies simply through the listing of items. To read about this, see this post.

http://www.scmfocus.com/servicepartsplanning/2007/07/22/service-parts-databases-and-ebay/


Using YouTube As a Video Server

Posting videos to YouTube is beneficial for several reasons. Once a video is uploaded to YouTube, it can be presented on any blog, as we have presented videos within the post of this blog. Therefore, the video can be both available to those searching YouTube and those searching the company’s service site. A series of service videos could be created for the most common repair items for a company’s products, posted on YouTube, and then also posted on a service parts repair site. Here is an example of what we are describing.

http://www.servicepartsportal.com/?page_id=255

Conclusion

Companies focused on service should begin taking advantage of video, integrated into blogging software to improve the quality of their service capabilities and to distribute this information to the public.


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Automotive Dealers Mostly Useless

Money for Nothing

The degree to which dealers are “taking it easy” is evident in the latest Consumer Reports survey where despite the overwhelming advantages of being part of a dealer network, dealers on average provide a customer experience that is 7% lower than that of independent maintenance shops. However it gets a lot worse when actual repairs are needed. For those that required repairs, only 57% of customers were satisfied with dealers vs. 75% who were satisfied with independents.


The consumer reports survey is a stark condemnation of automotive dealers.

Why Do Dealers Perform So Badly?

So the natural question is why are dealers performing so badly. The traditional concept is that dealers provide better, although more expensive service, and that they provide better service because of the following:

  • They are trained by the manufacturer
  • They have information available from the manufacturer
  • They are more expensive
  • They know the cars better because they work on the same make over and over again.

Clearly the outcome (service performance) does not match the bullet points above, and in fact, a number of the bullet points above are dated. For instance, Honda stopped sending its mechanics to its own internal training program several years ago, which by most accounts was excellent, and has instead outsourced its mechanic training to a trade school in Arizona, which is nowhere near as good, and which does not specialize in Honda. Knowing little beyond basic repair, mechanics are now increasingly reliant upon Honda’s remote service technicians that are available by phone out of Honda’s Southern California main office. Honda at one time had a sterling reputation in service maintenance, and it now no longer does. If you bring your Honda into a dealer now, you can expect a technician trained by a generic trade school which was a low cost bidder to Honda.

The Monopoly Explanation

Most likely, automotive dealers are not better because they do not need to be to survive. This is the best explanation, when everything else is tilted in the dealer’s favor, and they still cannot perform in a manner competitive with companies with far fewer advantages. Of course, this does not even include the costs that dealers charge, which is widely known to be exorbitant and far more than independent stops.

Service Parts Website Incompetence

I first found how bad dealers performance was when we tried to find service parts on their website for online purchase.

See this link for the full article:

http://www.scmfocus.com/servicepartsplanning/2009/05/15/auto-service-part-networks-are-a-mess/

As I recount in the article, I had a devil of a time finding a very simple part (the right interior door handle cover to a 97 Honda Accord), and after visiting many sites for hours, I can state with confidence that dealers have no idea how to put together a service parts transaction website. Furthermore, I question the logic of having manufacturer’s outsource their parts management to dealers, when manufacturers are much more capable of doing themselves or outsourcing it to companies that actually know how to manage large service parts inventories, (Amazon.com is extremely capable of creating a service parts shopping site.) Is this a strategy designed around enhancing the customer service, or a compromise thrown out to the dealers to enhance dealer profits?

A Better Model

Additionally, since cars should be built to order items, and ordered online, out of small showrooms that just stock test models, combined with the fact that dealers can neither maintain websites nor provide service superior to independent shops, the dealers value-add to the car buying and maintenance cycle is not apparent.

honda_dealership_800x532
Dealerships typically have very nice buildings. However, aside from architectural flair, dealers are not a value added part of the purchasing or service chain. Wise automobile manufacturers of the future will offer their cars direct from their website (or from a small retail outlet with test models) – saving tremendous money in reduced inventory (not having cars sitting around on lots), and allow independent shops to flourish though both providing a top-notch service parts website (for both dealers and customers), and through offering extensive service documentation with the creation of a service parts portal which publishes and builds on maintenance information by allowing mechanics in the field to contribute to its content. (see the example of just such a portal below)

http://www.servicepartsportal.com/

The New Dealer-less Model

Any car company that were to operate under the dealer-less model, would be extremely cost competitive with the current manufacturers running the cost heavy and inefficient dealer model that have to base many of their decisions not on what is right for the customer but what makes dealer happy. In fact, they could not be effectively competed against on the basis of either cost or service parts management or overall service level.

Conclusion

Dealers appear to be cruising on their monopoly position and the fact that customers come to them without considering all of the alternatives. The evidence for this is their very poor showing in terms of customer satisfaction for repairs, and in their inability to create or maintain service parts websites. Given the technological development of the web, dealerships are no longer necessary and should be done away with. However, it is going to take a car company that brings a novel disruptive approach to the industry to make this happen. Currently, the auto industry completes on things like quality and style, however, there are numerous other aspects that can also be competed upon. One is the service supply chain, and another is a remote dealer model. A company which got these aspects right would be at a serious advantage in terms of both customer experience and costs.

References

This is actually a very good blog on automotive dealers. However, this article is symptomatic of the problem in terms of thinking about dealers.

http://wardsdealer.com/ar/autowhoopeebankrupt/

In it the author, who seems to know a good deal about dealers bemoans the closing of dealerships by the large American automotive manufacturers. However, the analysis seems misplaced. While the author is focusing on the number of lost jobs, what he is not focusing on is how little value the existing dealer structure adds to the process and to the consumer. Jobs that do not add value in an economy do not deserve to be saved (of course this applies to those with degrees from Harvard and Wharton who work on Wall Street over people that work for dealers of course). Still, why is there no mention in these articles of the atrocious behavior on the part of dealers, and how dealers perform far worse than independent repair facilities, or how their inventory heavy push model of distribution is completely archaic? For us the question is not why the current dealers being closed are being closed but rather other dealers are even in business.


Why Auto Parts Distribution is So Inefficient



Big Problems in Automotive Service Parts Networks

In our previous post we discussed the problems with how automotive service parts websites are dominated by dealers. We also discussed how this is inefficient and why these web sites should be centralized and either managed by the manufacturer, or simply outsourced to a company that has this as a focus.

http://www.scmfocus.com/servicepartsplanning/2009/05/14/auto-service-parts-websites-a-problem/

However, after further research it turns out automotive service networks have even bigger problems than this. This quote is from the HBR article called Winning in the Aftermarket:

Some years ago, when we studied the after sales network of one of America’s biggest automobile manufacturers, we found little coordination between the company’s spare parts warehouses and its dealers. Roughly 50% of consumers with problems faced unnecessary delays in getting vehicles repaired because dealers didn’t have the right parts to fix them. Although original equipment manufacturers carry, on average 10% of annual sales as spares, most don’t get the best out of those assets. People and facilities are often idle, inventory turns of just one to two times annually are common and a whopping 23% of parts become obsolete every year. – HBR

Improper Parts Planning

When consultants for service parts planning software company MCA Solutions goes into an account and uses its SPO software to perform inventory re-balancing, they often find that parts are kept too low in the supply network. This is often because fill rates are only being locally managed and local managers are attempting to move parts to where they will eventually be consumed. The problem with this is that transferring parts from a forward location to another forward location is less efficient than moving parts from the parts depot to the forward location. Secondly, there is no reason to move a part to a forward location unless there is a high probability of consumption, or unless transportation lead times are particularly long. This analysis of where parts in the field should be located goes by a number of names including multi-echelon inventory optimization, redistribution and inventory re-balancing.

See the diagram below.



See these posts for more on part redistribution.

http://www.scmfocus.com/servicepartsplanning/2008/04/23/drp-vs-multiechelon-planning/

http://www.scmfocus.com/sapplanning/2009/04/23/inventory-balancing-in-spp/

Generally, the independent dealer model continues to work against rational inventory pooling. AMR Research (now part of Gartner) does have a good point when they bring up this point in their paper Service Parts Planning and Optimization.

During the course of this research, we found SPP applications tended to be very tacticalin nature, solving specific inventory, fill rate, or service-level goals. Oftentimes service is still being viewed as a cost center, and SPP applications are not necessarily viewed as the keys to a greater world of service nirvana.
One explanation is that the buyers of SPP software tend to be planning managers ordirector-level planners who have no jurisdiction over service and repair or other areas of the SLM model. Other reasons include outsourcing, where OEMs have outsourced the service process but retain the planning aspects, or the fact that the company was never in charge of service in the first place—think of an auto OEM and the dealers that actually provide the service.

During the course of this research, we found SPP applications tended to be very tactical in nature, solving specifc inventory, fill rate, or service-level goals. Oftentimes service is still being viewed as a cost center, and SPP applications are not necessarily viewed as the keys to a greater world of service nirvana.One explanation is that the buyers of SPP software tend to be planning managers or director-level planners who have no jurisdiction over service and repair or other areas of the SLM model. Other reasons include outsourcing, where OEMs have outsourced the service process but retain the planning aspects, or the fact that the company was never in charge of service in the first place—think of an auto OEM and the dealers that actually provide the service. – AMR Research

Better Service Parts Planning Begins with Cooperative Planning

Rather than having every dealer attempt to manage its inventory, a much more rational and effective setup is for the dealers to pool their parts at a local depot and for the depot to manage the parts for them. Daily local “milk runs” would ensure part flow to the dealers, and would reduce the poor inventory turn of parts at the dealer location. A series of these depots can then be large enough to be electronically connected and to have their inventory represented in a web order fulfillment system that can better match supply and demand than can a series of disconnected dealers all trying to manage a smaller amount of inventory locally. Honda (for instance) could manage this themselves, or instead could outsource the management to a company like Amazon.com, that really knows how to produce transactional web sites and knows how to match supply and demand. This solution would be vastly superior to the current one where small dealers attempt to manage their own service parts websites (and where it took us 2 hours searching various dealer sites to find that we would have to call in to order a part)

Rick_Wagoner_GM_Looking_Sad
What is happening in the dealerships is a disinterest in making changes or becoming more flexible in order to adopt new technologies. Companies can make a lot of money in the short-term by simply living off of monopoly power. GM was the poster child for inept management, inward thinking, abusive supplier relations and unresponsiveness to customers. A good catchphrase for management consultants could be “Don’t be Like GM.” While Honda quality is much better than GM’s ever was, Honda’s dealer network with respect to their service parts management is not all that much different. In fact most manufacturers seem to employ the same inefficient system. This demonstrates the restrictive influence of the dealership system that no matter how good the car company, the dealer system remains anachronistic.

It seems often that the large American car companies have little interest in their service operations. Instead they prefer to spend their money on advertising. They have lost the battle for the aftermarket, and this reflects in their new sales, although they are unable to make the connection.

To quote again from the HBR article Winning in the Aftermarket:

In the automobile industry, for example, there’s a distinct correlation between the quality of after sales service and customer intent to repurchase. Brands like Lexus and Saturn inspire repeat purchases by providing superior service, and, consequently, they have overtaken well established rivals like Ford and Chrysler. – HBR

Conclusion

The current dealer centric automotive service distribution system is an anachronism and is probably one of the reasons that dealerships have such high costs. Instead of attempting to reduce these costs, dealers are simply passing on their inefficiency to the consumer. However, dealers should be wary. While they have used political finagling to prevent web-based car purchases, this will eventually come to pass. The only thing that the dealers are really necessary for is for providing local service. They should do what they can to make their service operations, which includes service parts planning and management as efficient as it can be. A big part of the answer to this is to begin cooperatively or centrally planning and pooling inventory.

Parts Hub

The parts hub concept has also been proposed by John Snow, at Enigma, which is a software company focused on parts procurement decision support. The post on this topic can be found here.

http://www.uptimeblog.com/aftermarket/how-fewer-dealers-can-sell-more-parts/2009/05/

Reference

Service Parts Planning and Optimization, ARM Research 2007

Post-Reference

After this post was published, we found that auto dealers have a considerably poorer track record on customer service for repairs than independent shops. This promoted us to write this article that questions the validity of dealerships generally and proposes a dealer-less model.

http://www.scmfocus.com/servicepartsplanning/2009/05/18/automotive-dealers-mostly-useles/

John Snow has some interesting things to say about this concept at the link below.

http://www.uptimeblog.com/electronic-parts-catalogs/simplifying-parts-sales-make-it-easy-for-the-customer/2009/05/


Why Auto Parts Websites Are a Problem


Caught in a Time Warp

It is always amazing to come upon a technology that is so amazingly underutilized. This would be the case for service parts online databases.

The Story

We needed a door handle assembly part for a 1997 Honda Accord. First we started with eBay, which really had a pretty small inventory. We could only find the door handle assembly for a four door, not for a two door. This was a dealer only item. The trouble began when we started looking through dealer websites for the item. The experience began to get us thinking that the dealer value-add is seriously in question. Dealers are not necessary to buy cars (they could be bought online, but tested at a manufacturer sponsored center in a mall that had just a few models). The care could then be either transshipped from a different location, or simply build to order. However, instead of this we have this medieval auto dealer system that holds massive amounts of inventory so buyers will make impulse purchases “that day.”

Service Databases

When looking through the websites of dealers, it was absolutely maddening to try to navigate them. Most the sites are caught in a time warp and exhibit the worst of web navigation and design. Some of them ask for contact information so they can treat the desire to purchase parts as a “lead.”

SFHonda
San Francisco Honda, like 99% of the dealerships, seem to seriously misunderstand what the web can do, and how it can help automate transactions. Now we will be calling to the dealer, just like we would have back in 1940.

Why Has Online Parts Supply Demand Matching Been Decentralized to Dealers?

Why does Honda allow dealers, who lack the interest or size to develop competent transactional websites to sell auto-parts on-line? Why are Honda, and other major manufacturers, not managing this with a single website and a national network. It appears as if the dealer network (a way for manufacturers to sell franchises and not have to worry about retail, is interfering with the new realities and efficiencies of the web. Automobiles may have to be serviced locally, but there is no reason, with our fast shipping network, for parts to be managed at dealer locations. And especially when a customer wants to order a part, there is absolutely no reason they should have to a dealer to do so.

Its does not have to be this way. The fulfillment could be performed by dealers, but Honda could manage the front-end, much like Amazon.com.

Learning from Amazon.com

The lesson from Amazon is that the web based supply demand matching no longer needs to be performed by the same organization that performs fulfillment. See this article on Amazon.com and how they serve as a supply demand matcher.

http://www.scmfocus.com/sapplanning/2009/05/07/gatp-atp-trees-and-amazon-com/

IT and Monitoring Competence and Fourth Party Logistics Providers

The concept of multi-partner coordination enabled by monitoring tools is a concept in logistics called fourth party logistics and is covered in this post.

http://www.scmfocus.com/fourthpartylogistics/2009/05/23/fourth-party-logistics-providers/

It’s a sad fact that there is simply not a lot of thinking going on in the management of service parts.


Where Are the Books on Parts Planning?


Book Availability

We have written a number of times about how under-emphasized both service management and service parts planning in particular is and continues to be in companies. However, what surprised us to an equal degree was a recent search for books on this topic. We stopped by Amazon.com and performed a search for “service parts planning” and received this result.


What it Means

For those that do not search Amazon.com very frequently, we can tell you how unusual this result is. By the third result, we are already getting into books that are so old or out of print, that there is no image posted. Also notice that this third listing has nothing at all to do with service parts, but came into the results in any case because there are so few books on this topic. One of the books is completely dedicated to service parts planning in SAP. However, what if you are a company that does not use SAP? This book will probably not cover what you need then. The second book is related to algorithms for service parts supply chain. This would probably answer a few questions for the technically inclined, but it can not be considered a book for business people trying to understand service parts planning and does not cover the topic generally. If we change the search to “spare parts planning” we get similar results, so the terminology used does not change the results much.

You can do the search yourself and see the full results. However, of the next few pages of results, we only found the following book to be applicable.


And this is not a book specialized on service parts planning per say, but simply service parts. This book covers service parts generally, but does allocate chapters to things like forecasting and inventory management for service parts.

Best Books and Articles

This is a listing of the top books and articles in the field. The list can certainly grow.

Books

  1. Analysis and Algorithms for Service Parts Supply Chains – John A. Muckstadt – http://www.amazon.com/Analysis-Algorithms-Operations-Financial-Engineering/dp/0387227156/ref=sr11/105-0952385-1563663?ie=UTF8&s=books&qid=1185121839&sr=1-1

  2. Service Parts Planning with mySAP SCM: Processes, Structures, and Functions – Jörg T. Dickersbach – http://www.amazon.com/Service-Parts-Planning-mySAP-SCM/dp/3540326502/ref=sr11/105-0952385-1563663?ie=UTF8&s=books&qid=1185125847&sr=8-1

Articles

  1. Winning in the Aftermarket – HBR June 1006 – Cohen, Agrawal, Agrawal

Conclusion

How are the next generation of service parts planners and consultants to be trained if there is not literature commonly available on the topic? Our conclusion is that considering the size of the service market there could be more material. Secondly, in order to advance the field, its important that more material be published.