UPS Research Identifies Growth Opportunities for Industrial Machinery Manufacturers
Findings indicate enhanced service may lead to manufacturer advantage
New UPS (NYSE: UPS) research has revealed that 78 percent of small- to mid-size industrial machinery companies believe their customers’ expectations for aftersales service are rising, but only 12 percent of those manufacturers indicate replacement parts and service are top differentiators for their business.
The UPS research, conducted by IDC Manufacturing Insights, indicates that while manufacturers focus on developing and deploying new machinery, the buyers of industrial machines are increasingly seeking aftersales support to maintain the complex machinery for optimal productivity.
“Industrial machinery manufacturers are in a challenging situation,” said Brian Littlefield, UPS Director of Industrial Segment Marketing. “Their pipeline depends on developing new products, yet over one-third say that 50 to 75 percent of their profitability comes from aftersales service. For many, enhancing service after the sale could be a way to differentiate from the competition and offers potential for revenue growth.”
The UPS research found that 56 percent of industrial machinery manufacturers manage aftersales service in-house and have no plans to outsource those services. The remaining 44 percent of equipment manufacturers currently use, or plan to use, a third-party service provider for long-term maintenance.
The results are based on a March 2015 survey of U.S.-based industrial machinery providers with a global customer base and $10- and $50 million in annual revenue. All survey participants reported more than half of their business is in North America with the balance evenly divided between South America, Europe and Asia, and a small percentage in the Middle East and Africa.
The UPS Industrial Machinery Manufacturing Insights executive summary can be downloaded at UPS.com/IndMfg.
UPS serves manufacturers and distributors of industrial products with comprehensive supply chain services that include end-to-end visibility, warehousing, inventory management, inspections, multi-modal global delivery, returns handling, e-commerce, and insurance and financial services.
UPS (NYSE: UPS) is one of the world’s largest package delivery companies with 2019 revenue of $74 billion, and provides a broad range of integrated logistics solutions for customers in more than 220 countries and territories. The company’s more than 500,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to reducing its impact on the environment and supporting the communities we serve around the world. UPS also takes a strong and unwavering stance in support of diversity, equality, and inclusion. The company can be found on the Internet at www.ups.com, with more information at www.pressroom.ups.com and www.investors.ups.com.
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