In the world of the machine industry, product-related services are often essential for the functionality of a machine and support its maintenance and repair as well as the supply of spare parts.
At a certain point, however, it can become unprofitable to continue offering the service. Sometimes it is simply no longer possible with reasonable resources if your suppliers are discontinuing spare parts by the dozen. Then you should think about the right strategies for terminating support for these products in a structured and professional manner.
In fact, there are some opinions that, for example, a spare parts availability of 10 years must be guaranteed. In other sectors, there is talk of 15 years. In fact, however, there is no legal framework at EU level that specifically regulates this. The EU regulations only refer to an appropriate support period so that the utility value of the primary product and therefore the basis for the investment decision is not unduly reduced.
In legal jargon, this simply means that you must not maliciously violate good faith. Otherwise, you are relatively free if you take the regulations as a basis. At the end of the day, however, what constitutes a breach of good faith would of course be a matter of interpretation and your customers will naturally have a different idea of this than you do. You are therefore well advised to follow the suggestions of your respective industry associations.
Responsibilities must be clarified
First of all, it must be determined within the organization who is responsible. In other words, who can initiate an outphasing process and monitor the current situation accordingly in order to find the right time? This requires clearly defined responsibilities.
Finally, the person responsible must also continuously obtain the right data in order to be able to evaluate which services have become obsolete and which products can no longer be supported in the desired quality at a reasonable cost. The next step is to precisely define standardized discontinuation processes.
Evaluate service life and market relevance
When introducing a product, you should consider how long its service life could be and how long you would like to support it as a manufacturer through service. Even if you don't necessarily have to adhere rigidly to the provisions once they have been made. The automotive industry is very strict in this respect. There, the length of time for which a primary product will be supported by the service is often very precisely defined at the time of market launch. But that doesn't have to be the case everywhere.
In any case, it is important to know how many machines of a certain type are still installed in the field and for how many of them there are still performance obligations in the form of warranties or service agreements. The internal workload is also of particular importance when making a decision. Which products require an unreasonable amount of effort for my customer service team to provide service because, for example, many parts are no longer available due to their age or because the know-how in the organization has simply drifted away over time? Be it retirement or other areas due to internal or external job changes of technicians.
Analysis of critical components and consequences for the customer
The next step is to identify the critical components of the service that require immediate attention. This may include the maintenance and repair needs of the product as well as the supply chain for spare parts. Once identified, a plan must be created to phase out these components and streamline the process.
To ensure customer satisfaction, it is also necessary to consider the consequences for the customer. Are there external providers who can step in for customers if help is still needed? Do I need to keep a few spare parts in stock to be able to supply them a little longer? Obsolescence management is the common keyword here. It may also make sense to develop a suitable self-service strategy. This would allow customers to try to resolve problems themselves if you no longer offer maintenance for a certain product.
Effects on your own team
The potential impact on your own workforce should also be considered. Staff responsible for delivering or managing the service may need to be retrained or assigned to other roles. Clear communication and support is vital to ensure a smooth transition for all involved.
Monitoring the discontinuation process
Finally, it is necessary to monitor the discontinuation process and ensure that all elements of support are effectively transitioned, including documentation, training and support. This includes ensuring that all stakeholders, including customers, suppliers and other relevant parties, are aware of the changes and their implications. This must be communicated clearly and with sufficient lead time to ensure that all parties involved, whether internal or external, have enough time to react accordingly and position themselves correctly for the time afterwards.
