Reactive after sales service or proactive after sales service the case of kobelco construction machinery vietnam CO , LTD

THECASEOFKOBELCOCONS TRUCTIONMACHINERYVIET NAMCO.,LTD MASTEROFBUSINESS Honours HoChiMinhCity–2016... THECASEOFKOBELCOCONS TRUCTIONMACHINERYVIET NAMCO.,LTD ID:22140039 MASTEROFBUSINESS AD

THECASEOFKOBELCOCONS TRUCTIONMACHINERYVIET

NAMCO.,LTD MASTEROFBUSINESS (Honours)

HoChiMinhCity–2016

THECASEOFKOBELCOCONS TRUCTIONMACHINERYVIET

NAMCO.,LTD

ID:22140039

MASTEROFBUSINESS ADMINISTRATION SUPERVISOR:NguyenThiMaiTrang

HoChiMinhCity–2016

salesservicesmachineryi n d u s t r y

arereactiveafter-salesservice,fieldtechnicalassistance,sparepartsdistributionandcustomerc a r e T h e p u r p o s e o f t h i s t

h e s i s ist o i d e n t i f y thei s s u e ofa f t e r

-s a l e -s -se r v i c e inK o b e l c o Vietnam,thentoindicate therootc a u-s e ledtomainproblemafteranalyzingallc a u s e s ; finallyitsupposesthepotentialsolutionsthatcanbeappliedtoresolvetheproblem

Firstly,I w o u l d l i k e tos h o w myg r a t i t u d e bys p e c i f i c a l l y t h a n k i n g mys u p e r v i s o r

P r o f NguyenThiMaiTrangandProf.NguyenDinhThoforguidanceandqualitativefeedbackd e v o t e d tome.Lastly,Iwouldliketothankthetimeandsupportofmyfriendsandcolleagueswh o participatedinthisresearch

TABLE OFCONTENTS

1 INTRODUCTION 1

1.1 C OMPANY I NTRODUCTION 1

1.2 C OMPANY STRUCTURE 3

2 PROBLEMCONTEXT 5

2.1 B USINESSSITUATIONOF K OBELCO V IETNAM 5

2.2 C URRENTSTATUS OF A FTER -S ALES S ERVICEAT K OBELCO V IETNAM 7

3 PROBLEMIDENTIFICATION 11

3.1. R EACTIVE A FTER -S ALES S ERVICE 12

3.1.1 Correctivemaintenance 13

3.1.2 Emergency maintenance 14

3.2. C USTOMERCARE 15

3.2.1 Informationprovision 16

3.2.2 Warrantyextension 16

3.3. F IELD T ECHNICAL A SSISTANCE 17

3.3.1 Duringandafterwarrantyassistant 18

3.3.2 Productdisposal 18

3.4 S PAREPARTSDISTRIBUTION 19

3.4.1 Inventory management 20

3.4.2 Deliveryofsparesparts 20

4 CAUSESANDEFFECT 21

5 CAUSE VALIDATION 22

6 ALTERNATIVESOLUTIONS 24

6.1. A LTERNATIVE S OLUTION 1:A SSEMBLING GPS(KOMEXS– KOBELCOMONITORINGEXCAVATORSYSTEM) 25

Benefits 27

Cost 29

6.2 A LTERNATION S OLUTION 2:E STABLISHMORE S ERVICE C ENTERS 30

Benefits 30

Cost 31

7 ORGANIZATION OFACTIONS 34

8 CONCLUSION 37

9 SUPPORTINGINFORMATION 37

REFERENCELIST 58

LIST OFTABLES

Table1.RankingpositionofConstructionMachinerybrandsinVietnam(2009-2015) 7

Table2.Inspectionscheduleofmachine 14

Table3.Warrantytimeofspareparts 17

Table4.Sourcesofspareparts 19

Table5.Thesignificanceofdifferentfactorsinmakingdecisioninusingthe 23

Table6.CostofoneKOMEXSsystemperyear 29

Table7.ServiceAreaControlled 31

Table8.ServiceCenterExpense 31

Table9.ActionsPlan 36

LIST OF FIGURES Figure1.KCMVOrganizationChart 3

Figure2.Kobelco’sMarketShare2009-2015 5

Figure3.MarketshareofConstructionMachineryBrandsin 2015 6

Figure4.Levelofcustomer’ssatisfactionaboutafter-salesserviceofKobelco 10

Figure5.Causesandeffecttree 21

1 INTRODUCTION

1.1 CompanyIntroduction

KOBELCOConstructionMachineryCo.,Ltd.manufactures,sells,serviceconstructionandtransportmachinery.Itsproductsincludehydraulicexcavators,miniexcavators,andrecyclingmachines.Thecompanyalsooffersmachineryparts;andvariousservices rangingf r o m regularafter-salesmachinecheck-

upstoinspectionsandadvice.Inaddition,itresellsu s e d equipment.Thecompanyservescustomersworldwide.KOBELCOConstructionMachineryCo.,Ltd.wasfoundedin1999andisbasedinTokyo,Japanwithmanufacturingc e n t e r s inJapan,China,Thailand,andIndia;andpartscentersinJapanandSingapore.Ithaso p er at i on s i n S o u t h e a s t A s i a , A u s t r a l i a , N e w Z e a l

a n d , C h i n a , I n d i a , M o n g o l i a , E u r o p e , Turkey,A f r i c a , t h e M i d d l e E a s t , t h e R

u s s i a n F e d e r a t i o n

-C I S , N o r t h America,a n d S o u t h America.KOBEL-CO-ConstructionMachinery-Co.,Ltd.operatesasasubsidiaryofKobeSteelL t d

KobelcoV ie t n a m (KCMV)i s a c o m pa n y w i t h 1 0 0 % f o r e i g n i n v e s t e d byKobelco ConstructionMachineryJapan,amembersofKobeSteel,oneofthebiggestmanufacturerso f constructionmachineryinJapan.K C M V wasfoundedin2004withtheheadofficeinBienH o a 2industrialzone,DongNaiProvince,in2005onebranchwasestablishedinTienSonI nd ustr ial Zone,BacNinhprovince

From2004to2008,thebusinesswasrestrictedonlyinserviceandsupplyofsparepartsforK o b e l c

o machine.A f t e r V i e t n a m j o i n e d t h e WTO,i n 2 0 0 8 , K o b e l c o g o t t h e licensed

fordirectlyimport,andsince2009wewasgrantedthelicenseforsellingproducttotheend-u s e r s Inordertoqfordirectlyimport,andsince2009wewasgrantedthelicenseforsellingproducttotheend-uickly

respondtocustomerdemandandbetterdoingserviceandsupplys p a r e parts,KobelcoopenedtherepresentativeofficesandcustomerservicecentersinLaoC a i , DienBien,NgheAn,DaNang,andGiaLai

AFTER-SALES SERVICE SECTION

TRAININGSECTION

1.2 Companystructure

KCMVMEMBER'S COUNCIL

MANAGING DIRECTOR

ADMINISTRATION

DEPT.

ACCOUNTINGDE PT.

SALES&MARKETING DEPT.

CUSTOMERSUPPORTD EPT.

independentlyw i t h o u t supportofotherdepartments,e s p e c i a l l y C u s t o m e r Supportdepartment.

ThisthesisfocusesontheresearchofCustomerSupportdepartmentwhichplaysanimportantr o l e inthegrowthofKobelco’sbusiness.ThisdepartmentincludessomesectionssuchasA f t e r -

S al e s S e r v i c e s e c t i o n a n d T r a i n i n g s e c t i o n I n A f t e r

-S a l e s s e c t i o n , t h e r e a r e t w o sections:Partss e c t i o n providingsparep a r t s f o rmachineandS e r v i c e s e c t i o n offeringtechnicalassistandrepairingmachine

Whyd o a c t i v i t i e s o f CustomerS u p p o r t d e p a r t m e n t l i k e s u p p l y i n g s p a r e p a r t s , p r

o v i d i n g technicalassistant,d o i n g s e r v i c e s a f t e r s a l e s c o n t r i b u t e t o K o b e l

c o b u s i n e s s ?

K o b e l c o V i e t n a m isconsideredasatradingcompanythatimportsmachinefromJapanfactoryandT h a i l a n d factory,thensellstocustomersinVietnam.Thus,thetransactionbetweenthesellera n d buyercannotfinishwithdelivery,butitalsoincludesthepostsalesservice.Theafter-

salesservicegreatlyimpactonoperationandbusinesssituationofcompany

Kobelco's Market Share 2009-2015

users.ThedataofFigure2showedthat,themarkets h a r e r e m a i n e d highly1 9 % i n a v e r a

g e d u r i n g 04yearsfrom2 0 0 9 to2 0 1 2 U n f o r t u n a t e l y , themarketsharehasexhibitedthedeclineoftrendsincebeginningof2013.Itfelldramaticallyto14.9%in2013,16.3%in2014and15.5%in2015.TheassignmentofK o b e l c o ’ s BoardofDirectoristoincreasemarketshareto20%infollowingyears.Therefore,itisrequiredtofindeffectivesolutionstoregainmarketshare

Figure2.Kobelco’sMarketShare2009-2015

(Source:ERGreportinKISCO)

Market share of Construction Machinery Brands in 2015

During0 4 yearsf r o m 2 0 0 9 t o 2 0 1 2 , c o m p a r e d w i t h mainc o m p e t i t o r s , K o b e l c

o m o s t l y r e m a i n e d secondlevelinmarketwhileKomatsuwasalwaysinfirstposition;Hitachirankednumberf o u r i n 2 0 0 9 a n d n u m b e r t h r e e f r o m 2 0 1 0 to2 0 1 2 w h e r e a s H u y n d a i w a s

g r a t e d

number5in2009andnumber4intheperiodof03years2010-2012.Nonetheless,attheb e g i n n i n g ofyear2013,thepositionofKobelcodroppeddowntonumber4in2013,2014a n d 2015thatrankedafterKomatsu,Hitachi,Huyndai.BecauseKomatsuwasstillinfirstg r a d e , HitachirosetosecondlevelandHuyndaialsotookthirdplace(seeTable1)

2.2 CurrentsituationofAfter-SalesServiceatKobelcoVietnam

After-SalesServiceisasupportactivityafterproductsaredeliveredtobuyers.Itisakeyelementofproductqualityandsuccessfulcompetitionwhichfinallydependsonsatisfaction

ofcustomers.A l m o s t c a s e s , t h e missiono f a f t e r s a l e s s e r v i c e s h o u l d b e i n d i c a t e d a s

t h e c o n t r i b u t i o n ofbusinesscooperation.Itissuggestedthatthesupervisorofaftersalesservicedepartmentc a n r i s e b o t h f i r s t timea n d r e p e t i t i o n s a l e s , b e c a u s e o f t h a t i n c r e a s emarketshare.(1)After-salesserviceisconsideredasfactorofintangibleproductasstatedbyAsugmane t al.(2)After-

salesservicewasclassifiedasaprocessofbusinessnetworkbecauseitaffectedd i rec t ly t o b u s i n e s s

p e r f o r m a n c e a n d c o m p e t i t i v e a d v a n t a g e s a s s t a t e d byE a r l e t a l

( 3 ) S e r v i c e sandSalesshouldworktogetherinordertounderstandthevaluethatwecreateandt o improveprograms.Wewillprovidetoourtargetedcustomerstheaddedvaluetheyneedt o maintainlong-termrelationships Itis suggestedthat serviceshouldbeusedasavaluablet o o l inoursalestoolbox.( 4 )Tavakolietal(5)indicatedthatindustrialafter-

salesserviceisincludinggoodsandservicesw h e n sparepartsareastangibleproductscombiningwithcustomersupport

Boenitz(6)found

thatthereisthestrongpositiverelationshipsbetweencustomer-relatedlevelso f customersatisfactionandROI,economicreturnsandmarketvalue.Customerretentionhasamajorimpactonmarketshare,marketgrowthrate,market"chum"(customersenteringorleavingthemarket,evengivena stablemarketsize),competitorsretentionrates,andt h e e f f e c t i v e n e s s of

"offensive"marketingefforts(advertising,pricing,convenience)allplayar o l e indeterminingm a r k e t share Levitt(7)agreedt ha tthelong-

termrelationship between

SellerandBuyeraftersellingaproductdeterminesthelong-

termprofitabilitybecauseafter-s a l e termprofitabilitybecauseafter-s termprofitabilitybecauseafter-serviceactivitietermprofitabilitybecauseafter-scontributetomakecompetitiveadvantagetermprofitabilitybecauseafter-sandprofittermprofitabilitybecauseafter-s.Therearemanytypetermprofitabilitybecauseafter-sofafter-salesservicesuchascustomersupport,technicalsupport,productsupport,etca s statedbyGoffin

serviceactivitiescontributetomakecompetitiveadvantagesandprofits.Therearemanytypesofafter-(8)Saccani(9)indicatedthatthesuccessofafter-salesdeterminedbyseveral

majorsupportslike fieldtechnicalassistant, sp are partsdistribution, customercare.A c c o r d i n g totheprocessofcompany,customersupportdepartmentisinchargeofafter-

salesservice.Beforeputtingmachineinstorage,thetechnicalstaffwillcheckcarefullymachinestatus.Asmachinedelivery,Handoverminutesandpre-delivery

inspectionrecordswillbemadetorecordclearlyinformationofbuyersorusers,andgoodconditionofmachine.Then,themechanicwillcometojobsitefortrainingandoperationguidancetoend-

users.Inthebeginning50h o u r s o f o p e r a t i o n , t h e K o b e l c o ’ s t e c h n i c a l staffsc o n t i n

u o u s l y su p p o r t f o r m a i n t e n a n c e However,subsequentmaintenancesaswellasunexpecteddamage,thecustomersmusttaketheinitiativetocontactthecompanytoinformthestatusofmachineandb r e a k d o w n ofthemachine.Althoughcustomerscancontacttocustomersupportdepartmentf o r anyquestionsorservice’sinformationduringusingperiod,theycompletelyunsatisfiedw i t h thewayofdoingafter-

Mr.NguyenTrongHieu–CustomerSupportDepartmentclearlystatedthat:

Accordingtotheprocessofservice,themechanicswillcontacttoend-usersformaintenanceforthefirst50hoursofoperation.Duringrest,customersmustactivelyrequestservicef romthecompany.Therefore,theysupposedthatthewayofprovidingKobelcoservicewasnotprofessionaland efficient.

Mr.NguyenVanToan-ProjectManagerofIdicocompanyconfirmedthat:

Servicedepartmentlacksproactivemaintenanceofthemachine.Kobelco’smechaniccomestocheckt h e m achineonlyonetimeaftermachinehandling.Ourstaffshavet o requireservicefornextinspections.Sowewoul dnotbeforewarnediffailshappened.

ItisthereasonwhywefeltdisappointedaboutKobelco’safter-salesserviceandwillconsidermoret o usethisserviceinnearfuture.

Level of customer’s satisfaction about after-sales service of Kobelco

Satisfactory Normal Unsatisfactory

Mr.NguyenVan Hung-DirectorofVinhHungCompanysaidthat:

Ioftengetcomplaintsfromcustomersafterbuyingourmachines,theydonotgetthetakingcareofservicefrom KobelcowhileotherfirmssuchasKomatsu,Hitachi,doitverywell.

Regardingyearlyreportofafter-salesservicefromcustomersupportdepartment,thelevelofcustomersatisfactionwascollectedafterperformanceofaftersalesserviceinperiod2009-

2 0 1 5 ThereportshowedthepercentageofunsatisfactoryofKobelco’scustomerswaslow

l e v e l

around2%-6%during03yearsfrom2009to2012.Nonetheless,fromyear2013andl a t e r , itexhibitedanincreasingtrendofunsatisfactoryofclients.In2013,thepercentageroseto 8%,nearly4thtimes

comparedwith2012.Then,it

continuouslyincreasedto10%in2014a n d peaked12%in2015.Obviously,thereweremanyreasonsthatmaketheunsatisfactiono f customersandthelevelofdissatisfactionincreasedyearbyyear(seeFigure4)

Figure4.Levelofcustomer’ssatisfactionaboutafter-salesserviceofKobelco

(Source:YearlyReportofAfter-SalesService)

Thedramaticfallofcustomer’ssatisfactionaboutafter-salesserviceisassameasawarnings i g n tocustomersupportdepartmentinparticularandcompanyasawhole.Ifthisproblemisn o t c o n s i d e r e d t h o r o u g h l y a n d f o u n d t h e s o l u t i o n s o o n ,

K o b e l c o w i l l l o s e m o r e l o y a l t y customersaswellaspotentialcustomersinnearfuture.AccordingtomanagerofSales&MarketingdepartmentandCustomerSupportdepartment,companyconsideredsomepossiblesolutionsinordertohaveanappreciateaftersalesandservewelltoclients.However,itisnoteasytogetthebestonesoonbecauseitdependsonsomeelementslikethestrategy,objective,b u d g

e t , humanresourceofcompany,etc.Besidesthat,KobelcoVietnamisthesubsidiaryofK o b e l c o Japan,soKobelcoVietnamhastogetapprovalfromKobelcoJapanforbigamounto finvestmentorfollowupthenewtechnologiesapplicationformachinefromKobelcoJapan.T h e Research and Developmentce nte ro f K o be l c o Japan r esea rc hed GPSsystemnamely KOME XS t h a t e n a b l

e s c o n v e n i e n t remotem o n i t o r i n g o f m a c h i n e s ( m a c h i n e c o n d i t i o n /

w o r k i n g locationetc.).Thissystembringsremarkableimprovementincontrollingmachine

i n anytimeatanywherebysatellite.Inaddition,itcansupportandsolvemanyproblemsofa f t e r–

salesserviceactivitiesthatareexistinginKobelcoVietnamnow.Thefirstlaunchingi n Japanwasfrom2004.A f t e r that,KOMEXSwaslaunchedinIndia,EU,USA,Thailandin2 0 1 3 andVietnam,Laos,Cambodiain2016.Therefore,itispossibleforKobelcoVietNamtoimplementandapplyKOMEXSfrom2016

3 PROBLEMIDENTIFICATION

Inordertomakecleartheproblem,besidetheoriessupported,theresearcherofthisprojectprogressed tocollectsecondarydataandhaveinterviewswiththreemaingroupsasfollows:

 ThefirstgroupincludesfourpeoplewhoareworkingatKobelcoVietnam.(1)Mr.NguyenT h a n h SalesManager;(2)Mr.NguyenTrongHieu-CustomerSupportManager;

(11)T h einteractionswithcustomerwillmoreawfulifthecomplaintdoesnotsolvepositively.T h e

n e g a t i v e d i s p o s a l f r o m s u p p l i e r i m p a c t s b a d l y o n a f t e r

-s a l e -s -s e r v i c e p r o v i d e d a n d d e c r e a -s e cu-stomer’-s-sati-sfactionon-service.Phau(13 )statedthatalmostheavyequipmentisu s e d morewide-

rangingandoriginativethanlightequipment.Therefore,heavyusershave

knowledgeaboutstrengthsandweaknessesofproducts.Thesuppliersbegintocontactheavyu s e r s tocollectinformationasmuchaspossibletoimprovetheserviceandovercometheproblem.(14)

 Urgentshipmentscheduleofsparepartscostmorethanregularshipment

 Laborcostofworkingovertimewasdoublecostofnormalworking

Kobelcomadefreeinspectiontomachineafterdeliveryfirst50hoursofoperationwhileothercompetitorslikeKomatsu,Huyndai,Hitachiappliedserviceproactivelywithregularinspectionstocustomers(seeTable2).Itledtoafter-

salesserviceofKobelcolessprofessionalthanotherbrands.Mr.TrinhXuanThang–

SeniorServiceSectionsharedthat:

CustomersstronglycomplaintthatKobelcodidnotprovidemaintenanceserviceinperiodicallyatjobsitecom paredwithothercompetitorsKomatsu,HitachiandHuyndai.Isupposedthatunscheduledactivitiesofreactiv eafter-salesserviceimpact negativelyonafter-salesserviceofKobelco.

AccordingtoMr.NguyenThanhTuan-SalesManagerandNguyenTrongHieu-CustomerS u p p o r t Manager,customersstronglycomplaintaboutreactivepostsalesserviceofKobelcob e c a u se itnotonlyaccruedbigamountofrepairfeebutalsoaffectseriouslytotheirbusiness.TheywillhavebeenconsideredcarefullybeforeusingKobelco’sserviceorbuyingmachinei n thefuture.Tosumup,reactivepostsalesservicewasnotsuitableforusersandtherootc a u s e ofinappropriateservicetype.Fromthat,itledtomarketsharedeclineinrecentyears

3.2 Customercare

Customercareisdefinedasanactivitythatoffersinformationoftechnical,warrantyextensiona s statedbySaccani

(9)Customerservicehasmanytypesanddifferentdistributionsystem.Customerc a n a b s o r b t e c

h n i c a l i n f o r m a t i o n f r o m c o m p a n y t h r o u g h c e n t r a l i z a t i o n o f c a l l c e n t e r , c

o m p a n y w e b s i t e a n d l o c a l r e p a i r s t o r e K a n t s p e r g e r(18)foundthatt h e a c t i v i t y

o f customertransferredfromsimplicitytocomplexity.Atfirst,themissionofcustomerservicei s togiveinformationofserviceandprocessorders,butnowthetaskismorecomplexbyconsultingandmaintainingtherelationship.Kahn(19)concludesthatalmostenterprisespayattentionmoreoncustomersduetocustomers’view.Inordertoexistinfiercecompetitivemarketwhatproductsareconstantlybeingimproved with fastspeed,the companies havetoc h a n g e toadapt

InKobelco,customercareisundertakenbycustomersupportdepartment.Uponreceivin

gf e e d b a c k o f e q u i p m e n t ’ s s t a t u s fromc l i e n t s ,theyw i l l c l a s s i f y i n t o d i

f f e r e n t l e v e l s o f b r e a k d o w n togivethemostappropriatesolution.Forthoseslightlydamagedmachinery,theyw i l l adviseclientsonthespotsettlement.Conversely,asforbigtroubles,theseinformationw i l l berecordedandreverttothecustomersafterreceivingspecificdecisionsfromsenior

3.2.1 Informationprovision

Kobelcoprovidestechnicalinformationinwebsiteorofficialpaper.Customerscanchoosetypesofcontactsuchasphone,faxoremail.Mostofcases,customersgetincontactviaphonew h i c h i s a va i l a b l

e from7 amto4 3 0 pm,w h i l e i t t a ke s l o n g e r timefore m a i l f ee d b a c k C o m p an y didnotapplyanyspecialpolicyforurgentcaseswhatcustomersneedresponsesassoonaspossible.Mr.TrinhXuanThang-SeniorServiceSectioninformedthat:

ThereisnospecialpolicyforfastnessoffeedbackfromKobelco.Itdependsoneachspecificcase,forexample,S erviceSectionwillgiveprioritysupportforseriousproblemwhereasnormalproblemwillb e consideredtoso lve.

Informationprovisionstilllimitsduetonopurchasingonlinesystem.Ms.PhanThanhNha–

S e n i o r PartsSectionemphasizedthat:

Therewere98%

ofclientswhocomedirectlytoofficeandorderparts,only2%ofcustomerscalledf o r buying.Kobelcohadno tstillsetupsystemofpurchasingonline.Therefore,informationprovisionwaslimitedforcustomertoaccessan dcontactquickly.

3.2.2 Warrantyextension

Kobelcodidnotapplywarrantypolicyforsparepartswhathavelowlife-cycleforexampleo i l , filters,sprocket,tooth,sealkit,roller.ThewarrantytimewasonlyformainpartslikeE n g i n e , boom,motor,electric,sensor,solenoid,valve(seeTable3).ItcouldbeseenthatthetimeofwarrantyofothercompetitorslikeKomatsu,Hitachi,HuyndaiwaslongerthanthisofKo bel

co Slotegraaf(20)statedthattheconsumers areinterested intheirproduct’s warrant

yp er io d, theyf e e l s a t i s f i e d w i t h p r o d u c t q u a l i t y h e i g h t e n Inc o n t r a s

t , s a t i s f a c t i o n w i t h

Fieldt e c h n i c a l a s s i s t a n c e i s i n c l u d i n g maintenance,warranty,r e p a i r , p r o d u c t d i s p

o s a l a s s t a t e d bySaccani

(9)Aspeedygrowthofoutsourcingcreatedprofitforcompanytocompetei n themarket

(21)Itissuggestedthatoutsourcinghasbeenbecomemorepopularfrom1990’sa n d dependedonthefieldtechnicalassistance’sactivity

(22)Armisteadetal(23)suggestedthatt h e enterpriseswithbigamountofservicemostlyprefertotheoutsourcing.Russell(22)agreedthatbecausetherearetechnicalproblemsalwaysmaketroublestocustomers,theyneedhighl e v e l ofcorporationfromthesellers.Chien(24)demonstratedthatitaimstoprovideafter-

salesservicequicklytocustomerincasetheproductsbreakdowninthewarrantyperiod.Moreover,

thewarrantyplanshouldbepredictedaccuratelyinordertoofferwarrantyinlongtime.Am a

n u f a c t u r e r hasresponsibilitytoensurethefunctionofproductbyprovidingwarrantyasstatedbyBlischkeWRetal.(25)

3.3.1 Duringandafterwarrantyassistant

ThewarrantyperiodofKobelcomachineis12(twelve)monthsortwothousand(2,000)h o

u r s ofoperationwhichevercomesfirstfromthedateof deliverytothefirstuser.Thi

sw a r r a n t y timeisthesameasothercompetitorslikeKomatsu,Hitachi,Huyndaigenerally.Withinthewarrantyperiod,exceptsomelimitations,Kobelcowillrepairorreplaceatitso p t i o n , freeofcharge,F.O.B.KOBELCO’sfactoryorDistributoratKOBELCO’soption,a n y partorpartsofthewarrantedmachinewhicharefoundbyKOBELCOtobedetectiveinmaterialandworkmanship.AnypartsreplacedmustbereturnedtoKOBELCO’s

factoryinJapan,ThailandoritsauthorizedDistributor,transportationchargeprepaidbysender

3.3.2 Productdisposal

Thelifetimeofthemachineisaveragefrom10to15years.Theoldermodelhasthelongerlifetimecomparedtolatermodelalthoughnewermachineisappliedadvancedtechnologies.F o r example,Kobelcomark8wasinnovatedtolowerfuelconsumptionandmoreefficientperformanceagainstmark6.Asforusedmachinefrom1980sthatisoutofdate,harmfulwithe n v i r o n m e n t anddifficulttobuysparepartsincurrentmarket.Mr.NguyenThanhTuan–S a l e s Managersaidthat:

Kobelcoimportedusedmachinewiththequalityupto80%fromJapan,thenmachinewasrepairands o l d Ho wever,machineiswarrantedmaincomponentslikeengine,hydraulicsystemwith06monthso r 1 0 0 0 h o u r

s whicheverc o m e first.After0 6 months,Kobelcowillnotb e i n chargeo f productdisposalforcustomers.

Inaddition,thereweretwosourcesofsparepartsthatKobelcoimportedfromoversea.ThefirstoneisgenuinepartsinJapanesemanufacturer,thesecondoneisnotgenuinepartsnamelyK2GPwhatwereproducedinChina.Inrecentyears,inordertosavetransportationcostandt i m e, KobelcointensifiedtoimportmoreK2GPsparepartswhichaccountedfor20%in2009,thenitoverdoubledin2015(seeTable4).Themoresourcesofnotgenuinepartsincreased,t h e lifetimeofpartsdecreased.

Saccani(9)agreedthatdistributionofsparepartsisinchargeofinventory,orderanddeliverym a n a g

e m e n t Kennedyetal(26)confirmedthatsparepartswhichsoldtocustomer,arenotthef i n a l parts.Thefindingindicatedthecompaniesthatmeettheirclients’requirementsofpart-

s u p p l y ontime,cansharplyimprovecustomers’satisfactionininteractionandqualityofafter-s a l e s service.(27)Thedeliverytimeofsparepartsdependedoneachitemwhatwasavailableo nstockornot.Customerwillfeelsatisfiedifthesparepartscansupplyontimefortheirrequirement.Sothedistributionsystemismorestableandstabilize,thelevelofsatisfactioni s higher.Inaddition,inventorymanagementaimstoprovidesparepartstimelyforequipmentr e p a i r e d asstatedbyHopp

(28)Kennedy(26)concludedthatholdinginventoryassistsmaintenanceandtroubleshootingefficiently,becauseitisverydifficulttopredictthenumber

ofpartswhichshouldbereplacedinthefuture.Forunplannedmaintenance,itwillcostmoree x p e n s e incasedamagedpartsdonotreplaceassoonaspossible.

3.4.1 Inventorymanagement

Kobelcoh a s s e v e n p a r t s w a r e h o u s e s i n s e v e n o f f i c e s a t D o n g N a i p r o v

i n c e , B a c N i n h p r o v i n c e , LaoCaiprovince,DienBienprovince,NgheAnprovince,DaNangprovinceandG i a Laiprovince.WhileHitachiandHuydaistockpartsandmakeserviceinalmosteachprovinceofVietnaminordertoassistcustomersthoughtfully

3.4.2 Deliveryofsparesparts

Thedeliverytimeofsparepartsdependedoneachitemwhatisavailableonstockornot.Iftheitemsareavailableatwarehouse,itwouldtakeoneortwodaysfordelivery.However,inc a s e thesparepartsarenotavailableatstock,itneedstobeorderedfromforeignmanufactureri nJapan,MalaysiaorThailand.Asusual,ittookaroundtwoweeks–

fourweekstodeliversparepartstocustomersafterreceivingtheirorder.Therefore,customerswerenotpleasedw i t h thetimeofdeliverybecauseitmadetheirbusinessstagnant.Asaresult,deliverytimea f f e c t e d to buyingde cis io n o f c l i e n t s be caus e theywillbuysparep a r

t s fr om o t h e r firmsinsteadofKobelco

Reactive After – Sales Service Customer care

Corrective maintenance Information provision

Emergency maintenance Warranty extension

Market share decreases Inappropriate After - Sales Service type

During and after warranty assistance

a n d r a n k i n g p o s i t i o n d r o p p e d d o w n i n r e c e n t years.I n s h o r t t e r m i t a f f e c t s t o b u s

i n e s s a c t i v i t y a n d r e v e n u e o f company,b u t i n l o n g t e r m b r a n d imageo f K o b e l c oisg r a d u a l l y lost.B e c a u s e o ft he serious andemergency oft hi s factor, itrequiresBoardof

DirectorofKobelcoVietnamfocusonthemandfindthebestsoultiontoovercomeimmediately.Almostpeoplewhojoinindepthinterviewincludingcompany’sstaffsandcustomersaddresst h e keyfactor

e i s d e c i d e d bymanyelements.Customersweresatisfiedwithinformationprovisionandfieldtechnicalassistantw h i c h havehighpercentage80%and60%respectively.Sparepartsdistributionandwarrantyextensionaretwosignificancefactorswhethercustomersarenothappysomuchbuttheywillc o

n s i d e r u s i n g i n the future Onthe otherhand, theyextremelyunpleasedwithreactiveposts a l e s serviceofKobelco,forinstance,correctivemaintenanceandemergencymaintenancea r e highestpercentageofdissatisfaction65%and50%respectively(seeTable5)

 Forcustomersofcompetitors,theywillcontinuouslyusetheequipmentofrivalswithoutstudyingaboutKobelco’sproduct.

Inconclusion,reactivepostsalesserviceisunprofessionalservicebecausetheusersalwaysr e q u i

r e activetechnicalassistfortheirequipment.Customersupportdepartmentandrelativedepartmentswereindicated toimprove thissituation,but itisf a c i n g somefollowingd i f f i c u l t i e s :

 Firstly,thereareonly33technicalstaffswhilethenumberofmachinessoldtotally551u n i t

s from2009to2015.Itmeansthateachmechanicastakencare17unitsinaverage.T h u s thehumanresourceisnotenoughtoservewell

 Secondly,currentlythereissevenservicecentersestablishedacrossthecountry.Soeachc e n t e rmanagestheamountofunitsinnineprovinces.Itisrecognizedthattheservicec e n t e

r numberislessthanthedemandsofservicewhichareprovidedtousers

Toresolvethissituationandbemoreproactiveinprovidingservices,companiesconsidera p p r o a c h i n g somepotentialsolutionssuchasrecruitingmoretechnicalstaffs,establishingmoreservicecentersorapplyingGPStechnologytotracktheactivitiesofmachineefficiently

6 ALTERNATIVESOLUTIONS

Inordertosolvethebiggestfactorcausinginappropriateafter-salesservice,Kobelco’sBoardo fDirectorgavesomedirectionsandmissionstoalldepartments,especiallycustomersupportdepartmentinordertoexposethebestsolutionforreactiveafter-

salesservice.Inthiscase,p r o a c t i v e after–

sales serviceis consideredth e besttypeof ser vi ce forheavy equipmentc ur r e n t l y becauseitnotonlysupportscompanyoverwhelmthelimitationofreactiveafter-

salesservicebutalsobringsthehighestsatisfactiontoEnd-users

Becausetherearenotmanycustomerswhocanpredicttheproblemofmachineandaskforserviceino r d e r to avoiddisruptionmachine’soperation.Orcustomersaredifficulttorecognizethedefectofequipmentuntilthe problemhappens.Thus,proactiveafter-salesservicei s actuallybestwayt o supportcustomers.

Somestudiesandresearchesexaminedthatdoingserviceproactivelyisbetterthanservicer

e c o v e r y Berry(12)foundthatserviceproblemcanbeidentifiedbyproactivemethod.Otherf i n d i

n g indicatedthatproactivepostsalesservicecreatesgoodrelationshipwithcustomersthroughinitiativetaking,predictingrisk

(29)Minton(30)p r o p o s e dthatproactiveapproachesa r e toappliedtohandlewarrantyclaims,productproblem.Therefore,proactivepostsalesservicehelpssupplierinteractefficientlywithitscustomersanddealwithproblemeffectively.I n addition,itassistscustomersinrecognizingutilityfromproductswhichtheybought.Thusi t createshighpercentageofsupplier’sclientswhoisbeingsatisfiedwithafter-salesservice.T h e r e aretwopotentialsolutionsimplementedsuchasassemblingGPSsystemtomachinea n d establishingmoreservicecenters

KOBELCOMONITORINGEXCAVATORSYSTEM)

KOMEXSisbothawirelessequipmentmonitoringsystemandasecure,web-based,applicationusedforreviewingthedatawhichcollectsandsends.KOMEXSnotonlygivesyouthepowerofknowledge,butalsotheconvenienceofmanagingyourfleetontheWeb,w h e

r e v e r youare.KOMEXSdataispackagedspecificallyforeasy andintuitiveanalysisin

maps,l i s t s , g r a p h s a n d c h a r t s t h a t a r e r e a d y forv i e w i n g a t yourc o n v e n i e n c e I t w

i l l b e installedt o almostmachinemark8 —

andi t ’ s r e a d y t o r u n f r e e t h e f i r s t f i v e years( n o c o m m u n i c a t i o n servicefees).Thistechnologycanalsobeinstalledinalmostanythingusinga 12Vor24Velectricalsystemtocollectbasicoperatinginformation

KOMEXSusesanetworkoflowearth-orbitsatellitestorelaybasicandcriticalperformanced at a fromyourmachinetoyourcomputeraswellastoyourlocalKobelcodistributor—

who’sr e a d i l y availableforexpertanalysisandfeedback.Itcollectsdetailedinformationfromyourmachinesonadailybasisandthroughevent-

drivenoccurrences.Youarethenprovidedwithdaily,monthly,a n d a n n u a l r e p o r t s o n b o t h b a s i

c a n d morea d v a n c e d a s p e c t s o f machineperformance.Throughthewebapplication,avarietyofsearchparametersareavailabletoh e l p youq u i c k l y f i n d i n f o r m a t i o n a b o u t s

p e c i f i c machinesb a s e d o n keyf a c t o r s s u c h a s u t i l i z a t i o n rates,age,variousnotificationmessages,andmore.KOMEXSdatacanalsobep u l l e d intoyourexistingmanagementandofficeapplicationsordownloadeddirectlyintospreadsheetprogramsf o r furtheranalysis.K O M E X S d o e s n ’ t j u s t p r o v i d e i n f o r m a t i o n ; itp r o v i d e s answers

KOMEXSg i v e s yout h e p o w e r a n d k n o w l e d g e t o h e l p youmakef a c t

-b a s e d , -b a s i c a n d strategic-businessdecisionsregardingyourmachinesandtheiroperations.Th

ispaysoffinincreasedproductivityandavailability,proactivesupport,smartermanagement,andmuch