Medical equipment and service companies operate in highly competitive markets where factors like effective spare parts management and field service automation (FSA) can have a significant influence on costs and contract pricing as well as overall customer satisfaction. In addition, tracking parts for work orders and repairs can have a direct impact on first time fix rates.
The medical device industry is expected to reach approximately $426.2 billion by 2025, with a CAGR of 3-5% through 2025, noted by Lucintel1. With this rapid increase, the companies in the industry will be challenged to stay up to speed with a competitive stance in providing the best service to their customers in a cost-effective manner. Along with this projected growth, the COVID-19 pandemic has drastically increased demand on most medical resources. Now more than ever, medical device companies need ways to stand out from the crowd by providing exceptional customer service while increasing their first-time fix rates and tracking their growing costs. With a higher first-time fix rate, you will decrease costs because you won’t have to constantly send a technician back and forth from a warehouse to a vendor to a customer’s site to get a job done. Simply put, with accurate parts tracking, you can expect your service team to have the right products the first time to be more responsive and effective, which allows you to build customer loyalty and expand service capacity.
Spare Parts Management and First Time Fix rates
Your ability to fix problems on a single visit can help increase your customer’s confidence in your team’s effectiveness and prioritization. Eliminating the need for them to consider the competition for their service needs. According to a survey from Aberdeen Group2, businesses with a first-time fix rate of 70% will have customer retention of 86%, while businesses with a first-time fix rate of less than 70% will see customer retention dropped to 76%. In addition, according to Aberdeen, parts unavailability is the biggest reason (29%) why a first-time fix might not occur.
A cloud based field service management solution gives you the visibility and control to track parts throughout your service operation to ensure they are available where and when needed. By having customer service reps in the same system as dispatchers and technicians, your team will have better communication of repairs needed and much less information lost in translation. With accurate parts inventory and location available to dispatchers, work orders can be categorized properly, and parts automatically associated and available to technicians on-site to make the repairs. When a technician is onsite and needs an additional part to complete a repair, they can access the system through a mobile device and view accurate levels of inventory, without having to return to a warehouse physically and search for the part. Overall, knowing the products needed before a job and whether they are in stock will empower the technician, knowing he/she is not going on-site empty handed. Medical equipment FSA will ultimately increase your first-time fix rate, maximize the technician’s time and decrease downtime of the customer’s equipment.
True Cost of Parts
Spare parts management is a critical function of field service operations. Holding parts can be expensive. It’s estimated that the average carrying cost for inventory can be upwards of 26% of the value of the part. This cost must be balanced against the cost of not having a part available when it is needed for a repair in the field. This is complicated by the fact that medical equipment companies typically do not have a great way for technicians to record transactions with vendors when on a job. For example, imagine a case where a technician is forced to a part to use on a work order and they forget to tell their manager until they record it on an expense report a week later. If the company has already invoiced the customer for the job, it will require a difficult conversation with the customer to change the invoice and will likely be remembered during contract renewal negotiations. Technicians who track their purchases in the field and record them on work orders as they occur allow for accurate and timely price, cost, and inventory tracking with accurate invoicing. In addition to ensuring invoicing is accurate, the solution allows managers to see trends in common products being bought in the field. Visibility into parts purchase patterns allows purchasing to optimize inventory levels based on demand. Data on parts ordered in the field by type of work order can be used to automatically add the part to any future work orders of the same type, increasing the first-time fix rate.
Returns in the medical equipment industry are challenging to track as well. If a customer returns a broken part to be repaired or replaced, they expect fast, exceptional service. While the first-time fix rate is one of the most important aspects of increasing customer satisfaction, ensuring customers receive on-time returns and repairs can be just as important. Returns tracking allows you to rate vendor service and timeliness in providing credits. This information can be valuable when making future vendor selections.
Proven Medical Equipment FSA
A cloud-based field service solution like Microsoft Dynamics 365 Field Service enables service organizations to increase the effectiveness of their parts tracking, product inventory management and returns processing. Having greater visibility into this information allows service firms to increase technician productivity, improve first time fix rates and ultimately increase customer satisfaction.