Feb 10 2004 Meeting

Feb 10 2004 Meeting

International Support Issues

Notes from the Boston AFSM Minuteman and Boston ASP Chapter Meeting

Peter Bolers, Director of Service Marketing, Waters Corporation

Al DaSilva, GSI Lumonics

February 10, 2004

Notes written by:

Andy Wojcikowski

Fred Van Bennekom

The AFSM Minuteman and Boston ASP Chapters held their monthly meeting on Feb. 10th focusing on the topic “International Support Issues”. The topic proved very popular based on the over 70 people who registered for the meeting.

We were fortunate to have two excellent presenters and judging by the lively Q/A session, the topic clearly resonated with the audience. The first speaker was Peter Boler, Director of Service Marketing for Waters Corporation, a nearly $1 billion company aimed at selling products and services into the Life Sciences and heavy Industrial markets. Their lines of business include Thermoanalysis, Mass Spectrometry, Informatics and Service/Support. In essence, as Peter suggested, they are in the business of “the science of separation” and the “science of identification” with nearly 70% of their business in the Life Science market. This highly diverse high technology product line creates support challenges since the product lines each has unique support requirements.

Waters business is worldwide. Only 39% of its revenue is from the US. 29% is from Europe, and Asia represents 22% of sales. The international nature of their business simply exacerbates the support challenge from diverse products. Peter explained the Waters support model is highly decentralized with five geographies each with a different structure. Services are managed at the geography/country level, including both traditional support centers and field-based engineers. Europe for example has 14 call centers. The Waters international model uses a “follow the sun” approach but interestingly is not purely a 24x7 operation.

Peter explained that the international challenge requires a critical balance between satisfying customer loyalty and optimizing field efficiency - all the while maintaining solid business growth. This requires a constant training of specialized field engineers particularly in the Far East. Support for these products demands more of a premium on understanding the industry (e.g. as a chemist) than having pure product engineering skills (e.g. as an EE). Peter stated that human resources issues are: defining the right profile for support engineers, attracting these talented engineers, and keeping them.

One of the primary international challenges for Waters is communication within the company. Peter indicated they had to rationalize and standardize local service offerings under one overall “portfolio” (an approach used by several other companies) in order to provide better service management. Even so, there is still considerable local discretion. Waters corporate would like services managed as a business, but the local geographies often see service as a cost center, something to give away to make the product sale. Adding to this local discretion problem is the fact that many of Waters customers are multi-national and expect the same service regardless of the location of the product being supported. Waters has also acquired many companies lately. Integrating their support operations into Waters support structure international is an ongoing issue.

In the future Waters is looking to develop more intelligent devices from a support perspective, which will allow for more centralization of support operations.

The second speaker was Al Da Silva, VP of Services for GSI Lumonics, a maker of products and services in the laser market focused in particular at the Semiconductor industry. Samsung is one of their largest customers. Al indicated that international challenges for his company were also correlated with recent very significant downsizing at GSI/Lumonics.

Al pointed to three specific international issues for his company:

Language. This is a significant issue. Al indicated his overall international support issue is one of having “….incomplete information leading to less than adequate support….” Language problems play out first in getting the correct information at the outset of a service call, and second in communicating during an escalation process since the engineers who handle escalations typically speak English only.

Europe, being multilingual, does not pose significant support problems. The Far East presents far more issues to the point that ability to speak English is a critical component of the hiring process. Japan is particularly troublesome from a communication standpoint, followed by Korea, other SE Asian countries and Taiwan. Hiring technical people is easy. Hiring technical people with English skills is the challenge. Having English lessons for techs has been the approach taken.

Time Zone. GSI/Lumonics also uses a “follow the sun” support model. The time zone issues include access to highly trained support personnel and access to spare parts. Their goal is to have a local resolution to a service issue. To help achieve this, techs receive significant training back at the factory.

The vast customer geography and cost of spare parts makes stocking spare parts for quick access a true challenge. Exacerbating the problem is that many international customers particularly in Asia tend to want billable Time & Material relationships with GSI, a point that Peter concurred. The predictability from service contracts becomes particularly important in the international sphere. However, contract penetration is difficult in Asia. To discourage T&M support and encourage service contracts, parts and labor are charged with significant uplifts.

Culture. Al pointed out that many of the Far East countries assume that if you say something, you will deliver. Your word is golden. If you fail to deliver when/what you said, you will lose their trust. In some countries, support is expected as part of the cost of doing business and is assumed to be “free”. Such expectations routed in culture are hard to reset.

Al also discussed the channel model for selling (and supporting). While direct sales and support is common in many geographies, they do sell through the channel. Service delivered through the channel means less control over the technical skills of the support engineers. Such a situation demands very solid operational processes, especially regarding escalation procedures. Certification is one means to address the lack of control over engineer capabilities.

Al and Peter answered several other related questions including the structural aspects of international support (centralized vs. decentralized), the differences in hardware (capital intensive) and software support models, pricing and cultural expectations. All in all, it was an instructive session and revealed the complexities of delivering support on an international basis.