Good service forms basis for tomorrow’s business
Alfa Laval’s focus is on continuing to develop sales of spare parts and service and to offer solutions that can increase capacity of customers’ existing installations. All of these areas fall under Parts & Service, which generates added value for customers, ensures closer contacts with customers, has favorable profitability and is less vulnerable to economic trends. During periods of economic stagnation – when companies sometimes hold off on making major investments, while at the same time requiring their processes to function efficiently – this segment’s offerings become even more interesting.
Good service contributes to new sales
The employees at Parts & Service are important representatives for Alfa Laval. No other segment is as close to customers, with such frequent contact and has such a decisive impact on continued confidence in the company and its products. Good service with a large knowledge base, quick deliveries of spare parts and a deep understanding of customer processes contribute to securing Alfa Laval’s positions, which help in securing new sales.
For a company such as Alfa Laval, with sales around the globe, it is essential to have an extensive organization that can handle maintenance and service of the continually expanding installed base. Many of the company’s products are found in customer processes where they perform key and, in many cases, critical tasks. In most cases, the customer’s processes rely on the products functioning continuously. Rapid service of the products and delivery of spare parts is consequently of the greatest importance.
Extensive expertise, foundation for strong service offerings
Alfa Laval offers a wide range of service contracts that are ranked from 1 (base) to 4 (performance), depending on their scope. The four levels include everything from simple framework agreements for spare parts to more comprehensive offerings with a high service content.
Employees within the service organization should be able to handle all of Alfa Laval’s products, within all types of industries, placing extensive requirements on their skills. In order to live up to the commitment to “optimize performance of our customers’ processes – time and time again” it is essential to provide ongoing training initiatives aimed at service technicians and field sales representatives. Being able to provide assistance in a critical situation, and to do it well, is one of the factors that determines whether a customer comes back.
Ongoing projects
For Parts & Service, it is important to have a good overview of the installed base to be able to plan operations. In response to recent years’ significant sales increases of products and solutions to energy-related sectors, the organization has worked more intensely to follow up and evaluate the size and composition of the installed base, to best ensure that offerings meet demand. Other projects that impacted work during the year included the launch of new products, build-out of the service network and development of spare parts supply.
Product launches
The focus on developing new products and services is something that embodies all of Alfa Laval. All segments cooperate and new products are launched on an ongoing basis. For Parts & Service, this means that specific products are developed that can be included in offerings aimed at customers who need maintenance or to upgrade their existing equipment. This also means that new service products are developed in conjunction with product launches in other segments.
Service network
During 2008, the service network was expanded to ensure proximity to customers. A decision was made to open eight new centers in the US, Russia, Turkey, China (2), Japan, Australia and Saudi Arabia. Four of these were opened during the year, with the others expected to start up during the first part of 2009. In addition, operations were expanded at four existing service centers and six others were relocated.
The service center in Houston, Texas (US) was expanded due to Alfa Laval’s extensive sales of welded heat exchangers to the oil, gas, petrochemical and refining industries in the US.
A service center was opened in Des Moines, Iowa (US) to serve the large, installed base of products that exist among American ethanol producers.
The service center that has opened in Istanbul (Turkey) will be able to handle the environmental solutions that have, to a growing degree, been installed in recent years.
Accessibility
During 2008, resources were also aimed at improving accessibility and delivery reliability. The goal is to be able to meet the needs of customers in every single instance. This is a challenge, not only considering how large the installed base is, but also because some customers have Alfa Laval products that are still in operation after 30 years or more. Even those products shall be offered service and spare parts to the greatest extent possible.
Alfa Laval has three main distribution centers: in Tumba and Lund (Sweden) and Kolding (Denmark). There are also regional distribution centers localized in Indianapolis (US), Singapore (Singapore), Shanghai (China) and Shonan (Japan).
Future potential
The foundation of the Parts & Service operation is linked to the installed base, which has expanded significantly in recent years, in terms of size and geographic spread. This means that the average age of products varies depending on where in the world the product is installed. Generally speaking, products are older in Western Europe and the US and newer in Central and Eastern Europe, Latin America and Asia. As the installed base ages in the fast-growing nations, demand for spare parts and service will also increase.
Development during 2008
  • The order intake rose by 8* (17) percent, accounting for 23
    (21) percent of the Group’s total sales during the year.
  • The segment’s development was especially good regarding applications in Energy & Environment in North America and Asia. Demand for Alfa Laval’s applications and solutions was good in the marine market, due to the larger number of vessels with Alfa Laval equipment onboard.
  • During the year, new service centers were added to expand
    Alfa Laval’s global coverage and to achieve proximity with customers. Increased efforts were also made to offer upgrade solutions to help customers boost capacity on previously installed equipment.
* at fixed rates
Geographic potential
The installed products create growth potential for the aftermarket. Today, the aftermarket is largest in Western Europe and the US, where the installed base is older. At the same time, this means that the potential in emerging markets is rising in pace with the increase in new sales and the aging of the installed base.