A continuous improvement approach for outsourced after-sales field repair services contracting

Manufacturers are forced to shift their traditional business focus from product offerings to integrated products and services to face the increasing competition in the market. Hence, they engage in service supply chains by hiring suppliers to efficiently provide services to their customers. Service supply chains are more complex and challenging than manufacturing supply chains and require more intense buyer-supplier collaboration; however, few studies addressed such collaboration and its implementation. Based on formal interactions with a multinational computer manufacturer who provides integrated products and services solutions to its customers in Europe; the Middle East; and Africa, it was found that the company’s goal is to improve after-sales field repair services contracting, with a particular focus on the Middle Eastern emerging markets which are growing fast. Research work in this thesis was carried out in three phases. The first phase aims at developing a contracting methodology for the outsourcing of field repair services. The second phase aims at exploring field repair service practices in the Middle Eastern emerging markets using a multi case study which showed both cultural and economic differences but little operational difference between both established and emerging markets. Due to little operational differences, data from an established market was used in the third phase to test the developed contracting methodology. This methodology extends the traditional supplier selection by adding an application feedback stage at the concluding stages of the selection process including a continuous improvement element that supports strategic and performance-based contracting and enables improving the current, not the subsequent, contracting process. A framework is proposed to allow for a buyer-supplier collaborative negotiations including an execution approach for the implementation of continuous improvement over the contract lifecycle with agreement on benefits sharing. Business process modelling and simulation is used to model the service provision and simulate the predicted improvements as it offers a quick, easy to use, and understandable approach for all users. Framework testing using case company data has shown to provide significant improvements in terms of ongoing cost reductions and improved service quality. The combined use of business process modelling and simulation has shown to be a practical and effective decision support tool that allows for rapid evaluation of improvements at the pre-signing stage of the contract.