Leading Companies Drive Revenues, Profits, and Customer Loyalty By automating Service Parts Management; Servigistics Providing Industry's Leading Service Parts Management Solution

ATLANTA--Oct. 2, 20031, 2003--Companies employing Service Parts Management (SPM) solutions such as the Servigistics SPM solution can turn service parts into a competitive advantage that positively impacts both the top and the bottom lines, according to a recent study from research firm, Aberdeen Group.

In a recent report entitled: "Service Parts Management: Unlocking the Value and Profits in the Service Chain," Aberdeen highlighted the strategic importance of post-sale service and notes, "Aftermarket parts and services have profit margins as much as 10 times those of the initial product sale - service parts management is the linchpin of any effective service operation."

Globalization, cost pressures, and empowered customers are forcing businesses to distinguish themselves on not only product uniqueness, but on the quality and effectiveness of the service delivered after the initial sale of the product. Increasingly, more revenue, profits, and customer loyalty are being driven by after-sale service than by the actual sale of the product. Such factors present a significant opportunity for durable goods manufacturers, service parts suppliers and distributors, and maintenance service operators to rapidly improve company profitability.

The study revealed several clear advantages to using best-of-breed service parts management solutions, including the following:

-- Reduce Inventory Levels -- Companies that used discrete service parts management systems reported an average of a 22% reduction in inventory levels.

-- Increased Inventory Turns -- Service parts management application users reported 42% higher inventory turn rates than companies not using such systems. Specifically, users of discrete service parts management systems reported an average of 7.9 parts inventory turns per year, versus just 5.6 turns for non-users.

-- Improved Fill Rates -- First-time fill rates for users of service parts planning and management applications topped 92%, on average, compared with an 82% fill rate for non-users.

-- Reduced Stock-outs -- Users of service parts planning and management applications experienced 16% fewer stock-outs, on average, than non-users.

Although an increasing number of global, leading companies recognize and are using Service Parts Management as a strategic profit driver and source of competitive differentiation, many continue to under invest in this area. These companies are managing hundreds of million of dollars of service parts with "stop gap" approaches such as spreadsheets, homegrown systems and customized Enterprise Resource Management (ERP) and Supply Chain Management (SCM) systems. Increasingly, these approaches prove to be highly ineffective and expensive when implemented as solutions to the challenges related to global service parts management.

A major finding from the Aberdeen study is that attempts to automate service parts management operations have largely been ad hoc and disconnected, resulting in pockets of automation across the service lifecycle and insufficient ability to integrate and align service information and procedures. "The Aberdeen study accurately highlights how leading companies are increasingly using service parts management to drive customer loyalty and profitability," said Eric Hinkle, CEO for Servigistics. "But more importantly, the report highlights that despite the obvious benefits, most companies are under investing and handing a huge advantage to their competitors by failing to capitalize on the financial and operational benefits of service parts automation."

The conclusion of the report, Aberdeen notes, "By investing in improving service parts management while others are ignoring it, enterprises can drive customer loyalty, profitability, and competitive advantage."

A copy of the Aberdeen report: "Service Parts Management: Unlocking the Value and Profits in the Service Chain," is available from Servigistics at http://servigistics.com/whitepaper3.htm.

About Servigistics

Servigistics is the preferred provider of global service parts management solutions, and enables companies to dramatically reduce cost, increase profitability, and drive customer loyalty to new levels. Servigistics solutions have been deployed and proven globally by such leading companies as Agfa, Avaya, Axcelis, Credence, Cray, Dell, EMC, IKON Office Solutions, Infocus, Patterson Dental, Subaru, Toshiba Medical Systems, UPS, and others. Servigistics clients are 100% referenceable. Servigistics is a privately held company headquartered in Atlanta with offices in London and throughout the United States. Contact Servigistics at 888-942-8623 or 770-565-2340, via e-mail at info@servigistics.com or at www.servigistics.com.