Manufacturers Overlook Profit Potential Of Service and Parts

Deloitte survey shows that services 75% more profitable than overall manufacturing

Following is an abridged press release. For the full press release, please visit: http://www.deloitte.com/us/serviceandpartssurvey

CHICAGO, Feb. 21 -- Long viewed as little more than a cost of doing business, aftermarket parts and services, are in fact an overlooked source of profits for many manufacturers.

In manufacturing companies around the world, service businesses now account for a significant 46 percent of profits, according to the preliminary findings of a Global Benchmark Study on Service and Parts Management by Deloitte Touche Tohmatsu ("Deloitte"). Even more significant, the average profitability of service operations is 75 percent higher than the overall manufacturing operations, the Deloitte research shows.

The service operations reviewed by Deloitte include aftermarket sales of parts and accessories and field services such as repairs and maintenance. For many companies surveyed, profits would be significantly lower without the service business.

"It is evident that companies should no longer treat the service business as an afterthought," says Jeff Glueck, Principal with Deloitte Consulting LLP. "Instead, it should be managed effectively as a growth business and integrated into the manufacturer's core business strategy."

For the full press release, visit http://www.deloitte.com/us/serviceandpartssurvey

About Deloitte Touche Tohmatsu

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of 120,000 people worldwide, Deloitte delivers services in four professional areas-audit, tax, consulting and financial advisory services-and serves more than one-half of the world's largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas.

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