Overview
This case study outlines the transformation of a Brisbane-based workshop, part of a global medical device company, from an inefficient and cost-heavy operation into one of the best-performing service centres in the organisation. Faced with significant challenges, including long backlogs, poor parts supply, and internal friction, the workshop underwent a comprehensive overhaul that improved efficiency, customer satisfaction, and profitability.
The Challenge
The Brisbane workshop was tasked with servicing medical devices for customers across Australia and New Zealand. Devices, including handheld and portable systems, were sent to the workshop for deeper repairs after being evaluated by customers’ first-line support teams. The customers varied from government hospitals and private clinics to third-party service providers.
Despite its crucial role, the workshop struggled under the following conditions:
- Cost-Based Service Model: Services were mostly free, with customers only charged for parts. Labour and logistics were provided at no cost, creating financial strain.
- Parts Supply Issues: Parts were often unavailable, either due to global hoarding or slow processes. Australia’s geographic isolation made things worse, causing long delays and frustration.
- Skills and Workflow Gaps: Technicians had limited formal training, and repairs followed outdated processes. The workshop itself was disorganised, leading to frequent errors and lost devices.
- Poor Communication: Customers had to repeatedly follow up on repair status, while internal communication between service and sales was strained. The sales team blamed service for lost opportunities due to delays.
- Reliance on Manufacturer Returns: Complex repairs often required returning devices to the manufacturer, which led to long turnaround times and, in some cases, devices getting lost.
The result was a backlog that stretched from six months to a year, unsatisfied customers, and rising tensions between the sales and service departments.
The Solution
Faced with these challenges, I initiated a strategic overhaul. The goal was to address inefficiencies, improve internal collaboration, and shift the service model from a cost-heavy operation to a cost-neutral, and eventually profit-based, structure.
- Transition to Cost-Neutral Service: The first step was introducing labour charges for non-warranty work and standardising parts pricing with global supply chain support. This reduced the burden of free services and paved the way for future profitability through service agreements.
- Fixing the Parts Supply Chain: A new global project separated the production of spare parts from instruments, improving availability. Workshops globally introduced a min-max inventory system, which ensured better parts availability without overstocking. This reduced the need for costly express shipping and significantly sped up repairs.
- Improving Technical Skills and Workflow: Technicians underwent weekly training to improve both technical and soft skills, creating a more capable team. The workshop layout was redesigned to streamline workflow, with clearly defined areas for receiving, inspecting, repairing, and storing devices. Tools and specialised equipment were also upgraded, reducing errors and improving efficiency.
- Upgrading the Service Management System (SMS): The outdated, locally developed SMS was replaced with a new system that allowed real-time tracking of parts, devices, and customer communications. This provided technicians and managers with full visibility of all ongoing repairs, significantly reducing the risk of lost items or communication breakdowns.
- Proactive Customer Communication: A service administrator was hired to manage all customer interactions. Instead of waiting for customers to ask for updates, the administrator provided regular, proactive updates. A clear process for handling quotes was introduced, with devices returned if quotes were not approved within a set time. This reduced unnecessary delays and helped manage customer expectations.
- Building Global Connections and Reducing Manufacturer Reliance: I also worked to increase the workshop’s visibility within the global organisation, ensuring better support and collaboration. The workshop also gained approvals to handle more complex repairs locally, including warranties and restricted repairs, reducing the need to return devices to the manufacturer and improving turnaround times.
Results
Within the first year, the workshop experienced significant improvements:
- Backlog Reduction: The backlog was reduced by 60%, thanks to better parts availability, streamlined workflows, and clearer communication channels. Overtime work was offered voluntarily, further speeding up repairs.
- Cost Control: Initial costs were offset through better cost management, including more efficient shipping and parts allocation. By the end of Year 1, the workshop was nearly cost-neutral, with logistics costs reduced by two-thirds by end of year 2.
- Customer Satisfaction: Customer complaints dropped significantly due to faster repairs and proactive communication. Service-based revenue models, such as preventative maintenance agreements and device refurbishment, provided customers with more reliable service options.
- Employee Morale: While some employees resisted the changes and chose to leave, the remaining team and new hires embraced the new processes. Training and improved working conditions led to a more motivated workforce.
- Compliance and Audits: The workshop consistently passed audits for the first time, reducing the need for costly follow-ups and improving overall compliance.
Long-Term Impact
By the end of Year 2, the backlog had all but disappeared, and the workshop was able to offer same-day inspections. The new efficiency allowed the team to move beyond cost-neutrality and generate profit through service offerings such as refurbishments and SLAs.
Inventory management also improved drastically, with service-related stock losses reduced to zero. As customer satisfaction climbed, the workshop expanded its service coverage into Southeast Asia, establishing a service office in Singapore to meet growing demand.
By Year 3, the Brisbane workshop had become the top-performing service centre globally. Its streamlined operations and skilled team enabled it to handle overflow warranty work from other regions, and every device in its install base was covered by service level agreements.
The workshop’s success attracted attention from across the industry, with several team members being sought after for senior roles in other organisations. The Brisbane team had evolved from an inefficient cost centre into a thriving, profit-driven operation, playing a key role in the company’s global service strategy.
Conclusion
The Brisbane workshop’s transformation from a struggling, backlogged service centre to a top-performing global leader illustrates the power of targeted change management. Through investments in skills, technology, and communication, the workshop addressed deep-rooted inefficiencies, improved customer satisfaction, and built a sustainable, profit-generating service model. This case study highlights the importance of a comprehensive approach to solving operational challenges, where strategic change can lead to lasting success.
If you would like to discuss how to transform your service business, contact Creekline Consulting.