Rolls Royce Power by Hour
Rolls Royce – Power By the Hour
Project Report Prepared by PHANESH V. R. ATMURI
Rolls Royce – Power By the Hour
1
Executive Summary
Today most Multi National Companies that are operating globally are realizing that they have to take complete control of After-Sales-Service, in order to compete effectively and synergize their operations with profitability. Earlier days, much of the service operations were handled by third parties. Companies have identified that after-salesservice is a significant source of revenue for the organization. With this paradigm shift and change in the culture, Rolls Royce pioneered and conceptualized ‘Power by the Hour’, an after-sales-service program that helps focus customer in their core business activities & offers peace of mind. In order to achieve this, Rolls Royce had to restructure and revamp its various operations including vertical integration of various divisions. The after-sales services provided by Roll-Royce helped its customers reduce maintenance costs and downtime. The service also enabled the company to improve its aero engine designs and build good relationships with customers. Moreover, the company gained a steady long-term revenue stream from the maintenance contracts. Analysts felt that the service strategy adopted by the company strengthened its position considerably in the highly volatile aerospace industry.
Date 29-07-2011
Rolls Royce – Power By the Hour
2
Contents
....................... 1 Executive Summary ........................................................ 1 Contents ......................................................................... 2 1. Introduction ............................................................. 3 2. Rolls Royce Background ............................................. 5 3. Power By the Hour – Service Conceptualization ...... 6 4. Process Choices ........................................................ 7 5. Performance Metrics. ..............................................
Project Report Prepared by PHANESH V. R. ATMURI
Rolls Royce – Power By the Hour
1
Executive Summary
Today most Multi National Companies that are operating globally are realizing that they have to take complete control of After-Sales-Service, in order to compete effectively and synergize their operations with profitability. Earlier days, much of the service operations were handled by third parties. Companies have identified that after-salesservice is a significant source of revenue for the organization. With this paradigm shift and change in the culture, Rolls Royce pioneered and conceptualized ‘Power by the Hour’, an after-sales-service program that helps focus customer in their core business activities & offers peace of mind. In order to achieve this, Rolls Royce had to restructure and revamp its various operations including vertical integration of various divisions. The after-sales services provided by Roll-Royce helped its customers reduce maintenance costs and downtime. The service also enabled the company to improve its aero engine designs and build good relationships with customers. Moreover, the company gained a steady long-term revenue stream from the maintenance contracts. Analysts felt that the service strategy adopted by the company strengthened its position considerably in the highly volatile aerospace industry.
Date 29-07-2011
Rolls Royce – Power By the Hour
2
Contents
....................... 1 Executive Summary ........................................................ 1 Contents ......................................................................... 2 1. Introduction ............................................................. 3 2. Rolls Royce Background ............................................. 5 3. Power By the Hour – Service Conceptualization ...... 6 4. Process Choices ........................................................ 7 5. Performance Metrics. ..............................................
References: 1. www.rolls-royce.com and its Annual Report 2. Rolls-Royce: A Manufacturer at Your Service. IBS Center for Management Research 3. Aftersales = after profit by Ruari McCallion, as published in the April 2007 issue of ‘The Manufacturer’ publication 4. 'Power by the Hour ': Can Paying Only for Performance Redefine How Products Are Sold and Serviced? Published: February 21, 2007 in Knowledge@Wharton 5. Performance Contracting in After-Sales Service Supply Chains by Sang-Hyun Kim, Morris A. Cohen, and Serguei Netessine, The Wharton School, University of Pennsylvania Philadelphia, PA 19104 January 2006, Revised August 2006. 6. Informing Preliminary Design by incorporating Service Knowledge – by Sylvia C Wong, Richard M Crowder, Gary B Wills and Nigel R Shadbolt, - Paper presented during International Conference on Engineering Design 2007 Date 29-07-2011 Rolls Royce – Power By the Hour 20 Date 29-07-2011