These and other similar questions are being pondered by service executives who want to grow revenue as opposed to watching it decline. With the exception of very specialized offerings, the stand alone repair company is finding itself at a defining moment in time.

Most repair companies produce their revenue within the Reverse Logistics link of the supply chain, although there are no known repair companies that can bring a total solution to the market in the reverse logistics supply chain without partnering.  The emergence of Third Party Logistics Providers are filling some of the gaps and becoming strong partners for the right repair companies.

The large manufacturers are changing the rules of engagement for post-sales hardware service support with longer warranties, extended warranties and "the fully warranted box." The stand alone repair company must shift their paradigm or be faced with shrinking revenues and razor thin margins.

Domestic Manufacturers have been frustrated with trying to collect on warranties from Pacific Rim suppliers and manufacturers. Some have resorted to negotiating lower box prices and only getting protection for epidemic field failures, while others have pushed back on the manufacturer to provide a "fully warranted box." There can be several different flavors of the "fully warranted box" but they all have a common theme. The responsibility for defects in material, workmanship, DOAs and failures during the warranty period clearly resides with the box manufacturer.

North American capability is generally lacking for a number of these box manufacturers. No one wants to send their product or part across the pond for repair. The pipelines are too long and the cost of inventory to support them is prohibitive for most companies. This creates an opportunity for those TPMs who can establish the relationships with the offshore box manufacturers that do not have a North American capability in reverse logistics.

Domestic Manufacturers are making the combination of warranty and extended warranty more and more attractive to the ultimate purchaser. Not only are they providing something of value to the end user, they are producing a profitable revenue stream while contacting out the service on a transaction basis to the TPMs who are struggling to make a profit on labor only transaction business. The TPMs are finding it more and more difficult to win business on a contract basis.