60% of Profits from Spares and Repairs

Abstract

Kirk and Fred discuss the situation when an organization has a business model that actively minimizes reliability.

Key Points

Join Kirk and Fred as they discuss the odd business model that discourages creating a reliable product. A conflict exists if there is little to no profit during the design of a product, and significant revenue and profit in the maintenance and repair of the same units. What actions can and should you take to balance the business requirements with achieving reliability performance objectives?

Topics include:

• Many companies rely on aftermarket (spares) for profit
• Poor reliability can be profitable in the short term
• Market challenges when products are “too reliable”

Enjoy an episode of Speaking of Reliability. Where you can join friends as they discuss reliability topics. Join us as we discuss topics ranging from design for reliability techniques, to field data analysis approaches.

Kirk and Fred discuss a company business motivations in determining the need for reliability testing and improvement. Many companies rely on the profits from spare parts and service and a reliable product impacts the total programs profit. In these cases, spending time and money to make a reliable product is a tougher sell.

In the competitive world of consumer electronics, technological innovation is the reason most will want a new model of product type, and is the most effective way to keep customers returning

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SOR 114 60% of Profits from Spares and RepairsKirk Gray

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Show Notes

Here is the link to Kirk’s blog “There is a Drain in the Bathtub Curve”

Here is a link to Kirk and John’s new book “Next Generation HALT and HASS: Robust design of Electronics and Systems”