Outsourcing of logistics, including warehousing, repairs and engineering components, is enabling Sun Microsystems globally to lower the total cost of ownership of its systems, benefiting both Sun`s channel partners and the end user. Locally, this model has contributed to Sun Microsystems RSA showing record revenues and growing its market share significantly since becoming a full Sun subsidiary in March last year.
Computer hardware alone does not necessarily provide a competitive advantage and manufacturers now have to differentiate on service and support, rather than hardware architecture. Providing top level support, however, can be costly. Sun Microsystems has overcome this by adopting a worldwide services and logistics partnership model, based on Sun`s `Trilogy concept`.
"Sun uses partners extensively to provide support and service, but we take the partnership model further than most by outsourcing logistics as well," says James Steele of Sun Microsystems Southern Africa. "This results in top class support, coupled with a lower total cost of ownership on Sun products.
"We are placing more and more emphasis on support worldwide, as competitive advantage today is firmly in this area," he says. "Today people don`t just buy computers because of brand loyalty, so we are ensuring that they choose our products because of our support. And this is working, as more and more companies choose Sun systems for their mission-critical applications."
As part of this worldwide initiative to provide top level support, Sun uses partners to handle logistics. Steele explains: "For many computer manufacturers, logistics represents a massive overhead and capital investment. It involves large numbers of in-house support staff and expensive infrastructure. This investment obviously translates into higher support costs for the customer.
Sun outsources its logistics function, which includes warehousing, the repair facility and the engineering components, to its Logistics Partner, Spicer Specialised Services, formerly known as Technicare.
"Spicer Specialised Services handles the management of spare parts; the movement of materials, including shipping and storage; and repairs, which allows us to focus on our core competencies" he says.
This partnership forms part of Sun`s larger partnership model, encompassing marketing, sales, support and service. "We work with a core of highly competent partners whom we spend a lot of time training to ensure that they are best of breed," says Steele.
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