Since 1953, ERLO Group has based its activity on the production of industrial drills and threaders as well as high productivity automatic drilling and threading systems. ERLO Group has always seek to optimize the investment of its customers by firmly betting on a premium product of high durability and reliability, developing products with a service life of more than 40 years. This means that, although the initial purchase investment is higher than the one for an imported drilling press, the life cycle cost is ultimately much lower considering that 7 or 8 low-end drills are needed for the same time period.
ERLO Group accompanies the customer throughout the life cycle, providing spare parts sales services, as well as when necessary, through ERLO SERVICE.
The company aligns with the current tendency among manufacturing companies to base their business more and more on services in order to gain in competitiveness across markets, which are more often than not secondary sources of income.
Notwithstanding, and particularly in times of crisis, sales originated from services tend to be stabilized, as is happening during this crisis situation caused by the COVID-19.
The Basque industrial network is mostly made up of equipment manufacturing companies that in most cases do not perceive any income, or insignificant amounts through the service business units compared to the bulk of their main business. Currently, it is unthinkable to conceive an industrial business without being supported in an efficient and high-quality service. Consequently, the difference lies in the fact that some entities charge for it and others not, being this a commercial tool and not a business unit per se.
With the current health crisis situation, as the article by Bart Kamp shows, published on 24 March 2020, the scope to be achieved after the monetization of these services is particularly relevant in a context where companies postpone their purchases of equipment. In addition, the service business is a recurring source of revenue and tends to be less cyclical, unlike it happens with the equipment selling business.
It goes without saying, the future of equipment manufacturers goes beyond being exclusively manufacturers, but also in adding value to processes with an excellent service along the whole product life-cycle throughout, and beyond the shadow of a doubt, monetizing them.
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