Due to the complex nature of supply chains today, it has become increasingly difficult for manufacturers to address key issues like excess inventory, inconsistent operations and processes, and unsatisfactory service levels. Supply chain efficiency, therefore, has become the chief aspect of overall business strategy.

The world of manufacturing is undergoing radical changes and after sales services is a critical means to augment revenues and enhance profitability. The quality and coverage of services provided by companies greatly influence customer’s choices and determines their loyalty to a product. As a result, it becomes mandatory for the customers to balance the competing objectives of improving service levels while minimizing costs.

On various occasions, products are returned to manufacturers for a variety of reasons such as errors, damages or dissatisfaction. This is a major concern for manufacturers as research points out that on an average, 15 to 20 percent of goods sold are returned (Source:www.ascet.com). Return of products not only indicates chances of losing customer loyalty but also poses a huge risk of additional costs and losing value in the returned items.

The recession changed a lot of things in the business landscape for manufacturing companies. Financial turmoil and uncertainty reduced the ability of their customers to fund capital expenditures. But as companies reduced their CAPEX they started looking towards increasing the life of their assets by various means.They are also looking to transfer greater risk to their suppliers giving a major boost to alternate business models such as Outcome based pricing, where in place of products solutions are getting sold and business outcomes delivered.