Typical Services and TCO Categories
Distributors typically add value and reduce customers’ total
cost of ownership (TCO) through services and product features designed
to improve revenue, reduce process costs, reduce expenditures, reduce
the asset base, provide a special service or reduce other costs.
| Value Activities |
TCO Impact |
| Activity-based costing savings |
Processes, Expenditures |
| Bar coding |
Processes |
| Certified assembly |
Revenues, Assets, Processes, Expenditures |
| Consignment stock |
Revenues, Assets, Processes |
| Credit card procurement |
Processes |
| Direct computer inventory access |
Assets, Processes, Expenditures |
| EDI |
Processes |
| Energy audits |
Expenditures, Services |
| Engineering support |
Revenues, Processes, Services |
| Equipment reduction requirements |
Assets, Processes |
| Fabrication |
Revenues, Assets, Processes, Expenditures, Services |
| Freight reduction savings |
Expenditures |
| Information management |
Revenues, Assets, Processes, Expenditures, Services |
| Integrated supply |
Assets, Processes, Expenditures |
| Internet purchasing |
Processes, Expenditures |
| Lean manufacturing |
Revenues, Assets, Processes, Expenditures |
| Life cycle costing |
Revenues, Expenditures |
| Location trailer |
Revenues, Assets, Processes |
| MSDS management |
Processes, Services |
| New technology |
Revenues, Assets, Processes, Expenditures |
| Online services |
Services |
| Plant/equipment surveys |
Assets, Processes, Expenditures, Services |
| Plateau pricing |
Expenditures |
| Preventative maintenance |
Revenues, Processes, Expenditures, Other |
| Process system integration |
Assets, Processes, Expenditures |
| Procurement management |
Revenues, Assets, Processes, Expenditures |
| Product and maintenance training |
Processes, Services |
| Product quality evaluations |
Revenues, Processes, Services, Other |
| Product repair |
Assets, Processes, Expenditures, Services |
| Product selection/substitution |
Expenditures |
| Product standardization |
Revenues, Assets, Processes |
| Production efficiency |
Revenues, Processes |
| Project management |
Revenues, Assets, Processes, Expenditures, Services |
| Project material staging |
Revenues, Assets, Processes |
| Radio frequency identification (RFID) |
Processes |
| Rebate savings |
Expenditures |
| Safety training and audits |
Revenues, Processes, Expenditures, Services, Other |
| Summary billing |
Processes |
| Surplus reduction support |
Assets, Processes |
| System design |
Revenues, Assets, Processes, Expenditures, Services, Other |
| Technical support |
Revenues, Processes, Services |
| Tier pricing |
Expenditures |
| Tool crib management |
Revenues, Assets, Processes |
| Vendor managed inventory |
Revenues, Assets, Processes |
| Warranty administration |
Processes |
MORE
Value Selling Overview
Typical Services and TCO Categories (downloadable
list)
Case Study: Product Substitution 
Case Study: Project Management 
Worksheets and Terms 
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