A few miles off Interstate 696, outside Detroit, the factory service center of a consumer goods company blends easily into the commercial landscape. The seven people who work at the customer support site sell parts, refurbished products, and accessories; repair products; and answer service and maintenance inquiries. Until recently, the manufacturer paid scant attention to this place or to its whole network of factory service centers, which were seen merely as a cost of doing business—the price a company pays to support products that eventually wear out or break. Then a new division manager discovered that despite years of neglect, the centers were earning margins upward of 20 percent, more than twice those of the core business. Now the company is planning to open centers in ten new locations across the United States and expects network-related revenue to double by mid-2003, thereby providing a full 10 percent of the revenue of the division and 15 to 20 percent of its profits.

A handful of US companies have achieved similar results; with small capital investments, so could many others.¹ Factory service centers can not only generate cash but also provide a gateway to the lucrative world of services. Trucks, for...