Diteck, a manufacturer of surge protectors, based in Largo, Fla., tracks the true cost of customer service independent of warranty costs or operating errors such as misshipments. By analyzing customer service costs, the company has been able to reduce the direct product cost to the customer.

Robert Daugherty, vice president and general manager, noticed that waiving the restocking charge for retailers who returned items after the 60-day return period was costing his company. The retailers had overstocked during the storm season and didn't want to carry extra inventory in the off-season. Since Diteck uses just-in-time manufacturing, a little retailer education solved the problem. The dealers now order smaller, more frequent shipments to prevent overstocks. As a result, everyone's costs are lower.