Aftermarket in general and Automotive Aftermarket, in particular, are facing quite a lot of challenges everyday. It is believed that servicing a vehicle is more complex than manufacturing them. Maintaining the logistics with no clear visibility of parts and then making those available at most varied locations and geographies becomes a complex transaction.
The vast amount of data is dynamic and is subject to constant change. The aftersales network has to support all the products that has been sold since the past. If we add up all the types of vehicles, changes of ownership and related vehicle information, it is evident that this sector contains an enormous amount of information. It is true that a typical service network has to deal with 20 times more SKUs then manufacturing function. In an industry where accurate data is often business-critical, getting an overview and managing all of this information can be a real challenge.
Also, the entire market is completely unpredictable and inconsistent, because demands are likely to crop up unexpectedly and sporadically. Not to forget that the companies have to deal with return, repair and disposal of components which have been a misfit. We know European aftermarket primarily has two channels, the authorized and the independent. The authorized channel is composed of vehicle manufacturers (VMs) and their country organizations, dealer networks, and repair shops. Second, independent channel is largely consisting of independent service providers working for multiple brands.
Now, if we were to look at the kind of end customer who eventually enable growth within the market are:
- Loyal – People who are already your customers and always rely on you for their aftermarket needs.
- Potential – Customers who already own the brand are getting their aftermarket needs fulfilled from somewhere else and can switch if you provide better services.
- Newbie – Customers who have recently purchased the brand and haven’t approached for anywhere for any aftermarket needs.
Now the all-important question is how to satisfy and thus increase customers? As an independent channel player or OEM, it is crucial to achieve the long-term growth. At the same time, it is extremely important to address the challenges which are arising with new regulations and changing trends.
These are some key issues which if left unattended, are likely to cause an unnecessary increase in the operational cost and reduction in revenues.
Accurate parts Identification – This is one of the toughest aftermarket challenges. The exact identification of vehicle and their parts is very crucial. This remains difficult for service providers without the intervention of a technology platform. Also, it is important to keep up with the customer’s demand while keeping the rate of return as low as possible. This is also identified by the authors of an HBR article named as a “Winning in the Aftermarket”, it goes on to say that market currently is very inconsistent and highly unpredictable, and it’s better not to hoard large number of inventory, and rather use “Just in Time” principle.
Support availability with technology – It is important to make sure you have the right parts when customers need them. To achieve this your company will need to leverage the technology which can tell you which is the exact part that you need to fulfil the customer demand and reduce the rate of return. Customers turn to online communities and reviews, among other digital platforms, as a way to improve their purchasing decisions. Multiple platforms for online parts sales exist already. Digital will allow aftermarket players to further increase the automotive aftermarket value as connectivity helps them move closer to the end customer and generate big data.
Rate of return- The biggest pain area for any automotive business across the globe is accurate vehicle identification–lack of which leads to as low as 33% parts accuracy–meaning high cost on parts returns & replacements which can also lead to high repair cost. Wasted capital on multiple parts and inaccurate inspection data.
AutoDAP is an Automotive Parts Data Accuracy Platform which helps to identify the exact vehicle information based on which, parts accuracy is achieved. This digital platform helps identify the part with as high as 90% accuracy and vehicle identification with 95% accuracy. This will not only free Aftermarket service providers of unnecessary hassle and reduce the rate of return, but also delight customer with an extraordinary service.
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