While it's common knowledge among OEMs that Aftersales often costs a large amount to maintain, it's also one of the most missed profits.
Over 80% of consumers and 52% of professionals admit to encountering difficulties in spare parts identification and ordering, especially when engaging directly with OEMs.
So we've taken a deep dive with our Head of Engineering, Carl Kenyon, in why it costs so much to support Aftersales functions.
Customer Care
OEMs need to get hands-on involvement with their customers.
Which comes at a cost.
OEMs need to lockstep with their customers so that when a Parts Catalog is created and inevitably updated they’re still thinking about the customer's or end user's support journey.
That could include a single part change, or more commonly, a full kit or multiple parts and tools that are needed to complete a work instruction.
Customers need information about product updates from the earliest point available so that they’re able to experience the smoothest, easiest repairs and maintenance process.
All of this impacts exactly how customers are going to perceive the brand in the future, and how they’ll go on to purchase their spare parts - whether that’s a repeat OEM customer, or they find a new solution in a third party, unofficial spare.
Even if ordering from a third party feels like the riskier option.
Ease of availability from third parties
85% of end users go for a third-party spare parts seller rather than the OEM.
With the OEM to Dealer, Dealer to End User structure, the end user rarely has contact with the OEM.
Dealers cut out the end users' need to identify the spare part, parts, or kit.
They also remove the need for multiple phone calls, emails and potentially ordering the wrong part - which could be disastrous for everyone involved if the part they order is non-refundable.
However, OEMs don’t make this process easy for anyone involved.
Which is where third parties come in.
Third-party providers have optimized the ability to find and order the spare parts needed, whether they’ve been identified correctly or not.
So for end users looking for a quick fix of their own, or independent garages who are handling the fixes, the third-party provider removes the pain of trying to contact the OEM.
For the OEM though, the issue of accessibility has cost them 85% of a potential market.
Modernization
Electric vehicles are causing their own problems.
Modern EV parts are costing OEMs more money to maintain than ever before.
With no need for traditional oil changes, gaskets, or valves EVs are less financially sustainable for OEMs to maintain since the OEMs don’t own the Dealerships.
Unlike Tesla, which owns all its Tesla Service Centers.
The quality of service and expectations have also changed dramatically with new apps, ways of booking services and repairs, and higher expectations on OEMs/dealers as car ownership moves more to financing and warranty.
Suddenly, running a dealership network becomes more expensive, and dealers are spread too thinly across large areas of the country.
Manpower
Manpower has always come at the cost of time and money - any company knows this.
Aftersales and the Sales Bill of Materials (BOM) is often an afterthought - it follows after the Engineering BOM, the Production BOM, the Purchasing BOM, and more.
There’s technical knowledge embedded at each stage of the BOM process so that teams know exactly what parts will or won’t be sold, and which need to be compiled into a kit.
At Partful we’ve seen customers with Technical Documentation teams over 94 people compiling this data between departments and in larger OEMs it can be hundreds.
These teams are constantly updating manuals and parts catalogs, including teams working on regional translations around the globe.
Larger OEMs might have the use of PLM, ERP, or DMS, however for smaller manufacturers these aren’t available, or even with their assistance, they’re not enough to cut down time and money spent on producing a constant stream of work instructions, parts catalogs, and data.
Department silos between Production and Aftersales.
The lack of data transparency between siloed departments and teams within OEMs makes data transfers and collaboration unnecessarily difficult.
Where there’s an update in the original design, it takes data transferring from silo to silo - Design, to Engineering, to Production, to Aftersales - to finally update a Parts Catalog.
Transferring data can be unclear, lead to gaps in information, and have each department add in specific hidden information just to make their part of the process easier.
If this information isn’t communicated effectively, time and money are wasted repeating data over and over again.
For smaller OEMs with external suppliers, in that time it could be found that parts have become obsolete and no longer available - starting a design change or supplier search from scratch.
The Solution
The challenges that OEMs face - conscious or not- there is a lack of accessibility of data for those who need it.
This causes:
- Loss of revenue, missed profit margin opportunities, customer experience, and brand problems.
- Excessive manual processes and manpower.
- Overwhelming data to manage and track.
When companies have tools such as PLM, ERP, and DMS, they help to create singular sources of truth.
They allow users to access and harness data that help make informed decisions, whether that’s for the business, design, production, or service.
The spare parts demand comes locally from dealers, and changing systems to modern app-to-app software, systems that integrate seamlessly with existing data, and software that is easy to use, won’t negatively impact those dealer networks.
End users and customers will always want the smoothest, highest quality of service available.
Partful’s platform is striving towards full app-to-app integration, working with OEMs to create an Aftersales tool that will break down departmental silos and provide the most immersive Aftersales experience available on the market.
To learn more about Partful, our CEO Sam and Carl Kenyon our Head of Engineering in Episode 6 of our Podcast, “Why does it cost more to support than to manufacture for OEMs?”
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