The Aftersales Digital Thread for OEMs is Needed Now More Than Ever

29 April 2024

OEMs are losing 67% of their parts revenue to third-party part sellers, based on Partful’s recent research on 1250 parts buyers (dealers and end customers).

On the contrary, OEMs think they only lose out on 18% of parts revenue to non-OEM sellers.

I seriously questioned why there was such a discrepancy. After years of working with OEMs across Automotive, Machinery, Medical Devices and Appliances, I realise that the root cause is the lack of an aftersales digital thread.

This interconnected network of data and processes, spanning from engineering to supportability, holds an immense impact on OEMs’ bottomline.

So what is it?

What is an Aftersales Digital Thread and Why is it Important?

The aftersales digital thread is the seamless integration of data and processes across the entire lifecycle of a product, from design and manufacturing to service and support. 

It enables real-time access to critical information, such as parts data, and maintenance information for the end users. This affects the OEM’s customer experience on so many levels.

It all goes back to the bottomline. If your customers and dealers are not having a great experience finding parts information from you, they will leave. 

On the other side of the thread, customer feedback and parts data facilitate faster decision-making and proactive service interventions for OEMs. In the current disconnected world of aftersales, this data is unobtainable or too difficult to collect.

This is why OEMs can’t even read the pulse on how much parts revenue they’re losing.

Cutting OEMs some slack, I want to emphasise there are serious blockers to establishing the aftersales digital thread for OEMs.

There are 3 biggest barriers to this.

Three Biggest Blockers to OEM Aftersales Digital Thread

1. Outdated Data Management Technologies 

Many OEMs still rely on legacy systems and manual processes for managing aftersales data, leading to inconsistencies, errors, and inefficiencies. The lack of modern and integrated technology solutions hampers the ability to effectively leverage data for predictive maintenance, demand forecasting, and personalized customer experiences.

2. Cultural Barriers Between Engineering and Aftersales

Siloed organisational structures and cultural divides between engineering and aftersales departments pose significant obstacles to establishing a cohesive digital thread. Misalignment in priorities, communication breakdowns, and resistance to change inhibit collaboration and hinder the sharing of valuable insights and expertise.

3. Overlooking the Potential of Aftersales Revenue

Many OEMs underestimate the revenue-generating potential of the aftersales market. By focusing primarily on product development and initial sales, they miss out on lucrative opportunities for recurring revenue through spare parts sales, maintenance services, and aftermarket upgrades. Neglecting the aftersales segment not only limits revenue growth but also erodes customer loyalty and brand reputation.

The Path Forward

To realise the full benefits of an aftersales digital thread, OEMs must embrace a holistic approach that addresses both technological and cultural barriers:

Invest in Modern Data Management Solutions

Adopting cloud-based SaaS platforms, advanced analytics tools can streamline data management processes and provide real-time insights into product performance and customer behaviour.

Foster Collaboration Across Departments by Setting Joint Meaningful KPIs

Break down silos and foster a culture of cross-functional collaboration between engineering, aftersales, and other relevant departments. Encourage knowledge sharing, joint problem-solving, and regular communication to bridge the gap and align efforts towards common goals.

I recently highlighted this in a podcast episode on Establishing Aftersales Digital Thread for OEMs. 

By plugging the engineers to rotate within the aftersales helps improve the collaboration between the teams while improving performance and reducing equipment breakdowns via design changes.

However, setting meaningful KPIs such as product profit margins for both teams can also be organisationally transformational.

Looking at this, the change has to come from the top down. It can’t be leadership shouting “Collaboration! Teamwork!”. The whole context of reward and performance monitoring has to change as well.

Redefine Aftersales Strategy

Recognise the aftersales segment as a strategic growth driver rather than an afterthought. Make finding and ordering parts easier for dealers and customers with the use of a 3D interactive parts catalogue that’s fully integrated with their existing systems such as ERPs and PLMs. This will enable them to create the aftersale digital thread that can maximise their profit margins. 

In conclusion, the aftersales digital thread is not just a luxury but a necessity for OEMs seeking to thrive in today's competitive marketplace. By overcoming technological barriers, fostering cultural transformation, and embracing the untapped potential of the aftersales segment, OEMs can position themselves for long-term success and deliver unparalleled value to customers throughout the product lifecycle.

Sam Burgess Sam Burgess

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