20 September 2016

Do you have a pain in your side?

Common pain points in aftermarket supply chains

Research commissioned by Carousel earlier this year identified that, aftermarket practitioners are failing to meet requirements in a fast-moving landscape. Added to that, a staggering 85% of companies said they experience at least one element of ‘pain’ in their aftermarket supply chains, leading to reduced levels of customer satisfaction and retention rates.

The source of ‘pain’ can be traced back to the all-important emphasis being placed on the customer; mirroring consumer-focused trends that now come as standard in the B2C industry.

The result? The need to provide fast-paced and often time-critical services with more flexibility is now greater than ever. However, organisations and logistics providers alike are struggling to meet this demand; aftermarket logistics services after all are increasingly difficult to manage. And the effect of this pain can have a sizeable impact on business overheads, as well as meeting KPIs and strict SLAs.

Despite the importance of maximising aftermarket efficiency, significant pain points still remain within the industry. This blog sets to explore what they are.

Say goodbye to standard reverse logistics

Aftermarket is an area of the supply chain often overlooked – long-term it is absolutely vital in ensuring customer retention and gaining competitive edge.

By providing insubstantial or absent aftermarket processes, not only does a company jeopardise customer satisfaction, but it can also lead to a system where timeliness, efficiency and accountability are rare. Though our study reveals that current service levels in logistics are ‘acceptable’, acceptable is a dangerous place to be in an increasingly competitive market.  ‘Acceptable’ indicates there are significant areas which require improvement which not only hold businesses back, but stop them from gaining that all important stand-out in the market.

Varying client expectations mean that providing a flexible service is critical for logistics providers – ‘standard’ practice is no longer viable. A ‘one-size-fits-all’ approach to aftermarket is where traditional logistics companies can fall short.

Outsourcing logistics, particularly if a non-core-competency, is a cost-effective practice for businesses to consider, especially where one single provider can offer a wide-reaching, flexible and personalised single solution.

External and internal communication

Communication was another key factor in aftermarket dissatisfaction. Many businesses attributed a lack of transparency as a common issue. It’s a common problem which can be caused by a weak structure of communication, both internally and externally.

Customer service is a large part of the modern delivery structure. Without a cohesive structure for retaining, responding and acting on customer feedback, it’s difficult to provide high levels of customer satisfaction and make improvements for the future.

Part of the communication solution can lie in technology to help accurately record and share information. Interestingly, our white paper research revealed that one quarter of people raised technology, (both for internal use and those offered by service providers) as an area for future improvement.

The key for overcoming communication issues is to provide a single gateway where customer orders, delivery information and order details can be instantly transmitted to people all over the business. State-of-the-art technology, fully integrated, offers the ability to give visibility and control across the supply chain, while also the option of continually considering feedback.

Slow warehouse management solutions

Though many businesses opt to retain in-house warehousing, our study revealed that 95% of distribution networks are mostly outsourced through a number of service providers. Where aftermarket support is concerned, warehousing solutions are an incredibly important element to streamline.

Warehousing operations are a commonly acknowledged issue with many of the companies interviewed for this research. Problem areas include a failure to register returned products or slow processes on sourcing new parts for replacements. While many may consider these ‘niggles’ as par for the course, these can have sizeable ramifications on inventory management and service efficiency.

Selecting a provider that offers integrated warehousing platform, or enhanced interconnectivity, will ease these niggles and ensure that your supply chain works around your business needs. To truly meet customer demand, you need to opt for a tech-enabled, intelligent warehouse solution that will help consolidate business functions. This will create an intuitive service minimising product downtime, delivering more visibility over stock management and ultimately streamlining processes.

Not tracking operations or stock

According to our study, 40% of companies identify visibility issues as a pain point. Often, this is because products in the process of being returned or replaced take a while to appear on some inventory systems. This means delays in being registered on stock tallies, and can cause skewed data in reporting and delays in being able to reuse the stock. With large amounts of items in circulation, often in multinational geographical locations, potential shipping customs and shipping charges and the reverse logistic process itself incorporated, it becomes clear how easy it is to lose track of stock and create difficulty in monitoring part locations. In the long term this can lead to stock wastage, decreased warehousing efficiency and lower capital.

Advanced technology can ensure all stock is monitored at all stages of transactions. By transmitting up-to-date, detailed reports of stock numbers and locations, with external stock ordering facilities, aftermarket efficiency can be improved, to support that all-important customer experience.

If you’re struggling to meet the demands of your aftermarket, or simply want to explore how you can elevate your customer service levels through logistics, then give us a call today to find out how we can help you. To speak to one of our trusted experts simply contact 01795 413602 for a friendly chat.

OR to request your copy of the Carousel white paper email findoutmore@carousel.eu or click here to download