11 November 2019

Supercharge your automotive aftermarket with intelligent, data-driven decisions

“It’s reported that the global automotive aftermarket industry will continue rising dramatically until 2021, with key areas of high growth being seen in the UK and across Europe.”

Perhaps, a little unsurprising?

The number of vehicles on our roads is, after all, rising dramatically – and so too is the number of drivers. We’re also driving more miles than ever before, and cars are being kept far longer than they have in recent years too. The propensity, therefore, for more spare parts and support is also on the rise; presenting fantastic growth and revenue opportunities for automotive manufacturers and OEMs.

If manufacturers get it right, this rise in demand has the potential to drive both productivity and profitability for these organisations, but only if they recognise the fundamental role technology plays in the future of their supply chain. Technology will be the driving force for developing the seamless, end-to-end deliveries that customers now expect and by using real time insights, plus absolute connectivity across the value chain, they can also look to gain significant brand trust and a substantial competitor advantage.

But what challenges do automotive manufacturers need to overcome to realise this? And why is technology – and specifically data – so important? This blog looks to explore how data intelligence can empower your aftermarket logistics strategy.

The second automotive industry and the modern customer

With a whole host of organic growth opportunities, ripe of the taking, you might be thinking, where’s the challenge?

Taking advantage of these trends is one that many organisations could see as a relatively straight-forward way of generating new revenue streams. And in truth, it can be. But, as our sub-header suggests, this is a new industry and one that requires organisations to understand their customer base and determine how and why they are likely to buy these services.

For example, we’ve seen a significant change in customer behaviour across all service-focused industries over the last decade, providing a catalyst for what we’re now seeing here in the automotive aftermarket. Millennial’s and post-millennial’s particularly, want more information, more control and to feel more engaged with a brand than ever before. They want to feel proud of the brand they’ve bought into and in turn, expect a seamless and connected experience, using a multitude of different platforms and smart devices. A one size solution no longer fits all.

While it might seem like our tech-driven world is making things more complicated, this extra layer is actually super-charging the aftermarket industry all over again…

The use of predictive IoT and connected devices for instance, has been boosted by this change in customer behaviour. They’re becoming more and more common in car manufacture and the benefit of them from, a revenue point of view, is that they can initiate repairs even before a car has broken down; giving way to even more revenue opportunities. It also arguably balances out any downturn that could have been brought by an improvement in spare part quality. Win, win.

Data intelligence and the value chain

It’s not surprising then, that the growth of connectivity and data in all areas of our life is causing a systematic shift in the way organisations need to run their aftermarket services. This is both in respect of capitalising on new revenue opportunities, and also in terms of keeping-up with the rising customer demand. There are however some challenges you will need to consider when attempting to deliver a customer-first approach. These include:

  • A significant cost increase for both logistics services and inventory management. Customers now expect more flexible delivery options (e.g. in room, in boot, out of hours delivery)and this could mean investing in new services to keep up with customer demand.
  • Inefficient warehouse and inventory management. Customers now want parts quicker or a technician to resolve an issue first time. This however can only work where there is an effective inventory and warehouse management system in place which will keep stock lean and returns efficient. Facilitating a ‘Just in Time’ logistics strategy is vital for delivering the pace customers are looking for.
  • Additional time required to manage outsourced service providers. To fulfil the above, there could be a requirement to engage with multiple logistics providers to fulfil a variety of dedicated services, and quickly, to ensure brands remain competitive. This could add lots of manual processes and administration time.

So how can organisations overcome these challenges?

For automotive brands, their future success will hinge solely on their ability to build a successful tech-enabled solution because, as we’ve demonstrated, there is a clear need for supply chains to be transparent, intelligent and predictive. The use of real time data will be crucial in this, while a central hub that hosts and normalises this data will bring the visibility, speed and efficiencies that organisations will need.

Easy access to key performance data, dedicated reporting tools and analytics will streamline processes and remove manual administrative tasks. This will enable brands to easily review, analyse and compare data, quickly identifying trends and areas for improvement and taking effective action to ensure key SLAs are met.

Not only that, the right service and technology platform will make it possible to coordinate multiple providers, third-party logistics and suppliers, whilst playing an integral part in achieving optimum inventory levels. We call this blending of technology and operations, Industry 4.0, and here are some more of the advantages an effective technology stack can bring:

  • Improved inventory and procurement planning
  • Enhanced warehouse operations incorporating intuitive technologies like RFID
  • Common platform for all stakeholders, featuring persona specific information
  • More data transparency and collaboration
  • Improved customer experience, by reducing response times
  • Integrated data for more effective issues management and quicker escalations
  • Streamlined processes, revealing significant cost and time efficiencies
  • Ability to scale quickly, and meet customer demand, particularly in peak seasons.

So, what next?

The future is bright, that’s for sure.

It’s clear, that given current industry trends, OEMs need to invest now in a robust technology suite and operational processes that can collect, analyse and share the data to improve aftermarket operations. Technology is advancing rapidly, and brands must now start developing their digital road map to ensure they’re ready for what’s up ahead.

At Carousel, we continue to look for ways to connect our clients’ with the right services, people and information to help them be successful and gain the competitive edge. That’s why we have invested so heavily in developing our own service and technology platform to help simplify our clients’ logistics, facilitate personalised experiences for customers, enhance operations, drive brand loyalty and ultimately improve the end to end economics of their supply chain.

If you’d like to find out more about Carousel’s service and technology platform – Gateway – and how it could improve your logistics performance, and give you that competitive advantage, then please get in touch. We’d be delighted to hear from you, whether you have a general enquiry or a technical challenge for our specialists, contact us here.