In an age of servitization and advanced services, spare parts management has become something of a difficult beast to fully grasp for many companies who are offer aftermarket services.

For example, in a world of guaranteed up-times, the cost of failure to keep an asset running can often far outweigh the lost revenue from the sale of the replacement part needed to get the asset back up and running and fully functional again.

Yet, the path to servitization is not an easy one to tread - so is it worth cannibalising what for many service companies is a reliable, consistent and strong revenue stream in its pursuit?

Whichever route companies ultimately turn to, one thing is certain, spare parts management is going to be a crucial aspect within the service delivery sector and as with mobile workforce management, there are a number of technologies and innovations that are emerging that could change the way we approach parts management in the future.

Therefore it was with great interest that we took a look at the insights from a recent research project undertaken by Copperberg. The research was conducted online across the last month primarily to Copperberg’s own audience of conference delegates.

In total the there were 65 responses to the survey and these representatives were all professionals within the sector ranging in seniority from parts managers through to Managing Directors - although the main body of respondents were at the division head/director level on a national scale.

The majority of respondents were from Europe although other regions, including China, were represented. The respondents were largely from manufacturing verticals, which would be anticipated given Copperberg’s flagship event the Aftermarket Business Platform is also a manufacturing dominated event. However, there were a number verticals within the manufacturing sector represented including heavy machinery, medical and automotive.

So let us take a brief look at what trends the research revealed...

Want to know more? Click here to Visit Copperberg's website to register for an exclusive white paper based on this research!

Inventory Management:

Inventory Management sits at the heart of good parts management as without the ability to track components and parts at any given time as they move from depot to the field (and potentially back again depending on a companies approach to repair and reverse logistics) everything else within in the equation becomes open to inaccuracies and subject to guesswork.

Indeed, the importance of inventory management appears to be hugely important within the organisations represented within Copperberg’s research with 91% of the respondents ranking it as being either four, five or six on a scale on to six with six being very important. In fact, almost half of the respondents (43%) listed Inventory Management as very important (6) - further emphasising the significance of inventory management in the context of spare parts management.

So it is absolutely shown to be clear in the research that the focus on inventory management remains one of utmost importance for the vast majority of companies.

Parts Pricing and eCommerce:

Parts pricing is also another area that was unanimously outlined as being important to the survey respondents.

This is particularly interesting as the fact that so many companies still view parts pricing as being highly important to them could be viewed as an indicator that the revenue streams that come from spare parts sales is still very much a critical part of the aftermarket landscape.

In fact, 86% of respondents stated that they felt parts pricing was at least a four on the same scale as listed above, however, here it was just under a third of respondents (32%) that felt this issue was very important.

eCommerce is of course another area that is heavily linked with parts pricing and there are indeed some correlations between the two areas, yet in terms of responses, eCommerce remains somewhat less of a priority than pricing.

With regards to eCommerce, exactly two-thirds of the respondents (66%) listed it as a four, five or six with only 16% seeing it as being very important (6).

This is quite an interesting difference between the two as we might have anticipated these results being more closely aligned.

One assumption, however, may be that with regards to eCommerce the solutions have now matured and so most manufacturers in 2018 may have at least some form of eCommerce solution in place - perhaps this explains why it is viewed as less of a priority?

This is certainly though an area for further discussion - something that will be surely had at the Copperberg Spare Parts Business Platforms which are running in Q1 next year.

Digitalisation:

Digitalisation is the key buzzword of the last few years although given that it encompasses a number of important shifts within the current evolution of business processes this is perhaps to be expected and there is no denying the importance of digitalisation within the field service sector and it is also a major consideration within the closely related function of parts management as the research reveals.

Digitalisation was ranked was 71% of the respondents to the Copperberg survey as being listed as either a four, five or six on their scale of importance, with 22% of respondents listing it as a six i.e. very important.

This places digitalisation as being deemed to be not quite as important to the respondent base as Inventory Management and Parts Pricing but more important than eCommerce.

What is interesting to note here is that these two very specific niche challenges seem to be in some-ways the eternal, perennial headaches of the sector, whilst broader, business-wide concerns such as digitalisation are possibly more likely to appear as an issue to overcome in the short-term which in themselves could lead to improvements in other areas - such as improved inventory management for example.

Which leads us neatly into...

3D Printing & Artificial Intelligence:

Two perfect examples of exciting new technologies that are emerging would be 3D Printing and Artificial Intelligence (AI) - with one set to play a hugely significant role in the niche of spare parts management, whilst the other will play a broad role in almost all sectors, including spare parts management.

So how do the industry experts who made up the Copperberg respondent base see each of these exciting technologies impacting the spare parts management sector?

With regards to AI just over a third of respondents (35% ) thought it would be important to some degree (again listing it as either a four, five or six).

However, less than a tenth of the respondents (9%) felt that AI was currently very important for them.

In terms of 3D printing, surprisingly the numbers were even lower.

In fact, less than a third of companies listed 3D Printing at a four or higher and only 8% of respondents felt that 3D Printing was very important in the sector currently.

Parts Logistics:

One area, however, that was overwhelmingly listed as being important within the field of spare parts management across the next 12 months was that of parts logistics.

94% of respondents listed parts logistics as being at least a four in the scale of importance with over a third (35%) going on to state that they felt parts logistics was important enough to warrant being listed as a six.

This makes parts logistics one of the most important areas in the spare parts sector across the next twelve months according to this respondent base, although Inventory Management is very important to more companies.

Conclusions:

The results of the survey bring us some interesting conclusions - particularly when we stand them alongside the trends we are seeing from within the field service sector.

Of course, field service and parts management are two leaves on the same branch with deeply symbiotic relationships between the two.

Yet, from this research at least, it does seem that many of the forward-looking discussions we have been having within the field service sector, particularly around emerging technologies such as AI, IoT and Augmented Reality as well as the wider topic of servitization as a strategy for business growth - may be further down the line than their equivalent discussions with our spare parts colleagues - and in some companies that may be significantly so.

Perhaps, part of the reason for this is that parts management is a highly complex beast with a huge amount of moving parts (literally) and even if solutions such as inventory management systems have been put in place it may take time for the benefits there to be truly felt.

However, the simple fact is that no matter how efficient field service management is - it all falls out of the window if parts management is poor - and this is perhaps the greatest learning from the research - that the focus of professionals within the parts management sector currently remains on efficiencies - and for that, we in field service should be hugely grateful.

Want to know more? Click here to Visit Copperberg's website to register for an exclusive white paper based on this research!

Be social and share...