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The management of machine spare parts will completely change in the next 5-10 years. Instead of multi-million-dollar spare parts inventories, at the factories of many operators, a business model of availabilities, in the form of services, will emerge.
This will shift today's CAPEX intensive practices into OPEX-based models. More specifically, this means inventories will disappear from the operator books (off-balancing) and become a thing of the past. This avoids additional scrapping costs, which are generated when machines are decommissioned or unused spare parts are removed from the warehouses after many years.
SPARETECH has identified three key drivers that describe this change process of spare parts management. They are:
- Automation und
- Actionable Insights
Availability means that spare parts are available at any time, anywhere Machine operators will no longer physically own the parts, but will have guaranteed availability. This helps reduce working capital by more than 80%, because parts are only procured when they are needed. This form of availability is achieved through systems networking in the cloud as well as software innovations and 100% correct master data.
The second A stands for Automation. In the future, spare parts can be identified and ordered within seconds. Current workflows like searching for a spare part on Google or requesting quotes via email will become obsolete. Future requests for spare parts will be answered reliably based on a huge data basis leaving almost no need for technical clarification during the procurement process (e.g., due to a discontinuation of a part).
Actionable Insights, the third A, describes the increasing network intelligence in spare parts management. For example, decisions about stocking spare parts are supported through anonymized consumption data from other market participants. As a result, new business models such as spare parts pooling emerge. Pooling describes a spare parts warehouse operated by third parties supplying regional customers with spare parts. Similarly, this approach enables operators and spare part suppliers to join forces and implement automated purchasing solutions based on shared data. The more complicated field of spare parts after-sales becomes a discipline after sufficient data points become available for a reliable demand planning of spare parts from the manufacturer's and supplier's view. This would be a great step forward, considering that this field is generally characterized by the low predictability customer demands.
To make this vision a reality, SPARETECH is working closely with strong partners in the field of industrial automation, logistics as well as financing and will present the first pilot of AAA reality in 2021.
Stay tuned for updates and contact us to learn more about the digital world of spare parts.