Reading time: 4min
The spare parts management of machine spare parts will change completely 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 to OPEX-based models. Concretely, this means that inventories will disappear from the books (off-balancing) of the operators as a relic of the past. This way, additional scrapping costs are avoided, which are usually caused when machines are decommissioned or unused spare parts are removed from the warehouses after years.
In this context, SPARETECH has identified three key drivers that describe this change process of spare parts management. These are:
- Automation und
- Actionable Insights
In this context, Availability means that spare parts are available at any time and everywhere. Machine operators will no longer physically own the part but will have the guaranteed availability. This way, working capital can be reduced by more than 80% as parts are only procured when they are needed. This form of availability is achieved through the networking of systems in the cloud as well as software innovations and 100% correct master data.
The second A describes Automation. In the future, spare parts will be identified and ordered within seconds. Current workflows like searching for a spare part on Google or requesting quotes via email will become obsolete. The future request for a spare part will be answered reliably based on a huge data basis so that almost no technical clarification cases will occur during the procurement process (e.g., due to a surprising discontinuation of a part).
Actionable Insights, as the third A, describe the increasing network intelligence in spare parts management. For example, decisions on the stocking of spare parts are supported through anonymized consumption data from other market participants. As a result, new business models such as spare parts pooling will emerge. The Pooling describes a spare parts warehouse operated by third parties from which regional customers are supplied with spare parts. Similarly, this approach enables operators and suppliers of spare parts to join forces and implement automated purchasing solutions based on shared data. The usually difficult field of spare parts after-sales becomes a controllable discipline, when sufficient data points are finally available for a reliable demand planning of spare parts from the manufacturer's and supplier's view. This would be a great leap forward, considering that this field is generally characterized by the low predictability of the customer’s demand.
To realize this vision, SPARETECH is already working very closely with strong partners in the field of industrial automation, logistics as well as financing and will present the first pilot of the AAA reality in 2021.
Stay tuned for updates and contact us to learn more about the digital world of spare parts.