As After-Sales Service Supply Chains Face Growing Pains, PTC’s Servigistics Platform Has the Potential to Address Complexities

The after-sales service parts supply chain plays a pivotal role in various industries, backing the maintenance and repair of products after their sale. The market for service parts and its supply chain is quite substantial, with a significant impact on manufacturers. A growing number of companies are realizing the importance of providing spare parts and after-sales services. Just taking the automotive industry as an example, the entire U.S. automotive aftermarket, including light, medium, and heavy-duty vehicles, is valued at nearly US$520 billion this year and is projected to be around US$574 billion in 2026, per Automotive Aftermarket’s publication. This valuation and level of growth really highlight the economic significance of the after-sales service parts market. This is especially relevant considering the developments around the Right to Repair Act in Europe and in the United States, which would prohibit manufacturers from imposing technological or legal barriers that block aftermarket replacement part manufacturers from accessing critical information and tools necessary to develop and streamline repair processes, making repairs cheaper and more efficient for consumers. It also established the right for replacement part manufacturers and independent repair shops to access critical information, tools, and equipment to maintain equipment, appliances, devices, and even vehicles beyond Original Equipment Manufacturers (OEMs). This is a vital step for a circular economy and sustainability, in general, as devices and equipment will last longer. This would also mean more strain on the after-sales service supply chain. An after-sales service supply chain looks vastly different from a manufacturing supply chain. When it comes to manufacturing, the focus is on customer acquisition, whereas a service supply chain needs to look at its operations from a customer retention perspective. Service supply chains not only have to look at production and design, but also repair implications of finished goods. As a result, the demand drivers will be metrics like sales, equipment failures, and Service-Level Agreements (SLAs) as opposed to just projected customer orders. The demand for service parts is directly tied to asset availability, customer satisfaction, brand loyalty, and compliance with regulatory requirements, making efficient supply chain management vital for manufacturers.

The service parts supply chain is not without its challenges. One of the major pain points is demand forecasting and inventory management. As the nature of demand signals is more unpredictable and sporadic, tools that can accurately predict the demand for various parts and ensure adequate inventory levels without excess stock manage that delicate balance. Additionally, the service parts supply chain often involves a vast network of suppliers, making coordination and communication complex. Timely delivery and efficient handling of parts across different geographies and centers also pose significant logistical challenges. As service must support legacy products, there can be a complex web of interchangeable parts that share the same fit and function. Another critical issue is the aging and obsolescence of parts, requiring careful planning to manage discontinued products and ensure the availability of replacements for older models. As a result, there is a growing market need to improve asset availability, while optimizing logistics costs and mitigating uncertainties. Getting the right parts at the right time remains a fundamental challenge in after-sales services. These pain points emphasize the need for robust technology integration, data analytics, and streamlined processes within the service parts supply chain to optimize performance and enhance customer satisfaction.

In order to better support service supply chains, businesses can employ a systematic approach to improve after-sales service quality levels, reduce investments in holding a large amount of service inventory, and cut operating costs. First, identifying which products to cover in terms of providing after-sales support and creating a portfolio of service products accordingly will be key. After that, decision makers need to select the correct business models to support service products, which might vary depending on the products and their lifecycle. Designing and managing an effective after-sales services supply chain will be required after this. Deciding the location of resources, prioritizing resource utilization, and planning for contingencies will be imperative.

Leveraging digital solutions that optimize the service parts supply chain in a data-driven approach to ensure the right parts are being delivered timely, and in a cost-effective manner will be needed for this. Technology firm PTC’s Servigistics is one solution that strives to better serve the after-sales service parts management and supply chain. Servigistics stands out in the market with over 40 years of developing purpose-built service supply chain capabilities and applying AI-powered capabilities and algorithms to help OEMs mitigate the complexity of the service supply chain. Servigistics isn’t alone in PTC’s vision to deliver better service. Since the acquisition of ServiceMax nearly a year ago, PTC has been extensively developing its after-sales service offerings as a key part of its closed-loop PLM strategy. The solution uniquely blends asset and service parts visibility capabilities with advanced analytics—connected via a digital thread—to help better plan after-sales service supply chains. Although a lot of organizations face the need to restructure their entire after-sales service operations, using digitalization solutions like the Servigistics platform undoubtedly holds the key to improving efficiencies.