As the world continues to change and evolve, innovative OEM executives are shifting their focus from the product side of their business to after-sales service. In fact, McKinsey and Company recently revealed that upwards of 15 percent of OEMs’ total revenues come from parts and service.
So, while organizations’ product-based revenues decline, and margins diminish in maturing industries like high tech, aerospace, motor vehicles and consumer and industrial products, after-sales service margins remain the healthiest in the game. Simply put, service revenue is more predictable, making it the attractive choice during these rapidly changing times.
CLAAS Reaps the Benefits of Service Parts Management
And, just like the industries above, many agricultural OEMs are feeling the push to shift toward service – which is why CLAAS, a family business founded in 1913 and one of the world’s leading manufacturers of agricultural engineering equipment, just picked Syncron Inventory – Retail to optimize its spare parts inventory throughout its global network of dealers.
Because of the seasonal nature of the industry, agricultural equipment manufacturers need to ensure replacement parts are available in peak season, when and where they are most in demand to guarantee product uptime. Missing parts can lead to idle equipment, which directly impacts farmers’ revenues.
That’s why CLAAS, the European market leader in combine harvesters, decided to start the search for a solution that provides centralized and automated service parts management, improved inventory quality of the distribution network, increased part availability and reduced excess and obsolete stock.
“Syncron was the only provider offering such a comprehensive solution, and the company’s laser-focus on after-sales service is extremely beneficial – everything from the solution itself to the Syncron team is 100% dedicated to the after-sales service supply chain.
Syncron’s strong commitment to product development, and the impressive cross-collaboration between our two teams, will enable us to meet our customers’ service needs in today’s ever-changing world.” – Christian Buck, Supply Chain Manager at CLAAS
Pre-Syncron, each CLAAS dealer had its own somewhat manual process for managing spare parts inventory. Separate dealer management systems, different levels of data quality and hardly any system-based order processes for refills led CLAAS to seek a more efficient process. So, while on the hunt for the perfect service parts inventory management solution, CLAAS had four must-haves on their solution wish list:
- Excellent spare parts planning performance
- Sophisticated order workflows
- Easy monitoring across systems
- Advanced analytics and reporting
Syncron Inventory – Retail checked all of those boxes and will now be implemented throughout the CLAAS global network of dealers across all business units and product lines. Long term, the company is aiming for optimized inventory and order behavior, increased off-the-shelf availability, time savings in the order process and transparency in spare parts planning throughout the distribution network, with the solution ultimately handling up to 10 million SKUs.
“Today’s most innovative agricultural equipment manufacturers are increasingly focused on maximizing the uptime of the products they sell,” said Johan Stakeberg, Head of Global Sales at Syncron. “We’re thrilled to work with CLAAS to optimize service parts inventory across their expansive dealer network to maximize product uptime– ultimately delivering exceptional customer experiences while simultaneously improving margins and revenue.”
Stay tuned as we follow the CLAAS journey with Syncron, and watch as they join the proactive leaders in after-sales service by moving service to the forefront of their organization.