During October, Syncron attended the Aftermarket Business Platform. With speakers from companies like Volvo, Xerox, and LiuGong Machinery, the event attracts hundreds of knowledgeable and respected supply chain professionals. Syncron, like many other solution providers, uses the event as an opportunity to survey these experts about their plans.
Our latest survey shows some interesting (and sometimes surprising) developments in supply chain planning. This year, more than 120 supply chain professionals from 106 companies responded to our survey. They told us:
- When they are planning to change or upgrade their systems
- What systems they want to change (ERP, Inventory, Remanufacturing, Pricing)
- The greatest opportunity for improvement in the area of spare parts management
- Biggest challenges in the aftermarket supply chain
What to change and when?
We asked aftermarket professionals when they expected to change or upgrade their most important business systems, include Enterprise Resource Planning (ERP), inventory planning, price management and remanufacturing solutions. More than 30% of the companies surveyed are planning to make a major system upgrade or change within the next 5 years. Approximately 18% of those surveyed were expecting to change 2 or more systems within the next 5 years.
Given the long timeline, this doesn’t sound surprising. However, the average timeline for implementing the change was 2.03 years. Many companies looking to upgrade their ERP systems are also planning to upgrade or change their price and inventory management tools during the same timeframe. These results are surprising. Implementing a new ERP solution while also trying to upgrade price and inventory management tools sounds challenging. As a result, I expect to see companies prioritizing these projects. Considering the time-to-ROI, price and inventory management solutions will likely take priority over complex, multi-year ERP projects.
Price management is the tool in need of the most attention. While more of the respondents (33) were interested in upgrading their inventory management solution, pricing (26) was a close second. And, those that identified pricing as an area of change plan to execute on those projects soon – in less than 2 years. Sixty-one percent of companies planning pricing projects, plan to make that change in the next year.
As you embark on new projects to improve aftermarket and spare parts performance, take the time to realistically consider how long these projects will take to implement. At Syncron, we can often drive ROI for pricing and inventory management quickly. We deliver solutions in-the-cloud that leverage a business process platform that enables easy, fast implementation. Before you jump into a lengthy, costly ERP project, take time to build a business case. Figure out how quick wins in the aftermarket division of your organization can drive revenue and margin for the entire business. Hopefully, these successes will incur recognition and funding for more complex products.
In the next edition, I will discuss what professionals, like you, consider important now. While there wasn’t an enormous change from the 2013 survey, we received interesting feedback about the importance of balancing inventory. Many of the priorities highlighted in the survey are closely aligned with the system changes planned in the next few years. Stay tuned.