9. STAGES OF AFTERMARKET SUPPLY CHAIN EVOLUTION
1. Infrastructure
Capability building
Supply chain
organization
Stages of Aftermarket Supply Chain Evolution
2. Cost reduction
3. Collaboration
Root cause analysis
Multi company improvement
Item stratification
programs
Execution of basic tasks
“Optimal” buys
Supplier reduction
Quality systems
Outsourcing
Negotiations
Supplier ratings Lead-time
reduction (cells, small
Demand-driven
batches)
supply chain Mostly forecast driven;
backorder and simple service Modest JIT/pull
level indicators
arrangements; 25% of
demand-driven potential
Supply chain
systems
Stage
Challenges
Basic capabilities (e.g. Bills of
Material)
Data timeliness & accuracy
Paper-based or rudimentary
computer procurement
systems
Mature technology
deployment (ERP, EDI,
forecasting tools)
Financial sharing arrangements
4. Strategic contribution
Customer-focused
organization structures along
supply chain Supply chain
level steering committees
Design changes
Segment strategies
Postponement strategies
Information exchange
New product involvement
(inventories, forecasts, demand)
50% application of demand-driven 80-100% implementation of
potential
demand-driven potential
Web-based technology for
information exchange
Partner system integration
Increased use of customized
transaction and planning tools
integrated with supply chain
operations
Stratified forecasting and
inventory practices
People, skills, discipline, time Systems support, knowledge Procurement paradigms,
willingness and/or ability to be
Inertia, unwillingness to
creative
change supply chain
partners and their roles
Barriers between operations,
engineering, and marketing
functions
Difficulties in coordination
Amenability of the supply
chain for such collaboration
Weak links in chain
10. AFTERMARKET AUTOMOTOIVE DISTRUBUTOR CATEGORIES
Positive Contributions
“Exclusive”
Branded
Distributor
•
•
•
•
Full dedication & loyalty
Solid commitment of sales target, growth
Management convenience/order
Client part expertise
Constraining Issues
• Expect heavy support from Client side
• Limited overall scale
• Challenge in control of grey channel activity
• More powerful distributors
• Quick market access with nationwide network
• Solid commitment of sales target, growth
• Needs close eye on pricing order & territorial
activity
• Some need of financial assistance i.e. rebate,
payment credit-term
• Diluted effort on Client
Applicationspecific
Distributor
• Better expertise/dedication
• Effective to gain share in specific vehicle
makes
• Narrow focus—needs specific support
• Supervision
• Available candidates in new vehicle group
Basic
Distributor
• Supplemental channel-especially for
secondary areas
• Higher mark-up
• May “upgrade” into general distributor
• Loyalty turns out problematic
• Little solid commitment – small scale
Regional
General
Distributor
16. BRAND PROTECTION STRATEGIES
Branding Technique. Techniques include unique fonts
and graphics, colors and special additives for laser
marking, along with a mix of overt and covert marking.
In-line verification and compliance Technique . The
need to verify code accuracy and repeatability is vitally
important in brand protection efforts, so a
manufacturer knows (and can verify)what codes have
entered the supply chain. Often this requires highquality results printed at high production line speeds, a
difficult feat for ink jet printers 10 years ago.
Production line controls Technique: Production line
controls are often required to create “parent-child”
relationships by tracking items into shipping cartons
and shipping cartons into cases. Production line
controls actually monitor each item as part of the
production flow and keep accurate counts while
assigning unique identifiers in the process. If required,
the controls can interface with in-line vision systems to
validate code accuracy or to read and print
downstream.
17. WHAT NEED TO BE DONE ?
INTIATIVES
1.
2.
3.
4.
5.
Improving and extending the aftermarket service offering
Adapting service offerings to local requirements
Increasing the local market penetration through target consumer awareness programs
Optimizing the supply chain planning processes
Formulating and Executing robust Brand Protection strategies
IN INDIAN CONTEXT…
In India, there is a general balance between priority and potential associated with improvement
activities. Explorers are confronted with multiple challenges in the marketing and sales,
distribution, sourcing and planning areas. Aftermarket champions seem to have already
positioned themselves and to have overcome most of the initial challenges such as setting up
local warehouses and dealer networks as well as integrating local warehouses and dealer
networks into their planning, sourcing and reverse-logistics processes.
Additionally, the Indian market does not provide significant volume nor very demanding
customers. This indicates that efforts in the operational level can be managed with cost focus
(as of now) and that aftermarket champions prioritize their efforts in this market according to
the current market maturity stage. They seem to hold back until this market really becomes
attractive which is of course going to happen once second-hand automobile market booms.
20. BIBLIOGRAPHY
1. The Aftermarket in the Automotive Industry : How to Optimize Aftermarket
Performance in Established and Emerging Markets (Capgemini Consulting & Institute
of Technology Management, University of St. Gallen)
2. Global Selling and Sourcing, Jack Cameron, AASA Vision Conference 2008.
3. Car Blueprints 1925 MG Super Sport
4. The Brand Gap - Berkeley Communications Conference, 2001 (Pdf)
5. Lucas Electricals Corporate Website – UK
6. Percept OOH Campaign website – Details of SKF Outdoor campaign
7. Annual Brand Protection & Anti-Counterfeiting , www.brandprotectionevent.com/