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As aftermarket digitizes, many still…

As aftermarket digitizes, many still rely on manual processes

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A third of aftermarket automotive service professionals still rely on manual processes to manage spare parts, limiting their ability to meet customer demands and optimize supply chains effectively, a recent report found.

Syncron, an intelligent service lifecycle management solutions provider, announced the results of its 2024 research report, Modernizing the Aftermarket, which surveyed 600 global service and supply chain decision-makers.

Although the number of shops using manual processes to manage spare parts has decreased from 56 per cent in 2023, Syncron said this year’s numbers highlight the urgency for digitization.

“As automotive companies face unprecedented shifts in the aftermarket landscape, there is an urgent need for new approaches to service delivery and digital transformation,” said Claudine Bianchi, chief marketing officer at Syncron. “Our research underscores the need for automotive leaders to rethink their strategies for talent retention, technology adoption and sustainability to maintain competitiveness in this evolving market.”

The report also highlights that nearly half of respondents (44 per cent) reported significant difficulties in attracting new talent, while 47 per cent cited challenges in bridging the skills gap.

Syncron believes these statistics signal a growing crisis that threatens to undermine operational efficiency and customer satisfaction for service providers. The increasing gap in both the quantity and quality of available technicians means automotive organizations will need to focus on retaining valuable expertise and transitioning to advanced service models.

Other key findings from the report show that as the automotive sector pivots from traditional sales to outcome-based service models, many are hindered by inefficient supply chain processes, unclear contract pricing and a lack of talent capable of handling these complexities.

Over the next five years, organizations have indicated a desire to transition to an outcome-based service model, expecting business revenue generated through this method to increase from 26 per cent to 41 per cent, on average.

With outcome-based service models now accounting for 38 per cent of all profits in the automotive sector, the need for more sophisticated service delivery systems has never been greater. To succeed, Syncron said organizations must invest in technological integration, streamline communication between OEMs and dealers and ensure that all parties are aligned with service objectives.

The report also showed:

  • Nearly half of respondents believe optimizing their supply chain would provide their organization with the biggest revenue or margin increase.
  • Improving parts pricing models (55 per cent), supply chain infrastructure costs (53 per cent), and optimizing inventory levels (47 per cent) are all seen as areas that would benefit organizations.
  • Almost all respondents (99.6 per cent) believe that by investing in desired operational improvements, profit could be increased, with over a third (34 per cent) expecting this increase to exceed 15 per cent.

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