Supply Chain for the After Sales Market

We know the supply chain concept, pretty much. And it is discussed usually in the context of the purchasing and inventory management for manufacturing or retailing organizations. But there is also a niche area of supply chain management for spare parts, or the after market as it is known in the jargon. I met a company which specialises in just this. They provide solutions to companies that have a lot of spares to market through dealers and distributors. The problem is huge, because thousands of spare part types may arise due to different models of say, cars or two-wheelers, over the years, all requiring quick availability at the consumer touch-points for fast service.

There is a lot of potential for large companies to save on costs by optimising their inventory of spare parts (the service supply chain), while keeping their customers (dealers, or distributors) happy and stock-out free. This company, Entercoms, Pune, employs a band of young people who act as the company's consultants to achieve this balancing act. Good job area for aspiring operations area graduates, MBAs or otherwise.

As a bonus, also visited the lovely golf course within the campus of FLAME, Pune.


Diamond Head said…
It is a huge market here in the states. Autozone is one of the larger public companies specializing in this. Many Original Equipment Makers (OEM) like say Bajaj also themselves will make parts for the AM. There is good money in it.
Rajendra said…
Yes, that's what it looks like, but B school awareness for it is close to zero. Planning to work with this company to reduce ignorance levels a bit.
Diamond Head said…
I once helped a major Tier 1 supplier in Detroit implement an 'order to cash' system for its aftermarket business. That is the other classification in the value chain - OEM - Tier 1 - Tier 2 and so on. Tier 1s typically will provide large components or modules to the OEM so that the OEM in most cases will simply screw modules together and put a badge on it. Cisco in the Hi tech world is a good example. Most of this tier supplier base is in low cost countries like China, Vietnam and India.
Rajendra said…
That's interesting info. You should have retired in the Bahamas by now.
ಭಾಶೇ said…
It is a big market.

India has a lot of these Tier 2 and Tier 3 manufacturers who supply to OEM's as well as to the market as spares.

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