OEMs that make complex machinery (whether it’s heavy equipment, automobiles, oil rigs, or other discrete manufacturing products) need to support their dealers and distributors. This can be a challenge because dealers and distributors tend to run as stand-alone operations (often they are independent franchises) that have their own business issues, separate but related to the business issues of the OEM. One of the ways OEMs help these business partners is via an electronic parts catalog, to provide accurate parts and service information, streamline parts purchases and simplify customer support/service.

But creating an up-to-date parts catalog is no small task; many forms of data (schematics, manuals, service bulletins, inventory, etc.) must be pulled from multiple database sources, and formatted into an application that is accessible to many users. That’s where Enigma comes in, providing Electronic Part Catalog (EPC) technology that: 1) makes it faster and less expensive to create and publish aftermarket support applications; 2) makes it easier to buy service parts from the OEM and distributors; 3) improves customer support/service.

Some OEMs are motivated by saving money on the front end; i.e., saving money on the cost of producing their catalog. Goodrich Aerostructures, for example, saves $1-1.5M per year in production costs.  Others, like Ford, primarily want to help sell the right parts fast, without increasing customer support costs.  Others are keenly interested in improving their end-users’ customer service experience, like Volvo, which embeds the Enigma EPC into Volvo VIDA, its dealer support system.  (Relative to its former system, Volvo service techs now make repairs faster and service more cars per day.) 

The advantage of Enigma’s InService EPC software solution is that it can be tied into the OEM’s order management, inventory, ERP and CRM systems to automate the entire customer support workflow. It also allows dealers and distributors to integrate the EPC to their dealer management (or ERP) systems to automate workflow and part procurement for the dealer.

However, some companies require a faster rollout and lower costs (in dollars and IT resources), and consider fully-integrated parts logistics to be a future objective.  The solution in these cases is a software-as-a-service (SaaS) solution.  As more companies embrace a SaaS approach to IT, Enigma has responded by offering a SaaS version of our tried and true EPC technology.  Enigma SaaS EPC is a powerful product that helps OEMs put parts and service information online very quickly, allowing the OEM to support dealers and customers with unlimited updates of service and parts data.

One advantage of Enigma SaaS EPC is that it reduces the time and cost of launching a Web-based service and parts storefront. It can be rolled out in 90 days, with little or no upfront IT investment. Furthermore, because the application is hosted “in the cloud,” it reduces hardware server and maintenance costs.  The SaaS EPC solution is particularly compelling for two business profiles: 1) small-medium businesses (SMBs) that wish to keep infrastructure requirements low; 2) larger companies that want to start small as they move their customer support (and EPC) to the Web.

There are good reasons for both solutions; OEMs need to determine their immediate requirements, as well as their future goals, and choose an EPC solution that supports both.

A recent article in Aviation Week noted that Goodrich Corporation released its fourth quarter and 2007 overall earnings report, in which its “commercial aftermarket sales rose a healthy 16 percent in 2007, and the company said its aftermarket growth may hit double digits again this year.”

Well, we can’t take all the credit for their aftermarket sales, but we do believe we played at least a small role in that success. After all, Goodrich has been using Enigma 3C for the past few years to streamline the production of its aftermarket parts and service catalog. In the process, Goodrich reaps the benefits:

• Saved roughly 1.5 million dollars in production costs alone each year
• Reduced the time needed to produce and deliver its parts catalogs by six months
• Reduced the wait time for catalog updates from three months to a few hours
• Reduced parts misorders.

You may ask, how does Enigma 3C so dramatically reduce the cost of producing a catalog? The answer is, by making it easy for companies like Goodrich to bring the process of catalog production and updates back inhouse, rather than compiling and sending raw information to a third party catalog producer. The Enigma 3C administration environment lets users point and click to update the parts catalog with new parts data, drawings and service information.

Surely, these things help the bottom line. The more effectively an OEM can provide real-time access to updated parts and service information, the more effectively it can sell parts—and make money. This validates what we’ve said over and over: a company’s aftermarket division is critical to its revenue and profit scheme. While the profit margin on product sales is generally shrinking, the margin on aftermarket remains steady, if not growing. The aftermarket accounts for 20-50% of revenue opportunity but about 60% of bottom line profitability. Perhaps it’s time more OEMs started getting serious about improving aftermarket business processes.

We encourage you to read our Goodrich case study.