With much of the world in recession, industries that rely on capital equipment—like oil & gas, aviation and construction—are buying less new equipment these days. As OEMs sell fewer new units, they have shifted their focus to selling more spare parts.
OEMs are seizing this opportunity because profit margins on aftermarket parts and service are higher than on new equipment. Typically, parts and service make up only 25% of an organization’s total revenue, but they often represent as much as 75% of profit.
The problem is that most of these companies capture less than half of their potential aftermarket parts and service business. Many businesses are using inefficient manual processes to manage thousands of parts and the related maintenance and repair information. For example, customers must often call the OEM to figure out the right part number(s) and pricing, which can take as much as 45 minutes. As if this isn’t bad enough, the customer must then enter this information onto the proper form and fax it back to the OEM, where it is re-entered into the order management system.
Such a cumbersome process leads to misorders, shipping errors, inventory problems and delays that ultimately increases equipment downtime. It also means higher staffing costs for both the OEM and the customer.
What does it take to address these issues? An accurate and up-to-date electronic parts catalog, such as Enigma InService EPC, which (1) simplifies part identification; (2) provides relevant service data; and (3) integrates with e-commerce systems like Oracle, SAP and IBM.
In a typical scenario, customers use InService EPC to quickly identify the correct parts/kits and specific quantities. Items to be ordered are added to a pick list and passed, through a SOAP-based interface, to the order management system, which validates, submits, schedules and tracks the order for fulfillment. Integration between the parts catalog and e-commerce systems reduces the cost of ownership and improves ROI for the manufacturer. It also enhances the customer’s experience, which has been proven to increase aftermarket part sales.
Enigma InService EPC extends the OEM’s IT enterprise—from product development through complete aftermarket support. By providing open, standards-based interfaces, Enigma makes enterprise integration simple, so that companies can meet today’s challenges and tomorrow’s opportunities.