Serving the Automotive Aftermarket

GXS has B2B solutions to help any automotive company, no matter what their size or where they may be located in the automotive value chain.  A typical representation of the automotive value chain is shown below. But what happens when the customer picks up their new car and six months down the line they need their car serviced or require a replacement part to be fitted.  Is the supply chain in the aftermarket sector radically different to the one used up until a new car arrives in a showroom?

Last year GXS worked with a Japanese company to implement an aftermarket parts visibility solution to help them manage their spare parts shipments to their dealer network around the world.  This implementation, based on GXS’ Logistics Visibility solution was implemented to allow them to trace the shipment of spare parts as they made their way between their factory in Japan and, in the initial part of the project, to their dealer network in North America.  As with many automotive dealers, this company has their own dealer management system and GXS’ Logistics Visibility solution was fully integrated to their web based platform to provide a single, seamless environment for improving the distribution of spare parts across their dealer network. The diagram below could almost apply to any automotive OEM looking to improve their aftermarket B2B infrastructure.

In addition to improving the visibility of PO transactions, this implementation also allowed this company to monitor the efficiency of their third party logistics providers.  GXS, through the Logistics Visibility solution, is linked to nearly 80% of the global freight carriers, in addition GXS has direct links with many government cross border and customs facilities around the world.  The most significant benefit obtained and one which every company strives to improve, is customer satisfaction.  They are now able to respond more quickly to dealer requests for spare parts and at the same time, they are able to realise better cost control by optimising their usage of carriers.

The research analyst AMR recently defined this aftermarket supply chain activity as Service Lifecycle Management and it is an area that many companies, especially in the automotive and high tech sectors are looking to improve.  Provision of spare parts is a big business in itself and it was estimated last year that GM made more profit on $9billion of aftermarket related spares sales than they did on $150billion of OEM car sales. The service parts business becomes more important for products or projects that are expected to stay in service for a long period of time.

For example in the UK the Defence Logistics Organisation is solely responsible for the distribution of spare parts to the British Army, Royal Navy and Royal Airforce. The DLO provides a crucial service, making sure that spare parts get shipped anywhere in the world, anytime of day and they have to provide this spare parts replemishment service for the  entire life of the jet fighter, tank or warship, which could be anything up to 30 years.

Increased globalisation of the automotive industry is putting more pressure on the car manufacturers to improve their aftermarket supply networks and I will be taking a closer look at this sector over the coming weeks to see how GXS can help more companies, such as the Japanese  manufacturer highlighted above, to improve their aftermarket / service part area of their business.