As people look to make the most of their existing resources, they are opting to repair or refurbish products rather than buy new. Euromonitor’s International Voice of the Consumer: Sustainability Survey found that 24% of global consumers buy secondhand products to lead a more sustainable life, while 41% choose to repair broken items instead of buying new ones. This applies across a broad range of sectors—everything from washing machines to automotive parts to garden machinery.
However, the distribution supply chain for these spare parts faces several key challenges.
1. Accessing reliable, historical fulfilment data
One of the primary issues is the difficulty in accessing reliable historical data. Many businesses in this spare parts distribution space have grown through acquisitions, which has led to multiple back-end systems and duplicated data across various locations. As a result, they struggle to create a single source of truth for their historical order data. This is particularly important as legislation across Europe mandates the retention of several years’ worth of order data for things like refunds.
2. Complex procurement channels
Additionally, businesses must navigate an increasingly complex landscape of procurement channels. Whether it’s third-party logistics providers, just-in-time delivery networks, or direct to the manufacturer, the need to aggregate data from these diverse sources is crucial. However, legacy systems are still holding back many many businesses. These systems prevent them from having consistent and up-to-date inventory data when it comes time to make a purchase. This lack of visibility makes it difficult to know where an order is or if it can be fulfilled, especially when working with multiple fulfilment options.
3. Costly intervention
The inability to provide accurate order and inventory data results in significant manual intervention. For example, customers may need to call in to ask where their order is, or orders may need to be cancelled due to unfulfilled promises. These situations incur costs—around $3 to $4 per call to a contact centre.
From a customer experience standpoint, this becomes a major issue: if a customer needs a product urgently but cannot get clear visibility on delivery, they’re likely to cancel the order and look elsewhere. Improving both inventory and order visibility to guarantee reliable fulfilment and avoid losing customers.
Additionally, there are other cost factors at play, such as the high cost of failed deliveries, especially when it comes to overseas fulfilment and address verification. For example, the cost of a failed delivery can be as much as £17 per order, further impacting profitability. For many, these additional expenses eat into margins and complicate the fulfilment process, making it more difficult to scale operations efficiently.
Letting go of legacy tech
Legacy tech can’t keep up with the rapid growth faced by the automotive spare parts industry. Spare part manufacturers, dealers, original equipment manufacturers (OEMs), and distributors, require advanced technology that provides accurate, scalable inventory visibility. With an Order Management System (OMS), customers can access near real-time inventory data across all locations, offering a reliable source for stock information that is consistently up to date.
Streamlining access to order data in this way can improve customer experience and satisfaction by providing customers with accurate delivery promises based on live sourcing decisions – even before they place their orders. With automated processes, end users can also manage complex orders with workflows for large orders and recurring costs, reducing operational costs. Providing support for non-standard SKUs means customers can manage technical bundles, bill of materials (BOMs) and non-physical inventory such as services, which improves overall visibility and management.
With the right technology, customers can also optimise fulfillment with advanced sourcing logic that helps ship from the best location every time and can incorporate network priority. This helps reduce shipping costs and drives improvements in on-time, in-full (OTIF) performance. With safety stock buffers in place to protect stock at specific locations or for specific customers, customers can also reduce overselling and decrease rates of cancelled orders, which is key for profitability.
By letting go of process-based solutions, companies across the spare parts distributors supply chain can automate their operations and boost the bottom line.
- Collaboration & Optimization
- Sourcing & Procurement
