A journey into aftermarket logistics: supply chain challenges and resilient solutions

Pitfalls that challenge the industry

Demand forecasting uncertainties – One of the primary challenges in aftermarket supply chain management is unpredictable demand. Unlike new goods, demand for spare parts is often influenced by unexpected events such as equipment breakdowns, accidents, or unforeseen market dynamics. Accurate demand forecasting becomes critical to avoid excess inventory or stockouts, along with unwanted extra costs.  

Ageing Inventory – As products age, the challenge of managing obsolete inventory rises consistently. Technological advancements and product lifecycles create a scenario where spare parts can become obsolete faster than anticipated. Balancing the need to maintain a comprehensive inventory with the risk of obsolescence is a constant struggle. 

Global supply chain disruptions – The aftermarket supply chain is not immune to global disruptions, be it natural disasters, geopolitical events, or health crises. A disruption in the supply chain, even in an apparently distant part of the world, can have a domino effect, leading to delays in sourcing critical spare parts. 

Aftermarket supply chain success: where to start

1. Advanced analytics and predictive modelling

To tackle the challenge of demand forecasting uncertainties, aftermarket logistics providers are exploring advanced analytics and predictive modelling, such as intermittent demand combination forecasting method (IDCF). By harnessing the power of data, organisations can identify patterns, anticipate demand fluctuations, and optimise inventory levels at scale. 

2. Responsive inventory management

Addressing the issue of ageing and obsolete inventory requires a dynamic inventory management approach. Implementing intelligent systems that continuously assess spare parts and adjust stock levels accordingly helps in mitigating the risk of holding obsolete inventory. You could consider Just-in-Time (JIT) inventory, as a management strategy aimed at reducing excess inventory and achieving a streamlined supply chain, or Vendor Managed Inventory (VMI), an optimised inventory strategy that aims at enabling suppliers to actively suggest orders based on shared stock data. 

3. Diversification and regionalisation

To enhance resilience in the face of global supply chain disruptions, diversification and regionalisation have become key strategies. According to Gartner, since 2022 74% of supply chain leaders made changes to size and number of locations in their supply chain network. By establishing multiple distribution centres across different regions, organisations can reduce dependency on a single source and better navigate disruptions, while also making their distribution processes more sustainable and localised. 

4. Collaboration and visibility

Closer collaboration with suppliers, manufacturers, and logistics partners enables real-time visibility into the entire supply chain. On the other hand, transparency facilitates quicker responses to disruptions and fosters a more agile and interconnected aftermarket ecosystem. From building trust to sharing effective technology, the value of integration is not only cost-effective but also represents the foundation of improved resilience. 

5. Embracing Technology

The integration of cutting-edge technologies such as IoT, blockchain, and AI is revolutionising aftermarket logistics. IoT-enabled devices provide real-time tracking and monitoring of spare parts, while blockchain ensures the integrity of the supply chain. AI assists in optimising routes, predicting maintenance needs, and enhancing overall operational efficiency. Forbes reports that that by 2026, 55% of G2000 OEMs service supply chains will rely on AI to make sure the right spare parts are available and positioned to solve 75% of issues before failure. 

In the ever-evolving landscape of aftermarket supply chain management, challenges are inevitable. However, the industry’s resilience lies in its ability to adapt and innovate. By embracing advanced technologies, fostering collaboration, and implementing responsive strategies, organisations can navigate the complexities of aftermarket logistics with confidence and increase their potential for significant growth. At Carousel Logistics, we go beyond providing Aftermarket logistics services. We are a value-driven partner committed to creating flexible, fully tailored solutions that boost efficiency and ensure your business continuity through a seamless flow of spare parts despite the challenges ahead.