Trends & Insights

4 Key Trends in Managing the After-Sales Supply Chain

By Victor Romero - November 09, 2017

For smartphone and consumer electronics brands, a well-planned after-sales supply chain is essential to reduce costs across the entire customer care ecosystem and ensuring customer satisfaction. Innovation is a key part of any state-of-the-art supply chain strategy. Brands need to find new ways to deliver after-sales service faster and better. Gaps in the supply chain and spare parts distribution have a massive negative impact on service quality and customer experience.

With its same-day delivery service, Amazon has raised the bar. The e-commerce giant even fulfills orders in some cities within a one-hour timeframe. After-sales services cannot fall behind. However, according to our global Smartphone & IoT Consumer Trends study, the average waiting time for a smartphone repair is up to three weeks, whereas customers would like to have their device back within 24 hours. This is also a failure in supply chain management, which is still not operating with efficient processes and the latest tools in many areas. What positive impulses can current trends set? We looked at four areas and provide a forecast for 2018.

1. Cloud-based Infrastructure Improves Information Exchange

With a strong increase in the amount of complex tasks and the immense volume of data in the after-sales supply chain that comes with it, manufacturers, retailers, suppliers and service providers are relying on flexible cloud-based technology platforms, which can be adapted to new requirements more quickly. According to Gartner, cloud computing has a potentially significant impact on all aspects of IT and on how users access applications, information and business services.

Modern after-sales management applications provide convenient and location-independent access to a wealth of information. On the one hand, cost advantages result from lower investment needs, meaning that less capital is tied up. Furthermore, peaks in demand can be easily maintained given the possibilities of cloud computing, especially in the event of strongly fluctuating demand, as is often the case in the after-sales supply chain area.

2. Connected After-Sales Supply Chain with Industry 4.0

Based on the high-tech strategy of Industry 4.0, what should lead to an optimization of the entire supply chain of a device manufacturer can also be seamlessly transferred to the after-sales area. The goal of Industry 4.0 is to interlink all production and logistics processes based on modern information and communication technology. Through the intelligent and digitally connected systems coming from this technology, as well as direct communication between people, machine, logistics and product, it is possible to have self-organizing supply chains – from development through to production, from use and support right through to recycling.

By working with the Internet of Things and big data analysis, digital supply chains should become more agile and adaptable, as well as be geared towards customer requirements. With regard to the after-sales supply chain, Industry 4.0 enables highly flexible serial production and shorter production times, which in turn lead to better spare parts supply and higher service quality.

3. Next-Shoring Moves the After-Sales Supply Chain to the Customer

In the past, device manufacturers outsourced production to low-wage countries to reduce manufacturing costs. With rising wages in what were low-wage countries and the increasing purchasing power in these countries, there is a movement away from offshoring and re-shoring (a term that describes the relocation back to developed countries) towards next-shoring. Next-shoring describes the necessity of introducing innovations where there is a need. Key elements of a next-shoring strategy include diverse and adaptable production sites, innovation-oriented collaboration with partners, and a new focus on customer experience.

It is therefore not hard to imagine that production, which up until now has been carried out in low-wage countries due to financial reasons, will be relocated to where the customer demand really is. This would lead to an improved spare parts supply and a shortening of the after-sales supply chain, since this would now be decentralized in remote regions. For customers, this could mean that the service quality would be significantly improved by having shorter delivery times and more flexibility.

4. Solid Master Data Management Lays the Foundation

Master data management ensures that a company’s data quality is coherent, accurate, allocable and consistent. The focus is on the long-term data quality and consistency of all information regarding products, customers and suppliers. In many cases, the company’s master data is kept redundant in several databases. This makes data analysis extremely time-consuming. Inaccurate or completely incorrect data costs a lot of money, and an increasing customer care network means there is a greater flood of information.

In times of rising customer expectations, after-sales organizations must be in the position to respond quickly to customer demand. In addition to real-time analysis, modern master data solutions connect sales, production and supply chain. It is only when these areas are carefully coordinated with each other that it is possible to respond quickly to customer needs – and by doing so, the quality of service will significantly increase and the customer experience improve.


Trends & Insights

About the Author

Victor Romero

Victor Romero is Supply Chain Manager at B2X.