The auto industry is experiencing a renaissance: recent news reports reveal the sector may realize growth in new vehicle sales not seen since 2001. As more cars are purchased by consumers, automakers plan to take advantage of their investments in Big Data and analytics to enhance their businesses for competitive advantage.
Focusing their efforts initially on customer experience and vehicle innovation, they plan to integrate richer data analysis for better decision-making. After all, that’s been the promise of Big Data from the beginning. Supply chains, in particular, will benefit from this business development in the long term, once the data is available and can be incorporated into operational strategy.
But what does this push into Big Data mean for the expansive automotive aftermarket?
With small margins, productivity pressures and faster inventory turn requirements, wholesale distributors in the automotive aftermarket need greater insights into automotive research and development more than ever.
From changing part lifecycles to innovations on the horizon – like hybrid and electric cars – they will need a clearer vision on automotive trends for a true competitive advantage. Rather than seeing industry patterns in their rearview mirrors, savvy distributors can begin to plan their futures – selling innovative parts that transform the aftermarket arena.
Here’s how they can capitalize on Big Data:
1) Leverage an integrated system capable of connecting data across all operations for richer analytics and improved visibility, affecting inventory outcomes for supply, sales and service networks.
To realize the promise of Big Data, distributors need to use analytics to maintain a keen eye on inter-relationships of orders, i.e. different products that are offered together. Knowing when items need to be replaced, even if from different vendors, is paramount. Furthermore, analytics help aftermarket companies assess which parts to prioritize and purchase to extend the lives of used cars, making them relevant and appealing when compared to newer models.
2) Enforce accurate warehouse routines and procurement.
While the automotive aftermarket has a history of being reactive, Big Data can change that. It can help them gain insights to reduce inventories and take a more proactive approach to the market. An electronic parts catalog and integrated electronic data interchange (EDI) can help automate and track orders through a supply chain to the customer level, improving customer satisfaction and helping buyers understand shifts in the market earlier in the process to adjust purchasing decisions accordingly.
3) Capture product-lifecycle information essential to achieving profitable re-manufacturing and post-sale service offerings.
Market realities require innovation beyond what major manufacturers will put into a given product. If distributors use Big Data to apply this principle across all products, then they will position themselves and their brands for strong growth. They will derive the return on investment on their research and profitability much more quickly when they can tap into customer vehicle preferences more readily.
Big Data doesn’t have to be an intimidator. Beyond its immediate impact on the big players within the automotive industry, automotive aftermarket stakeholders can position themselves for success if they can leverage the new ways data will be available from customers on the road. Big Data can be the lever that drives strategic thought and action across the industry. The future of transportation depends on it – and smart companies will be sure they don’t get left in the dust.
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