Big Data for a big industry

“You don’t know what you don’t know.” We’ve all heard that one a few times. “What you don’t know” causes the aftermarket to rely on historical sales data, limited access to POS data and assumptions to accurately forecast product demand. Thanks to the Internet, Web, mobile applications and social media, there is more data available than ever.  This is beginning to remove some of the guess work from predicting behavior and future needs. The challenge is in managing these large data sets for strategic purposes.

This is Big Data.

Interested in more technology news? Sign up for our new Aftermarket IT newsletter by clicking here!

Big Data is an increasingly used term to describe the collection, aggregation, analysis, reporting and visualization of data - both structured and unstructured - for the use of planning, forecasting, meeting customer needs and overall business intelligence.

Even though Big Data is still a little ambiguous to some and misunderstood by others, its use could help suppliers improve their abilities to plan raw material purchases, production schedules - especially when balancing production runs of OE and aftermarket parts on the same lines - and inventory levels. Benefits can include improved fill rates, fewer returns and reduced production costs.

Data types that would feed a Big Data business analysis in the aftermarket might include sales history, weather patterns, customer survey results, raw material pricing, online forum chatter, social media ‘noise,’ VIO data, POS data, and vehicle application and product attribute data. However, there could be numerous other types, depending on a manufacturer’s product types, go-to-market strategies and ability to capture down channel activities.

Business intelligence generated by proper analysis of data could have a huge impact on the aftermarket, considering the amount of inventory in play and the overall size of the industry.

The AASA Technology Council (ATC) wanted to identify the importance aftermarket suppliers are placing on Big Data, so it included questions on the topic in its 2012 Spend & Trends Survey. “Enhancing Big Data/BI/decision-support system” was selected as one of the top IT initiatives, with 61 percent of the survey respondents indicating it was on their 2012 project list.  When asked to identify the most important project of 2012, it was ranked second, behind only “deploy or upgrade ERP system.”

Furthermore, Big Data was the second highest area for new aftermarket IT spending in 2012, according to respondents. It was also projected to experience the third highest increase in spending in 2013, behind only server virtualization and ERP systems.

Results from the IT Spend & Trends Survey overwhelmingly indicate that Big Data is receiving increasing levels of focus and support among aftermarket suppliers. This means that suppliers recognize the potential Big Data represents for improving how they determine what, how many and when to produce.

There are questions and challenges that must be addressed, such as collecting the proper data and having data analytics capabilities in-house. These and other Big Data topics will be covered in future columns. For now it is safe to say that some form of data analytics - whether it is referenced as Big Data or another trendy name - will be imperative to competing in the future aftermarket.

The ATC will address Big Data during its upcoming Spring Meeting, which will be held March 15 at the Hyatt Regency O’Hare in Rosemont, Ill. Topics include Big Data Provides Real Value for B2C and B2B; and Transforming Customer Listening - CRM and its Role in Big Data. Visit www.aasatechnology.org for more details on the meeting.

About the Author

Chris Gardner is vice president, programs and member services, for the Automotive Aftermarket Suppliers Association (AASA). He is the executive director of the AASA Technology Council (ATC), which provides leadership and a forum for technology leaders from supplier companies to exchange best practices, identify leading technology trends and address technology issues in the aftermarket.