Automotive OEMs and aftermarket parts suppliers are facing
disruptions from new technologies and e-commerce. In this QAD
Precision Report we look at how OEMs and aftermarket suppliers meet
How OEMs and Aftermarket Parts Suppliers Can Manage the Challenges
Automotive original equipment manufacturers and aftermarket parts
suppliers face with two seemingly opposing trends. First is the
increasing adoption of new technologies, including but not limited to,
electric vehicles. As the electric vehicle (EV) market continues to
grow, companies will need to react to shifting aftermarket
requirements. Connected EVs, for example, could leverage predictive
intelligence to flag maintenance issues or the need for replacement
parts before a problem arises.
At the same time, people are holding on to their vehicles for longer.
In the US, the average age of cars and light trucks is
approaching 12 years. In 2002, it was 9.2 years. That’s good
news if you are in the business of supplying the parts needed to keep
What both of these trends have in common however is the influence of e-commerce.
Traditional Industries in an E-Commerce World
E-commerce shortens the distance between customer and suppliers.
However, e-commerce also connects customers with a company’s competitors.
The impact of e-commerce on traditional parts distribution has
already been felt. There has been a proliferation of online
marketplaces selling new and used auto parts. As a result, automotive
aftermarket suppliers have had to rethink their digital services.
E-commerce has not just changed how we shop, but our expectations
too. This means that OEMs and aftermarket suppliers need to act like
retailers and ensure efficient customer service, including prompt
delivery of online orders. Companies have responded to these
expectations by increasing the number of express shipments that they
send. This can be a challenge for businesses that relied mainly on
large freight shipments.
While some car owners will always choose original parts, and be
prepared to wait for them, many will opt for generics if the price and
delivery options make this a more compelling offer.
These challenges have led many transportation and logistics managers,
as well IT teams, at OEM manufacturers to search for solutions to
simplify their shipping operations.
Some companies opt to cobble together a solution to manage their
shipping needs by customizing their existing ERP or transportation
management solutions. However, maintaining these kinds of ad hoc
solutions can be expensive as well as inefficient. That’s why finding
a solution that meets all these needs should be a high priority.
OEMs and aftermarket parts suppliers are not just sending more
express and parcel shipments — they are sending them to an increasing
number of places too. The automotive industry has become increasingly
global in nature. Over the last decade, car sales in the BRIC
countries grew from 30 percent to 60 percent of the global automotive profits.
For OEMs and aftermarket parts suppliers, the trend toward
globalization means that a shipment of parts may be bound for anyplace
in the world. This impacts which carrier you use and where you use
them. You might choose one of the large global carriers to ship
parcels globally, or you might be using a smaller, regionally based
carrier that serves more specialized markets. A mix of global,
regional and local carriers gives companies more delivery options,
with different services, lanes, and capabilities.
Having said that, with so many carriers to choose from across the
globe, manually researching and selecting carriers or building a
custom solution that can do it for you is costly and labor intensive.
More Shipment Variability – Size and Speed
The automotive aftermarket is worth approximately €800 billion per
year. A report
by McKinsey & Company forecasts that the auto aftermarket
will grow 3 percent annually to be worth around €1.2 trillion by 2030.
This presents a significant opportunity. This growth is giving rise to
another challenge: the increasing variability in the nature of shipments.
In the past, OEMs and aftermarket suppliers mainly sent large
shipments of parts to distributors. Distributors, in turn handled, the
logistics of moving those parts to where they were needed. But today,
as vehicles stay on the road longer, repair parts are becoming a more
significant part of your business. That means a higher volume of
shipments, more paperwork, and more pressure to keep costs down.
You still need to send large freight shipments to distributors and
dealers in major markets. But today OEMs and aftermarket suppliers
also need to send smaller numbers of parts (or hundreds of them) to
repair shops, fleet managers and individual customers who could be
located anywhere in the world.
These types of shipments are also time sensitive, since they are most
likely required to repair a vehicle that’s already broken down and
waiting for parts to arrive. This is especially true in a
Vehicle-off-Road situation: if that vehicle is revenue-generating,
every minute counts. The urgency and need for speed inherent therefore
means that express parcel shipments are going to be an increasingly
important part of your shipping business.
How QAD Precision Can Help
QAD Precision works with the world’s largest OEMs and aftermarket
parts suppliers, including two of the Top 5 manufacturers of
heavy-duty trucks. With one platform for global trade and
transportation, QAD Precision helps OEMs and aftermarket suppliers to
streamline and simplify all both domestic and international shipping.
Precision Transportation Execution is a global, multi-carrier
transportation execution solution to manage inbound and outbound
shipments across every region of the world. With QAD Precision you
seamlessly integrate into a worldwide multi carrier network. This
gives you the power of choice while still maintaining uniform shipping
procedures across your enterprise. Our solution helps you to reduce
costs and optimize delivery regardless of where your package is going.
Furthermore, our multi carrier functionality is available for any
mode of shipment, including parcel, courier, LTL, TL and Freight. As a
result, QAD Precision gives you the long-range perspective you need to
successfully consolidate shipments and plan for future optimizations,
all while controlling shipping costs.
Precision Export Management allows you to simplify export
processes, automate documentation and manage the risks associated with
cross-border trade. Our multilingual, multi currency, multi date
solution means that you will always have the right documentation,
prepared in the correct format and language to simplify your global
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