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Aftermarket 4.0 – A Manufacturer’s Perspective

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How many times have you faced the scorn of your customers because they could not return or claim warranty on your products? Have you ever wondered why, or if there was something you could do about it?

As a customer myself, I have had more bad experiences than good when it comes to product returns and warranties. I always used to think, “Why doesn’t the manufacturer want his product back? After all, it is an opportunity to resell it, understand the product failure, retain a customer and create higher brand value. But many companies trade all this for the MRP of the product — seems out of balance, doesn’t it?

But I don’t exactly blame the manufacturers because it is not that easy to quantify the benefit in a streamlined aftermarket process, a product return process, or a warranty process. On the other hand, the costs are easy to identify, but the benefits outweigh them three to one in this case.

What if there was a way to reduce the cost of returns and warranty management, and be the brand your customers love most? Wouldn’t you be the first one to grab the opportunity?

Let me introduce you to “Smart Factories”, an ongoing 4th revolution in the industry earmarked as “Industry 4.0”. Manufacturing always seems to be the first industry where optimization and profitability methodologies are created. Every business and processes in it are going to a level of automation, decentralized and intelligent decision making by machines and robots. This is not happening somewhere in the future; this is happening as we speak.Factories that can understand the objective of their operation, organize the raw materials and machinery, analyze the requirements, make in-production decisions and create the most optimized output are at this moment in use across the world.

IoT is not new, but it is a new perspective on how the information captured by objects that are interconnected is used for improving the entire system. We need a core structure that can analyze and decide on what to do with the information. This is achieved by a Cyber-Physical system that can monitor the network of IoT nodes, make a digital copy or map of the entire physical process, and make decisions that optimize the use of all the resources available in the factory. loT has not been discussed yet, so will readers know what it is?

The scope of such a system is not bound by just the confines of the factory or the manufacturing facility. The interconnected system of things (IoT) can consider the market demand in real time — the spikes and dips and the geographical distribution and many other factors — and feed this back to the system to be analyzed. The system can then decide which product, at which time, in which location must be produced at the optimum use of all the raw materials and resources. The system can extend up to any level of penetration across the value chain from the raw materials to the end consumer.

Consider the flipside, which becomes the – the current industry state that is creating great opportunities in cost reduction and revenue generation for manufacturers and other players in the value chain.  Consider a product recall or even a repair due to an isolated incident or part breakdown. Because you know the specifics of each product and where has it been dispatched, a major recall and assigning a nearby technician to resolve the broken/worn out part become easy to manage. Many lives can be saved by just knowing the condition of your product at a given time; the lack of information is what causes most accidents. Many lawsuits can be averted by just analyzing what happened to the product at the time of failure. Lives saved? What types of products are we talking about?

Assessing product quality has multiple advantages. Not only does it tell you how well your product’s performance is in the long run, it will indicate when a failure may occur, what conditions might create the failure, how much impact your product has on the environment, and the product’s total footprint.

Analysis alone is not the objective of such a system; decision making based on all the information and inferences is. Designing, prevention, and correction become that much easier with a smart factory. Industry 4.0 and Aftermarket 4.0 are only the start of what is going to be the norm for managing your business processes in all business functions and levels. It is up to you where and when to start adopting it.

Meet our AfterMarket experts at Warranty Chain Management conference, WCM 2018 in San Diego from March 6-8, Booth 11.

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