Industrial Spare Parts Industry Under Pressure | Supply chains have experienced one of the most unpredictable and uncertain periods in history this past year. Many industries have been affected by COVID-19’s effects, but the most affected sectors have seen a dramatic increase in demand, which has forced them to rethink their business models. Businesses must be innovative and resilient to win the supply-demand battle. This is achieved by strategizing and optimizing their operations.
The ability to grow and adapt as a business is crucial for survival, but it also helps build the competitive edge and resilience necessary to succeed. We will be focusing on the market for industrial spare parts. We will examine the impact COVID-19 had on this market and the market trends that we need to assess, and the innovative solutions that pave the way for business innovation in times of uncertainty.
Warehouse Location and Footprint
Local warehouses are increasingly becoming more expensive when viewed through the lens of urbanization. There is also less land available for fulfilment facilities, trying to be closer to their customers.
More companies are looking to invest in small systems that can be accessed quickly and have high capacity. These systems are designed to maximize the use of space and minimize land footprints. They also optimize operations by being closer to consumers.
The Trends and Challenges in Industrial Spare Parts
The supply chain is greatly affected by the significant challenges faced by the industrial spare parts sector. The first is the issue with service levels. This refers to the expectation of end-users to receive what they need – such as an industrial part that is critical for their business – in a short time frame. Companies that need spare parts are vital. Without them, they can suffer financial and other consequences. If a mining truck breaks down and requires urgent repairs, every second it is not moving represents thousands of dollars in lost productivity.
Although industrial spare parts emergencies are not uncommon, consumers and SMEs are now being asked to provide higher service levels to fulfil non-emergency orders within the required timeframes. New models and technologies release tens of thousands more spare parts, which means that warehouses are looking for ways to increase their storage density.
This scenario is also changing because of globalization. Offshoring is an essential effect of globalization because most local businesses don’t have local manufacturing. As we have to wait for manufacturing and freight openings, this has caused many delays in the lean supply chains.
Service levels in the industrial spare part industry can be affected by more than COVID-19. Political turmoil, industrial actions and even lousy weather all have an impact on service levels. This is combined with consumer expectations for shorter delivery times and lower prices, and the industry could be stretched to its limit more about shop.oem-automation.com
These disruptions in the supply chain are what can lead to behaviour changes.