Smith Market Blog

The Growth of Aftermarket Services


At Smith, one of the many phenomena we've seen recently, as we exit the global recession, is the growth in aftermarket services (AMS).  This week, Manufacturing Market Insider (MMI) released it's September issue with the headline article focusing on just this phenomenon, 'Aftermarket Services Gaining More Respect.'


In their article, MMI reviews the recent diversification strategies by some of the leading EMS companies (and a few smaller ones too) to provide AMS in addition to their traditional services.  AMS has long been a critical component of product lifecycle management in our industry; being able to source and provide top quality obsolescing, end of life (EOL), and/or aftermarket (AM) parts and services requires significant market, product and component knowledge and agility.

The AMS sector has quietly thrived, now reaching roughly US $200billion, according to Jabil market research, as reported in the MMI article.  Understanding the importance of product lifecycle and inventory management is critical to being able to provide the type of reliable services that is necessary in the AMS sector. 

As many of the larger EMS companies begin to diversify offerings in search of greater market reach and revenue hedges, the question remains, as also raised by MMI, will they be able to handle the inventory and parts management necessary?  This is a very real question.  As is the question of having the requisite labs for screening and testing parts to ensure that quality is not compromised (i.e., timely non-conforming and counterfeit part identification and proper destruction) (cf. our recent and our upcoming MarketWatch Quarterly article on anti-counterfeiting, subscription is free).

Being able to forecast and manage inventory for aftermarket parts requires significant market analytics and diverse procurement knowledge in addition to supply chain, hubbing and cost management strategies.  These capabilities come from experience and dedicated, expert teams constantly monitoring and working in a wide range of parts and agile supply chains.

At Smith, we have played a central role in the AMS space for many years.  We built our reputation on the ability to provide essential supply chain strategies (end-to-end) for products and components, in addition to the ability to source 'just-in-time' parts, regardless of lifespan, while being cost aware.  Our Commodity Experts are market experts in supply sources, market values, and customer base.  Smith's team of Commodity Managers is dedicated to assisting clients in the full range of supply chain strategies, with particular strength and track records in successful aftermarket services (AMS).

Managing component lifecycles is a long-standing requirement for succeeding in the electronics industry.  It is interesting that there is a recent surge in the number of new entries to this critical market.  At Smith, we've been in this market for over 25 years and continue to provide industry leading strategies, services, and top-quality parts, especially in the AMS sector.

Lisa Ann Cairns, Ph.D.
Written on Thursday, 30 September 2010 09:34 by Lisa Ann Cairns, Ph.D.

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