Unlock Growth with Industrial Aftermarket Services

Industrial OEMs, traditionally rooted in hardware sales, are increasingly recognizing the immense value in expanding their service offerings. This strategic shift is driven by a desire to improve long-term customer profitability, build a more resilient business model and capture greater value from a product’s life cycle. This move also aligns powerfully with global sustainability goals, particularly within Europe, by extending product lifespans and supporting circular economy models.

By embracing comprehensive aftermarket services, companies can unlock new revenue streams, foster deeper customer relationships, and enhance their overall market position. This article outlines the key drivers behind this shift and demonstrates how outsourced aftermarket services can empower your organization to deliver world-class service experiences.

What Are Industrial Aftermarket Services?

Industrial aftermarket services refer to the support provided after the initial sale of a product. These include repair, refurbishment, replacement parts, preventative maintenance, diagnostics and end-of-life support. For OEMs, aftermarket services extend the customer relationship beyond the point of sale, enabling a more consistent revenue stream and deeper brand loyalty.

Why Industrial Companies are Expanding Services

The shift toward industrial aftermarket services in the Industrial sector is not merely a trend; it’s a strategic imperative fueled by compelling financial and operational advantages. It also offers a powerful platform to deeply understand and engage with customers.

Create Greater Value and Profitability

Services often boast significantly higher margins than new unit sales. According to McKinsey & Company, service margins are often at least double than the margins on new units. This substantial difference makes services a highly attractive area for revenue and profit growth, especially in an economic climate where capital investments may be deferred.

Further, OEMs can bolster hardware sales through consistent revenue from selling parts, such as consumable components. Industrial OEMs can leverage their installed base of equipment to sell more replacement parts, consumables, and upgrades. By offering comprehensive service plans, preventative maintenance, and readily available parts, OEMs can ensure a steady stream of recurring revenue long after the initial product sale, maximizing the lifetime value of each customer relationship.

Enhance Customer Experience

Servicing existing hardware allows companies to create ongoing value for customers beyond the initial point of sale. Taking ownership of the service experience brings an OEM’s team closer to the customer and end markets, fostering a deeper understanding of how the products are used and the challenges customers face. This proximity enables quicker response times to issues, potentially reducing downtime for their customers.

By ensuring a cohesive, end-to-end brand experience that extends far beyond the purchase, OEMs can cultivate enhanced customer loyalty, in addition to securing long-term service contracts.

Build Business Resilience

A robust service arm is a critical factor in fortifying Industrial businesses against market fluctuations. Service revenue streams are generally less sensitive to swings in customer purchasing behavior or shifting economic landscapes. This provides more predictable and long-term financial stability. It also provides less capital-intensive diversification of revenue, benefitting both the P&L and the balance sheet.

Furthermore, extending asset life through effective servicing contributes significantly to sustainability goals by reducing the OEM’s environmental impact. This aligns with stringent directives and the increasing consumer and governmental demand for more circular business practices. As such, this enables companies to meet evolving ESG (Environmental, Social, and Governance) reporting requirements, potentially saving on energy costs and building brand affinity in parallel.

How Outsourced Aftermarket Services Enable Servicing Strategy

While the benefits of expanding into aftermarket services are clear, building out these capabilities internally can be a significant undertaking. This is where strategic partnerships with Electronic Manufacturing Services (EMS) companies, such as Plexus, become invaluable. Outsourced aftermarket services can provide the expertise, infrastructure and global reach needed to scale your service offerings efficiently and effectively.

Expertise in Complex Mechatronics Repair

Contract manufacturers possess specialized expertise and advanced tools required to keep products in the market longer. This is enabled through complex electronic repair, refurbishment, or rebuilding of assets.

At Plexus, our facilities feature large form factor handling capabilities, advanced diagnostic and test equipment integrated with ESD-safe workstations. Projects are staffed by certified & highly skilled technicians. Our dedicated Failure Analysis Lab is equipped to conduct fast, accurate investigations of problems. Issues can be diagnosed at the component, printed circuit board, subassembly and system levels. This results in improved, timely repair turnaround to reinforce your service dedication to your end customers.

Plexus is committed to providing the highest level of services to our Industrial customers, backed by our comprehensive experience and ISO9001 Quality certifications. Our adherence to rigorous standards ensures the highest quality in every service we deliver.

Comprehensive Parts Management and Logistics Services

Aftermarket services partners can offer the tools and logistics services necessary to empower your field teams to deliver exceptional service experiences. Working with a partner to manage parts inventory and deployment means your business can dedicate greater resources to customer engagement.

Plexus provides critical support in service parts planning and inventory management, ensuring the right parts are available at the right time. Plexus can also facilitate field repair unit kitting and deployment to enable teams with turnkey service tools.

Parts management and logistics are delivered through Plexus’ global locations, empowering your teams to provide timely response to your customers across the world. Our significant footprint also serves to reduce logistics costs and carbon footprint, and decrease response times. With robust teams in locations across North America, Europe and Asia, Plexus can facilitate aftermarket logistics solutions wherever service is taking place.

Connect with Plexus to Grow Your Aftermarket Services Engine

Building a robust aftermarket service business can be a transformative step for Industrial OEMs. It can unlock new revenue streams, drive higher margins and cultivate greater customer loyalty.

To build a successful service business, collaborating with an outsourced aftermarket services provider like Plexus can be a decisive advantage. We enable your teams through technical support, strategic logistics planning and efficient inventory deployment, allowing your OEM teams to concentrate on their core mission of serving the customer. This helps to protect your bottom line and your brand.