Reach you do not own.
Reach you do not own.
An OEM loses an aftermarket order most often for a reason that has nothing to do with the order. At a global industrial equipment manufacturer, on the two things customers said they cared about most, the client was behind the alternatives on both. On quality it won comfortably.
The customer bought elsewhere anyway. Not because quality had stopped mattering, but because a part that arrives five months late has no quality; it has an absence.
This is the shape of the reach problem, and it is the one gap where OEMs are structurally disadvantaged rather than merely disorganised.
Where the van is parked
Independent service providers against OEM service organisations.
The arithmetic of building your own reach
The instinctive OEM response is to build: more service centres, more field engineers, more forward stock. Sometimes that is right. Usually the arithmetic quietly defeats it.
A large mining OEM we studied had customers 200 to 500 kilometres from the nearest distribution centre and a catalogue of more than 250,000 parts, of which any given dealer could physically stock 5–10%. Backorders followed automatically, accounting for 15–25% of orders, in an industry where equipment failure costs the customer around $130,000 an hour.
You cannot stock your way out of that. What that OEM did instead was restructure the network into master and regional distribution centres.
What a build-led strategy actually returns
Before and after a two-tier hub restructure.
| Measure | Before | After | Change |
|---|---|---|---|
| Parts lead time | 5–7 days | < 1 day | −85% |
| Parts availability | 75–80% | 98% | +20pp |
| Daily parts shipping value | $1.5m | $4.0m | +167% |
The answer is usually already inside the company
Before recommending anyone buy reach, it is worth checking whether a region has already solved it.
In the marine business above, two markets had. In China, local teams had cut the severity of the three worst process bottlenecks by 60%, 25% and 40%, saving between one and a half and three hours per deal. In India, sales-process automation had cut bottleneck severity by a further 15%. Neither fix came from headquarters. Neither had been documented, costed or transferred. Both were treated as local workarounds rather than as the company's own answer to its own most expensive problem.
The most common form of aftermarket reach an OEM already owns is a working solution in one region that has never been given a name.
Partnership fails on measurement, not on strategy
When OEMs do go external, the strategic logic is usually sound and the execution collapses in the same place every time: nobody has defined what good partner performance is.
We scoped a service partnership for a global aggregates equipment manufacturer that wanted coverage it could not economically build. The work that mattered was not finding the partner. It was structuring a €15 million-plus service market into something a partner could be held to, defining six partner performance KPIs, and validating one pilot partner ready for launch before anything was signed.
Six KPIs sounds like a modest deliverable. It is the entire deliverable. A partner agreement without agreed performance measures is a distribution agreement with optimistic language, and it degrades in a predictable direction, the partner optimises for parts margin, the OEM optimises for volume, and the customer experience nobody is measuring is the one that decays.
We saw the endpoint of that decay in a distributor return study at a minerals equipment manufacturer. Distributors requesting returns were seeing only about 17–20% of requested items approved, on requests worth over a million dollars, because approval depended on the OEM's own stock position rather than on any published rule. From the distributor's side this is indistinguishable from arbitrariness, and a partner who cannot predict your behaviour will hedge against you rather than sell for you. Modelled properly, a published policy with a 10% returnability cap and a 10% restocking fee broke even at roughly 0.4% replenishment. What was missing was not margin. It was a rule.
Three routes to reach you do not own
Rent it, teach it, or fix the signal first
Three models that recur across our channel work, and when each one fits.
What this series adds up to
Three gaps, in the order they have to be closed.
You cannot sell to an installed base you cannot see, and most OEMs hold an asset register where they need a demand forecast. You cannot capture what your own commercial model gives away, service delivered inside a product price, agreements customers say they were never offered, an attachment rate decided in a room the service business is not in. And you cannot serve what you cannot reach, which for almost every OEM means partners, and therefore means partner performance measurement.
None of the three is a technology problem. All three are ownership problems. The installed base belongs to nobody, service margin is an allocation rather than a fact, and partner performance is a relationship rather than a metric.
Which is the argument for putting the aftermarket under one accountable executive with its own P&L, not as a growth initiative, but as a governance correction. That is the next thing we are writing about.
SprintlyWorks runs eight-to-ten week sprints for industrial OEMs on installed base visibility, aftermarket capture and service channel design. The partner KPI set and the returns model described above were built inside client engagements, and handed over with them.
This completes the three-part series on aftermarket and installed base.
