Insights on the maintenance, repair, and overhaul (MRO) and aftermarket services industries

The aftermarket services industry: A new imperative for manufacturers

Industrial manufacturers are steadily providing more aftermarket services—the broad category that includes the sale and delivery of maintenance, spare parts, and other value-added services. And the same is true in the aerospace and defense sector, where MRO primarily comprise the aftermarket services industry.

The major factors driving many manufacturers to seek new aftermarket services revenue opportunities include:

• Changes in customer demands
• Increasing market maturity
• Cyclical fluctuations in new equipment sales
• Pressure on pricing

This shift appears to be taking place as more customers are emphasizing service-level agreements that guarantee product uptime. Customers are looking for service providers who can proactively support their equipment before it is out of service—and they’re willing to pay a price premium in return.

With the massive industry disruption from the COVID-19 pandemic, manufacturers should leverage this opportunity to scale their MRO or aftermarket services capability more rapidly. As new equipment orders are affected and capital spending comes into question, aftermarket products and services will be an increasingly essential and stabilizing part of the industrial business mix, potentially helping to offset pressures on original equipment margins.

Manufacturers may take advantage of this disruption to push through long-planned changes and innovations in aftermarket strategies to change the nature of their relationship with their customer base and channels.

The rise of the aftermarket services industry

Manufacturers are increasingly offering more aftermarket services. Now more than ever, manufacturers need to understand current challenges and look for new growth opportunities. How can manufacturers position themselves for success in these uncertain times? The aftermarket services industry is an increasingly valuable part of a manufacturing business—one that’s proven to be a critical driver for stabilizing the business and ensuring consistent revenue flows during times of economic slowdown and global crises.

Here we explore key insights for manufacturers to consider as they define and execute their own aftermarket strategy:

• Why may manufacturers invest in aftermarket expansion?
• What challenges could get in manufacturers’ way?
• Where are the aftermarket services growth opportunities?
• How might digital technologies hold the key to aftermarket services success?

The rise of maintenance, repair, and overhaul services

MRO services for the aerospace and defense (A&D) sector are related to aftermarket services in industrial manufacturing for commercial, regional, general aviation, and military aircraft. And while industry dynamics for MRO slightly differ from aftermarket services in industrials, the overall trends, challenges, and digital opportunities remain largely the same.

In today’s challenging environment, A&D companies need to understand the business value and potential growth opportunities that MRO services can help provide. Here we explore insights for manufacturers to consider as they define and execute their own MRO strategy:

• Why may manufacturers invest in MRO expansion?
• What challenges could get in the manufacturers’ way?
• How might digital technologies hold the key to MRO success?

Accelerate a new wave of growth

Read our full article, Aftermarket services: Transforming manufacturing in the wake of COVID-19 pandemic, to better understand how aftermarket services are an increasingly valuable part of a manufacturing business. And learn more about how aftermarket strategies can help offset the impact of crisis on the sale of manufacturing equipment and generate new growth opportunities.