Designing an Eco-Friendly Aftermarket Network

Manufacturers, particularly those in the automotive and industrial products industries, are devoting considerable effort to minimizing the environmental footprint of their production processes. From sourcing recyclable materials and eliminating contributions to landfills to reducing the energy usage and carbon emissions of their engines, these companies are doing more than just “talking green.”

But have you considered what happens after a finished product leaves the showroom? Over the life of an automobile or other kind of industrial equipment, parts wear out or break and have to be replaced. Sometimes, parts and products have to be returned for repair or disposal. The way you design and operate your aftermarket parts-delivery and reverse logistics networks can either extend your green strategy or dilute its effectiveness. After all, considerable carbon emissions are generated in the storage, transportation and delivery of parts to retail dealers and their customers.

The good news is that most efforts to green up the supply chain involve using resources wisely, and that's almost always attached to lower costs. With optimally designed aftermarket parts-delivery networks, industrial companies — from automakers to construction equipment manufacturers — have been able to not only cut costs and improve customer service but also reduce fuel consumption, cut greenhouse-gas emissions and minimize waste.

If you're seeking to green up your own aftermarket networks, there are four primary ways to achieve this:

1. Design a more efficient distribution network.

2. Design a More Efficient Network

   Optimize transportation modes.

3. Take the guesswork out of returns and repairs.

4. Incorporate green packaging.

Let's look a little closer at these recommendations and their contributions to green operations.

Optimize Transportation Modes

A critical first step is to take a look at your current aftermarket parts network. A basic analysis will include questions such as: How many distribution facilities do you have, and where are they located? How close are they to your retail outlets and customers? What are your service-level agreements (SLAs)? What percentage of shipments require air product versus ground in order to fulfill those SLAs?

The more miles your parts have to travel — and the greater the percentage of air transport required versus ground transport — the greater the impact of your network on fossil-fuel consumption and emissions.

With the right redesign, your aftermarket network could be simplified and the number of distribution centers reduced — all while speeding deliveries and minimizing the number of stops along the way.

Network design always involves a delicate balance between cost, speed-of-service and environmental considerations. And, it's the first step toward earth-friendly aftermarket services.