Capturing the aftermarket in engineering organizations: opportunities and challenges

Abstract

The provision of additional services to accompany the sale of products is increasingly central to the business strategies of companies in manufacturing and engineering, often referred to as aftermarket services (AMS). The purpose of this paper is to explore the experience of expanding AMS in the context of a leading organization in the engineering sector. The paper explores the meaning of – and rationale for - AMS provision and the manifestations of aftermarket service offerings. AMS enthusiasts envisage an array of benefits including: higher margins, better exploitation of an installed asset base and smoother revenue streams. However, the paper reveals that whilst organizations may find lifecycle AMS attractive, the transition to becoming an integrated provider of product and AMS is likely to be more complex than much of the extant literature suggests.