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No one wakes up excited to buy spare parts. In most industrial environments, a parts order is not an act of joy but a signal that something has failed, worn out, or is about to fail. Yet spare parts continue to be one of the most profitable and strategically important revenue streams for industrial manufacturers and service organisations.

This is the paradox at the heart of the modern service economy. The same failures that jeopardise customer uptime and brand perception are also the moments when service organisations capture their highest margins. They are challenged to reconcile revenue growth with reliability, customer trust, and long-term asset performance.

At the Parts & After Sales Business Platform 2026 – Power of 50, the panel discussion with  Sarah Ormston, Steven Cudd, Janine Harris, and Lisa Hellqvist highlighted the tension between transactional and lifecycle value, shifting customer expectations shaped by consumer e-commerce, structural bottlenecks in availability, and the need to align increasingly complex ecosystems of OEMs, distributors, and service partners. Together, they define the new frontier of spare parts leadership.

From Spare Parts to Reliability: Reframing the Value Proposition

Spare parts cannot be treated purely as transactional items if organisations want to build enduring, profitable relationships. More parts sold can indicate business growth, but it can also be a symptom of recurring breakdowns, design issues, or poor maintenance strategies.

Service leaders increasingly frame spare parts as an integral element of uptime rather than an isolated cost. Within warranty periods, manufacturers are incentivised to minimise parts consumption, as the cost is already embedded in the warranty commitment. Fewer parts used during warranty translate into higher margin protection and validation of product robustness.

Outside warranty, the focus shifts from availability to value-added support. The commercial conversation is strongest when it focuses on investment in reliability and lifecycle extension.

Organisations are also actively working to change the customer mindset, persuading buyers that spare parts and regular service are not a penalty for owning equipment but a mechanism to protect the asset, avoid unplanned downtime, and secure the expected lifecycle performance.

Service Revenue vs. Reliability: Managing Margin Without Undermining Confidence

Tension around margin, SLAs, and product performance remains unavoidable. Spare parts and service are high-margin businesses, and boards expect growth in these areas. At the same time, R&D and product management are tasked with improving product durability and reducing failures.

Organisations are responding by:

• Diversifying revenue streams beyond reactive repairs, for example through refurbishment programmes or structured maintenance kits and serviceable modules that add value without relying on failure events.
• Adapting propositions around customer needs rather than around internal structures. In some cases, this includes taking over refurbishment or maintenance activities previously handled in-house by customers, thereby creating new revenue lines while demonstrating trust and capability.
• Shifting commercial focus from parts volume to lifecycle contracts, where recurring revenue is anchored in preventive or predictive maintenance, uptime guarantees, or performance-based agreements.

However, margin pressure does not disappear. Different actors in the value chain often have misaligned priorities. OEMs protect brand and lifecycle performance, distributors chase margin and inventory turn, and service teams are measured on response time and customer satisfaction. When these priorities are not orchestrated, it can appear that growth in one area is coming at the expense of another, fuelling internal friction.

The New Bottlenecks: Expectations, Data, and the “Amazon Prime Mentality”

Customers, influenced by consumer platforms, have developed an “Amazon Prime mentality”, assuming that even bespoke, low-volume industrial components can be ordered in the afternoon and delivered by the next morning. In high-criticality sectors, this can escalate quickly from frustration to operational risk.

Most organisations can fulfil this expectation for a large proportion of their fast-moving parts. Problems arise in the remaining minority, infrequently ordered, complex, or end-of-life components that are no longer stocked locally or produced regularly. These parts are often centralised in regional or global hubs, introducing transit delays, customs complications, and supply risk.

Beyond pure logistics, additional bottlenecks include:

• Poor visibility of stock across the network, both internally and within the extended ecosystem of distributors and service partners.
• Limited use of installed base and service history data to forecast spare parts needs and pre-position inventory.
• Fragmented systems that make it hard for front-line personnel to reliably identify the correct part, especially under time pressure.
• A gap between what is technically feasible and what is commercially viable in terms of stocking breadth, emergency fulfilment, and working capital constraints.

There is wide recognition that better use of existing data could significantly reduce these bottlenecks by improving demand forecasting, enabling pre-ordering ahead of scheduled maintenance, and driving smarter stocking strategies for long-tail parts. Yet, leveraging data remains a persistent challenge across many organisations.

Warranty, SLAs, and the Gap Between Promise and Delivery

Warranty is increasingly recognised as a critical touchpoint where expectations are often mismanaged. Installers and sales teams tend to present warranty as peace of mind for a defined period, sometimes implying rapid on-site response and immediate resolution. End users, in turn, interpret this as an emergency service commitment. If something fails, someone will be there tomorrow, or sooner.

A warranty is a commitment to correct manufacturing or quality defects within a given timeframe, but typically without a guaranteed response time or 24/7 availability. Where the gap between perceived and actual entitlement is large, frustration builds quickly.

A more mature approach is:

• Clearly defining what warranty covers and what it does not at the point of sale, including realistic response expectations.
• Introducing tiered service offerings, where warranty remains a baseline commitment, and premium service levels (such as 2-hour or 24/7 response) are offered as chargeable upgrades.
• Using premium tiers not only as revenue generators but also as a communication tool that implicitly clarifies that the standard warranty does not equate to emergency service.

Aligning messaging, commercial models, and operational capability around service levels is becoming essential. Without this, even technically competent service organisations risk eroding trust by overpromising and underdelivering.

Meeting the Customer Online Without Commoditising the Brand

Whether or not transactions occur online, industrial buyers are already using digital channels to search for information, compare availability, and benchmark pricing. Customers cannot buy what they cannot find.

The lack of an OEM-controlled digital presence risks ceding both visibility and narrative to grey market actors. In many product categories, non-OEM or counterfeit spare parts are marketed online, often with strong SEO and easy ordering. When OEMs are absent or difficult to transact with digitally, buyers gravitate to these alternatives by default.

Digital presence does not necessarily mean a race to the bottom on price. Organisations with more mature online strategies focus instead on:

• Making it simple to identify the correct part (using exploded views, structured catalogues, or configuration tools).
• Providing clear, reliable information on stock status and lead times.
• Protecting OEM differentiation around quality, lifecycle value, and compatibility, even when prices are visible.

Traditional list prices often bear little resemblance to real net prices once discounts and tiers are applied. Publishing list prices without context can position OEMs as uncompetitive, while revealing channel pricing across regions or partners risks internal tension.

Addressing this demands careful segmentation of who sees which prices and under which conditions, as well as rethinking legacy pricing structures that were never designed for digital exposure. Nevertheless, remaining digitally invisible is increasingly viewed as riskier than engaging.

Availability and Resilience: The Cost of Being Ready

Resilience has become a standard term in supply chain discussions, but in practice, it comes down to being prepared for critical failures and avoiding excessive capital tied up in slow-moving or obsolete inventory.

Several structural dynamics make this harder to manage.

• As products reach end of life, production is consolidated and spare parts are centralised, often in a single location. Service teams must then balance local availability against declining installed base, obsolescence risk, and long replenishment lead times.
• Electronic components and control boards are particularly vulnerable to obsolescence due to frequent design or software updates, making overstocking a significant financial risk.
• Regulatory and trade complexity, such as customs friction in cross-border markets, increases the cost and delay of relying solely on centralised stock.

In response, resilience is increasingly managed rather than maximised.

• Fast-moving parts are kept locally available, while rare parts are supported through defined processes and clear customer communication when delays are unavoidable.
• Responsibility for availability is shared across the ecosystem, with distributors and service partners playing a greater role in forecasting and stocking based on their proximity to demand.
• Emergency logistics such as air freight are used selectively for critical cases where service continuity outweighs cost considerations.

Spare part availability at the moment of need is becoming a defining test of service credibility, with failures at that point directly undermining broader promises around reliability and lifecycle support.

Ecosystem Alignment: Where Complexity Becomes Fragility

Most industrial manufacturers no longer operate alone. They depend on distributors, dealers, integrators, and independent service providers to reach the end user. This ecosystem model creates reach and local presence, but it also introduces fragility.

Misalignment typically appears in several areas:

• Distributors prioritise ease and margin. If ordering OEM parts is complex, slow, or administratively heavy, they will naturally favour alternatives, including non-OEM parts, especially for customers pushing for quick fixes.
• If distributors sell both products and spares, cumbersome parts processes can negatively influence which brands they recommend at the point of sale.
• Service partners may not have access to complete data on service history, installed base, or parts consumption, limiting their ability to plan and stock appropriately.
• OEM attempts to drive digital ordering through proprietary portals or tools, which sometimes clash with distributors’ entrenched systems and habits. When new tools increase perceived workload or disrupt established workflows, resistance is strong.

Successful organisations increasingly treat their ecosystem partners as an extension of their own organisation rather than as mere channels. This implies:

• Providing partners with tools, training, and data as rigorously as internal teams, enabling them to represent the brand and deliver service at the desired standard.
• Engaging in ongoing dialogue about operational pain points, rather than unilaterally pushing new systems or models.
• Accepting that digital transformation must be designed around the reality of how distributors and service partners work, not just around OEM preferences.

At the same time, there is recognition that not all initiatives will be well-received. Moves such as shifting from phone-based technical support to web-based parts identification, for example, can generate pushback even when the digital tools are objectively better. Persistence, support, and demonstrating concrete benefits will be necessary to overcome such resistance.

Emerging Commercial Models: From Fix When Broken to Heat-as-a-Service

Commercial innovation in service is accelerating, even if many models remain in early or experimental stages.

A clear direction is the shift toward outcomes and uptime as the basis for value creation. This is reflected in bundled service contracts that combine maintenance, inspections, and priority support into predictable offerings that reduce unplanned downtime for customers while stabilising revenue for providers. In parallel, performance-based agreements are emerging, where payment is linked to uptime or defined performance outcomes rather than interventions or parts usage alone. Alongside these, refurbishment and overhaul programmes are gaining traction, with manufacturers taking responsibility for restoring and redeploying equipment to extend asset life and reduce customer capital expenditure.

More transformative models are also beginning to appear in sectors such as HVAC. Heat-as-a-service models replace product ownership with outcome-based pricing, where customers pay for delivered heat rather than equipment and maintenance separately. These models consolidate installation, equipment, service, and spare parts into a single long-term contract, shifting the focus from assets to guaranteed performance.

However, these approaches require deep integration across manufacturers, installers, distributors, and service organisations, with shared risk over long time horizons. They also depend on strong data foundations, reliable asset performance, and robust pricing models, which limits large-scale adoption today despite growing interest.

At the same time, traditional break-fix service remains a significant and persistent part of the market. Many customers continue to prefer reactive models based on repair when needed and payment for parts and labour. As a result, leading organisations are not replacing old models with new ones, but building portfolios that span both, offering outcome-based, subscription, and conventional service options side by side to match different customer needs and levels of readiness.

Digital, AI, and the Imperative to Make Buying Easy

Artificial intelligence and advanced analytics are increasingly integrated into aftermarket conversations, but the tone is changing. Initial hype is giving way to more pragmatic questions about where AI and digital tools can remove friction today, and how they can support the basics of good service.

Several application areas stand out:

• Parts identification: Using digital catalogues, visual tools, or AI-assisted matching to reduce misorders and speed up ordering.
• Installed base analytics: Combining service history, environmental data, and usage patterns to predict failures, optimise maintenance intervals, and forecast parts demand.
• Customer self-service: Enabling customers and partners to access documentation, service records, and ordering tools without needing to call support.

Yet, digital and AI must make it easier for customers to do business. Any system that increases complexity, slows response, or imposes friction on front-line users, whether internal or external, will struggle to gain adoption, regardless of its technical sophistication.

The most impactful progress in the next 3–5 years may not come from spectacular AI breakthroughs, but from rigorous execution on fundamentals such as clarity of information, responsiveness, reliability, and removing roadblocks in the buying and service journey.

The Capability Gap: What Will Differentiate Leaders in the Next Five Years

Looking ahead, a small number of capabilities are set to differentiate leaders in the service economy.

Orchestration of the ecosystem

As value chains become more layered, the ability to align OEMs, distributors, service partners, and logistics providers around a shared view of the customer, the asset, and the lifecycle becomes a strategic asset. This is less about control and more about coordination, data sharing, and common standards.

Mastery of the basics at scale

Despite the appetite for innovation, many organisations still struggle with consistent execution of foundational elements, such as clear communication of warranty and service levels, accurate and accessible documentation, reliable parts identification, and responsive customer support. Organisations that raise the baseline and sustain it will outperform, even before applying more advanced models.

Intelligent use of data to drive availability and customer value

The organisations that can turn existing data on installed base, service history, failure patterns, and partner behaviour into actionable decisions on stocking, maintenance, and commercial offers will be better positioned to deliver both reliability and profitability.

The ability to design and operate customer-centric commercial models

This includes not only outcome-based or subscription models, but also more modest adjustments that reward reliability and long-term partnership instead of short-term parts volume.

Ease of doing business

In a world where expectations are shaped by frictionless consumer experiences, industrial service organisations that remain difficult to navigate will lose ground. Conversely, those that systematically remove obstacles will solidify loyalty, despite price pressures and competitive alternatives.

The paradox of spare parts will not disappear. The organisations that thrive will be those that embrace it as a lens to redesign how they create value from the trusted, efficient, and reliable management of the entire asset lifecycle.