How The Digital Twin Makes The Aftermarket More Profitable

Once upon a time, aftermarket was a sleepy business, a call to the parts department to ship off a replacement. But aftermarket sales and service are now vital to profitability, providing gross revenues and profit margins that can rival or eclipse those of the original sale. Digital twin creates an opening to make this “servitization” aftermarket even more profitable, richening the customer experience for stronger margin gains and higher retention rates.

Digital twin accomplishes this through its ability to capture/create a digital duplicate of the spare part. This replica is not a static reproduction, but rather, is “animated” by continuous feedback of status and performance data to the digital representation, by sensors that gather data from the original part in action in the real world. The digital twin thus becomes an idea factory, a digital skunkworks constantly reinventing itself to become the best version of itself.

This changes the spare parts equation. Each time you make an aftermarket sale and service installation to replace a failed part, component or assembly, you can install an upgraded version of the original, based on operational performance data that has been streamed back to the digital twin and incorporated into the next generation item. This value-added replacement is a more feature-rich and profitable version hatched by your product development process

Double exposure of businessman working with calculator, oil fuel, Electric generating factory with sunset as business, Worker, Calculation, industrial and energy conceptBusinesses don’t have to wait for part failures to justify the extra value added by the digital twin. Sales engineers can make a good case for better performing, more durable versions of the replacement on a subscription basis. Customers regularly schedule Maintenance, Repair and Overhaul (MRO) of their assets and lines to ensure operational continuity. The continuous product tuning and upgrades flowing from your advancing design model make a business case for recurring sales—spares as a service—that are justified by improved customer operations.

The digital twin can mitigate part failure in the first place by monitoring the health and performance of the asset, forecasting its degradation or demise for early replacement and minimal disruption. The digital twin enables simulation of tweaks and changes to improve the next iteration of the product, and what-if comparisons of the production and financial implications of effecting various changes. This can lead to cost savings, and precisely targeted, multi-tiered servitization agreements predicated on expected performance. 

The digital twin ensures that a company has a “single version of the truth,” and the latest digital representation of the aftermarket item in its product catalog. Durable assets operate for years, and it’s vital to maintain a digital record of all component parts. This also speeds delivery: rapid, accurate access to parts specs for quick manufacture of their replacement. 

This is the so-called “long tail”: slow-moving items with unpredictable demand that nonetheless must be replaced rapidly to meet customer service levels. These items are costly to stock yet must be available on demand. The digital twin helps you stock these parts “virtually,” at your fingertips, for rapid build via quick-change tooling or additive manufacture.

John Martin

John Martin writes about technology, business, science, and general-interest topics. A former U.S. correspondent for The Economist (Science & Technology), he writes for the private sector, universities, and media, and can be reached at jm@jmagency.com.

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