In today's competitive market, companies are increasingly turning to strategic product design and branding innovations to not only drive cost savings but also boost aftermarket revenue. This approach is especially critical for industries like heavy equipment manufacturing, where aftermarket parts and services play a significant role in maintaining long-term profitability. Branding, particularly for original equipment (OE) manufacturers, can be a game changer. By reclaiming the aftermarket from suppliers and ensuring that replacement parts carry the OEM's brand, companies can control both market perception and revenue flow.
One individual who has made notable contributions in this space is Sakthivel Rasu, who led a transformative project at a Fortune 500 company specializing in heavy equipment. When the company was facing a substantial loss in aftermarket revenue due to supplier branding on its parts, Sakthivel spearheaded a strategic initiative to switch the branding from supplier to OEM. This project resulted in a significant aftermarket revenue increase, from $2M to $3M within the first five years and approximately $6M over a decade. His leadership helped reclaim the aftermarket space for the company, providing a long-term, sustainable revenue boost.
Sakthivel’s approach began with an exhaustive process of identifying the affected parts, focusing specifically on driveline components, which were integral to the company’s product portfolio. He meticulously analyzed costs and determined the most critical parts to undergo OEM branding, ensuring minimal financial impact on the overall part production cost. Negotiating directly with suppliers, Sakthivel was able to introduce OEM branding on the parts, which later matured in the aftermarket and significantly contributed to the company’s revenue. His negotiation skills, combined with a sharp financial acumen, enabled him to navigate the complexities of supplier relationships and drive cost-effective branding strategies that benefited the company’s bottom line.
One of Sakthivel’s biggest achievements lies in his ability to collaborate with multiple stakeholders, both internal and external. Over the course of this project, he worked with over 12 global suppliers and affected more than 500 part numbers. The scale of this endeavor required not just technical engineering knowledge, but also robust project management skills, financial insight, and the ability to lead cross-functional teams. His persistence and ability to manage the various moving parts of the project were crucial in its success.
The challenges Sakthivel faced were significant. He had to engage with suppliers that were initially reluctant to agree to OEM branding changes, as these changes would directly impact their own aftermarket revenue. The negotiations spanned over a year and involved detailed cost analysis, internal audits, and supplier feasibility studies. In some cases, when suppliers refused to comply, Sakthivel led efforts to source new suppliers who could meet the company’s branding requirements. This process, which could take up to two years, involved everything from validation and sampling to full production approval, ensuring the OEM branding was consistently applied without compromising quality.
Sakthivel’s contributions have been instrumental in transforming the company’s approach to aftermarket branding. His work not only increased revenue but also solidified the company's brand presence in the aftermarket. His foresight in understanding how branding impacts aftermarket revenue, combined with his ability to execute large-scale projects, has made a lasting impact on the organization.
As industries continue to evolve, Sakthivel’s work offers valuable insights into the future of aftermarket revenue strategies. His experience demonstrates that OEMs must carefully manage branding on parts, collaborate closely with suppliers, and understand the long-term financial implications of design and branding decisions.
Sakthivel’s work is a testament to the importance of innovation in product design and branding. His efforts show that by strategically managing branding in the aftermarket, companies can unlock new revenue streams, strengthen their market presence, and ultimately drive greater success.
This content is produced by Rahul Sharma.
