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Aftermarket & Services

Helping clients capture the aftermarket potential—the largest source of untapped value in aerospace and defense—by assessing the installed base opportunity, improving pricing, and optimizing operations

 

What does it take to win in the aftermarket? The landscape here is much different from new-equipment sales, but many aerospace and defense (A&D) companies have not yet refined their approach for identifying opportunities, targeting customers, pricing spare parts, upselling, or expanding into new geographies.

We have helped clients worldwide capture more value from the aftermarket and recognize the unique challenges in this space. Our global expertise, combined with our proprietary tools, allows us to craft strategies that help clients develop a thriving aftermarket business.

What We Do

Commercial strategy

Our insights can help with sales planning, account management, value pricing, market penetration, and creation of aftermarket-service offering.

Operations

We work with clients to improve all operational areas, including sourcing management, general operations, supply-chain performance, and cost optimization for spare parts by applying design-to-value and standardization technique.

Organizational processes and systems

In addition to examining organizational structure, we help clients forecast their talent needs, improve performance management, and develop strong incentives to motivate talented staff.

New growth levers

We help find the best growth opportunities within the aftermarket by looking at all potential sources, including M&A, the provision of new or digitized services, and the creation of new contracts and service models.

Examples of our work

Identifying and capturing opportunities

A defense company was consistently performing below potential for aftermarket service orders because it focused on selling new systems. With our assistance, the client developed digital solutions to identify aftermarket opportunities. It also instituted capability-building programs to improve the aftermarket salesforce, created better commercial campaigns, and optimized inventory and procurement operations for spare parts. To monitor progress, we helped update tracking processes for all commercial opportunities. Our solutions helped increase the client’s aftermarket service orders by more than 40 percent.

Market analysis and insights

An aerospace player wanted to become the top aftermarket services provider in its sector but knew little about the installed base. The company also relied on a “cost-plus” pricing strategy, rather than looking at the perceived value of parts and services to clients. To help the company improve, we developed an analytical model that estimated the size of the aftermarket opportunity. We also helped identify upselling opportunities, optimize spared-parts pricing, and explore geographic expansion. Our recommendations increased aftermarket service revenues for the commercial fleet by over 10 percent within two years, and additional gains are expected.

Featured Capability

Periscope
Periscope is the technology backbone of McKinsey’s Marketing & Sales Practice. It combines world-leading Intellectual Property, prescriptive analytics and cloud-based tools, with expert support and training. This unique combination drives revenue growth – now, and in the future.

Featured Experts

Vik Krishnan
Partner
Advises companies in the aviation, travel, and aerospace sectors on operational-performance improvement, digital transformation, and growth
Hugues Lavandier
Senior Partner
Advises energy, mining, and industrial-equipment companies as they set growth and portfolio strategies and evaluate corporate-finance opportunities; supports investors and private-equity firms on a broad range of transactions in the commodities and industrials sector
Tomas Nauclér
Senior Partner
As global leader of McKinsey Sustainability, helps companies and governments develop strategies grounded on a fact-based understanding of the potential impact of climate change
Robin Riedel
Partner
Co-leads the McKinsey Center for Future Mobility
Ilan Rozenkopf
Partner
Specializes in the aerospace and defense industry and is a leader of the Strategy and Corporate Finance Practice in France.
Simone Vesco
Partner
Serves clients on strategy, marketing and sales, operations, working capital, and aftermarket and services transformations

Featured Insights

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Up in the air: How do consumers view advanced air mobility?
– Our new global survey shows that consumers are ready to take advantage of advanced air mobility, but concerns remain.
Commentary

Wall Street to Mission Control: Can space tourism pay off?
– With the COVID-19 pandemic curtailing earthly travel, space tourism may seem like a far-fetched dream—but some companies are betting on high demand.
Article

Selling in the aftermarket: How to win the sales street fight
– Seven unique factors in aftermarket sales lead to a seven-part recipe for a high-performing aftermarket sales force.
Article

Aftermarket Services: The near-term growth opportunity in targeting the right customers
– There’s a gold mine in aftermarket services. But companies first need to know where to dig—and how hard.
Article

Industrial aftermarket services: Growing the core
– OEMs may find untapped goldmines in aftermarket services by strengthening their core business in parts, repair, and maintenance.

How We Help Clients

Connect with our Aerospace & Defense Practice

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