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The conversation around sustainability in manufacturing is no longer just about regulatory compliance or corporate social responsibility—it’s about business resilience, profitability, and long-term growth.
As environmental concerns and economic pressures converge, business models are changing and OEMs are finding that sustainability is not only good for the planet but also a key driver of new revenue streams, customer retention, and competitive advantage.
To explore how manufacturers are approaching sustainability in the aftermarket, Syncron and Copperberg recently hosted a sustainability workshop with industry leaders, including representatives from Toyota Industries, Atlas Copco, Volvo Penta, and TOMRA.
We wanted to find out what sustainability means to them and to hear first hand about the biggest opportunities and challenges that they are facing.
From leveraging servitization to implementing circular economy best practices, we explored the routes manufacturers are taking to ensure a more sustainable, data-driven, and profitable future across four key themes:
- The role of sustainability in the aftermarket industry
- Servitization as a lever for sustainable growth
- Overcoming barriers to the circular economy
- Data-centric strategies for sustainability
This blog will introduce each theme and share some of the key insights that we gleaned from these industry giants on their journey toward growth and sustainability.
1. The role of sustainability in the aftermarket industry
Sustainability in the aftermarket is no longer a niche concern—it’s a core business driver for OEMs looking to improve resource efficiency, reduce waste, and generate new revenue streams.
As OEMs are shifting away from traditional cost-plus business models and evolving towards service-based approaches that deliver higher margins, sustainability is becoming much more aligned with growth trajectories.
And the aftermarket plays a critical role in some of the biggest service sustainability opportunities:
- Extending product lifetimes
- Reducing consumption of new materials
- Optimizing supply chains to minimize freight impact
- Minimizing waste materials produced
- Ensuring higher first-time fix rates
- Increasing efficiency of end-to-end processes
These opportunities also make good business sense, reducing waste and improving efficiencies, on the one hand, while improving margins and deepening customer loyalty, on the other.
What we heard from industry leaders
Manufacturers at the roundtable highlighted that the critical lever to driving sustainability in a way that promotes growth is to leverage what you already have but in smarter ways.
Businesses are starting to introduce circular economy best practices, for example, in order to extend service lifetimes, minimize new raw material consumption, and reduce waste.
They emphasized, in particular, the importance of setting up repair and refurbishment programs. This means that the OEM sets up processes for the customer to report problems, sending them replacement parts while refurbishing the broken part to sell on (at a higher margin than the original equipment!).
This is a high-margin business opportunity that also helps to ensure that equipment lasts as long as possible. And the customer is happy because they not only get a working part straight away but often even get an upgraded version!
Aftermarket data also plays a key role in driving sustainability. The right visibility into equipment usage, maintenance needs, and failure patterns is critical for OEMs to develop effective refurbishment, upgrade, and predictive maintenance programs.
This data can also unlock powerful new sustainability use cases, for example:
- AI-driven diagnostics can analyze data patterns to identify issues early, preventing premature failures and unnecessary replacements
- AI-optimized predictive maintenance plans and enabling technicians with GenAI-based knowledge centers can markedly improve fix rates
- Leveraging IoT data to teach equipment drivers and operators how to be optimally carbon-efficient in operating their vehicles
By leveraging data-driven optimization around key levers, businesses can ensure that less raw material is mined, customers save money (because they don’t have to replace entire pieces of equipment as often) and turnover of spare parts becomes a new source of high-margin revenue for OEMs.
2. Servitization as a lever for sustainable growth
The shift from product-based business models to service-based ones is accelerating across the manufacturing sector, with servitization emerging as a powerful driver of sustainability.
By transitioning from one-time product sales to long-term service contracts, OEMs are incentivized to keep their equipment running longer and more efficiently—benefiting both the business and the environment.
What we heard from industry leaders
According to our industry leaders, servitization is an opportunity to drive sustainability because it aligns incentives between OEMs and customers in that direction.
With OEMs taking on responsibility for maintaining, repairing, and refurbishing the equipment they also take on the cost burden of failure and are incentivized to ensure the equipment lasts as long as possible and to carefully carry out predictive maintenance. For example, they might start redesigning the equipment they sell for modularity and ease of long-term maintenance or ensuring that their refurbishment processes meet quality standards. Similarly, because they know that they will be responsible for this work, they have much more certainty with which to plan more efficient supply chains and technician time.
Another point raised was that servitization forces significant improvements in the quality and accessibility of equipment data that can be leveraged to make important shifts toward sustainability.
When an OEM owns or maintains a fleet of equipment under a service contract, for example, they gain deep visibility into operational performance, wear and tear, and maintenance needs. This data enables predictive maintenance strategies, reducing unplanned downtime, optimizing resource use, and minimizing wasteful part replacements.
3. Overcoming barriers to the circular economy
The circular economy is a key pillar of sustainability in the aftermarket, offering a path to minimize waste, reduce raw material consumption, and create continuous revenue streams through remanufacturing and refurbishment.
However, integrating circular practices into a traditional service organization requires overcoming significant barriers.
What we heard from industry leaders
Transitioning to circular economy practices is a complex process that requires incremental change rather than an all-at-once transformation. The most effective approach is to start small, experimenting with one high-impact area of your business. Learn and iterate your approach before expanding successful models to other parts of the business.
For example, redesigning an entire product line to be modular may seem overwhelming, but focusing on a single, high-value component—such as an engine or transmission—allows businesses to test new designs, refine refurbishment processes and gradually scale their approach. Redesigning these high-value components also gives the biggest payoff in terms of profitability and sustainability.
Beyond technical hurdles, organizational and customer adaptation is one of the biggest challenges. Employees need to relearn processes, acquire new skills, and embrace a shift in responsibility—where OEMs, not customers, take charge of broken parts and equipment failures. Likewise, customers must be guided through the transition, reassured that they will receive the same (or better) level of service with these new practices.
Learning from other manufacturers that have already started walking this path is a fantastic starting point as they have already made some of the mistakes for you.
4. Using data to drive sustainability initiatives
Data is the cornerstone of any sustainability initiative, enabling businesses to track, measure, and optimize their impact across the entire value chain.
Yet service businesses tend to struggle with siloed departments and fragmented data that gives them poor visibility of end-to-end processes and the total equipment lifecycle, drastically limiting the kinds of service models and sustainability initiatives they can deploy.
Ensuring high-quality data can be integrated from across your business and democratized to the teams that need to use them is one of the most complex sustainability challenges.
What we heard from industry leaders
How can businesses move towards centralizing their data and creating a unified data ecosystem?
As before, the key is to start small and scale strategically. Rather than waiting for perfect data or attempting to centralize everything at once, businesses should focus on a high-value use case—such as tracking the condition of engines across a fleet.
By creating a single source of truth for that specific dataset, businesses can refine data collection, transformation, and governance processes without unnecessary complexity. Once this minimum viable product (MVP) is established, companies can expand vertically (by identifying gaps and refining the existing use case) or horizontally (by applying the same data processes to other areas of the business).
Another major obstacle to creating a unified data ecosystem in the aftermarket is working with key third-party stakeholders such as dealers.
For example, if an OEM wants access to IoT data from connected equipment, dealers may see this as a move to sell more spare parts directly. They might fear that this move will reduce their own sales opportunities and be highly resistant to sharing the data.
Overcoming this opposition means taking dealers and other stakeholders with you on the journey, giving them new, service-based opportunities in the aftermarket—e.g. facilitating the services by training drivers or technicians—and educating them on how they stand to benefit from these more advanced business models.
Conclusion
For these leading manufacturers, sustainability represents a massive opportunity to not only reduce waste and increase efficiency but drive long-term competitive advantage by bolstering margins, brand reputation, and customer loyalty.
But, clearly, there are significant challenges, not least around how to successfully transition your whole business to new, innovative ways of working.
As industry leaders like Toyota Industries, Atlas Copco, Volvo Penta, and TOMRA. have shown, the path to sustainability requires strategic investment in digital tools, data-driven decision-making, and a willingness to rethink traditional business models.
The right technology and data are central to this transition, enabling you to spot opportunities, track key metrics, and have end-to-end transparency across your business.
At Syncron, we specialize in Service Lifecycle Management, helping businesses to leverage data and AI to create Aftermarket Intelligence, enabling them to optimize their aftermarket business across the whole suite of functions: price optimization, inventory planning, and service fulfillment.
If you need help optimizing your aftermarket business to drive growth as well as sustainability, reach out to one of our experts.
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