Building a Spare Parts Business Around Customer Risk, Not Internal Convenience

As supply chains remain volatile and asset utilisation targets intensify, the cost of unplanned downtime has become visible not only on a P&L, but in customer contracts, penalties, and lost trust. In ports, mining, construction, and other asset-heavy environments, the shift from “run to failure” to “design for availability” is now being enforced by the end customer.

At Spare Parts Business Platform 2026 – Power of 50, Marco Sajiv Mambretti, Global Spare Parts Director at Cavotec, shared insights from the company’s journey over the past few years, illustrating what it takes to transform spare parts and services from a reactive cost centre into a proactive, customer-centric growth engine, and why the real work is less about systems and more about people, governance, and focus.

From Engineering Excellence to Structured Services

Cavotec operates globally in highly demanding environments, such as ports and terminals (including automated mooring and shore power), maritime, mining, construction, and general industry. Its portfolio is broad, but its business model is typical of many specialised OEMs: high engineering intensity, customised solutions, and long-lived installed bases spread across more than 60 countries.

Services have always been provided in this context, but for decades, they were informal, unstructured, and largely considered a support activity. That changed in 2018, when services were carved out as a dedicated division with a clear mandate to become profitable, professional, and positioned as a core part of the value proposition.

By 2025, the spare parts business alone was generating an estimated EUR 30–35 million in annual revenue, with an additional EUR 7–10 million from services such as commissioning, inspections, retrofits, and full overhauls. That represents a significant step up from the EUR 20–25 million spare parts revenue only a few years earlier.

The strategic question underpinning this evolution was not simply “how do we sell more parts?”, but “how do we reduce our customers’ operational risk and get paid for it?”

When Customer Behaviour Changes the Rules

The inflection point for this transformation came not from an internal strategy workshop, but from a change in customer expectations further down the value chain.

For example, terminal operators in Southeast Asia that had historically run their equipment to failure suddenly found themselves contractually bound to strict vessel turnaround times. Shipping lines began demanding fixed windows, for instance, ten hours to fully unload and reload a vessel. Any deviation meant penalties.

In such an environment, a single critical component failure on a crane becomes a contractual liability. Local “fix-it” workshops and improvised parts sourcing, once acceptable, suddenly represented unacceptable risk.

This change forced terminal operators to rethink their strategy towards maintenance and availability, and it forced OEMs to reconsider their role. Rather than simply supplying components and leaving maintenance strategies to the customer, OEMs were now being asked to help manage operational risk directly.

They pivoted away from transactional parts sales toward partnership-based models, including service level agreements (SLAs) and, in some cases, operations and maintenance agreements where the OEM assumes a more active role in ensuring uptime.

Rebuilding the Service Backbone: From Centralised to Local

To respond to these demands at scale, the organisation redesigned its service and spare parts operating model around proximity, expertise, and empowerment.

The Americas, EMEA, and APAC were established as regional clusters supported by a network of seven service centres. These centres function as the operational glue of the service business, each with a manager, field service technicians, a workshop, and the authority to respond quickly to local customer needs.

Around 120 service experts now support this installed base, commissioning new equipment, executing installations, troubleshooting, retrofitting, and performing inspections. Importantly, they are positioned not just as technicians but as ambassadors of the brand and its value.

A deliberate investment was made in their development, not only on the technical side, but also in commercial awareness. The objective was not to turn engineers into salespeople, but to ensure that the individuals most trusted by the customer could articulate the impact of failures, the value of preventive actions, and the benefits of working with the OEM as a long-term partner.

This required moving decision-making power for stock and service closer to the field, instead of keeping it centralised in Europe, where most manufacturing is located. The aim was to reduce lead times and ocean freight from double-digit weeks to single-digit days.

Transforming Inside Sales from Back Office to Frontline Insight

A pivotal change in the spare parts strategy was the repositioning of inside sales and service teams.

Traditionally, these functions waited for inbound requests. A part failed, a customer called, a quote was issued. The business was almost entirely reactive. To unlock the potential of the installed base, that posture had to flip.

The inside sales organisation was reoriented around proactive outreach, supported by data from maintenance manuals, historical purchase patterns, and installed base knowledge. Discussions with customers began to focus on:

• When critical parts were last purchased;
• What maintenance intervals were recommended;
• What the consequences of a failure would be in the current operating context.

Key performance indicators were updated so that each inside sales and service team member was expected to spend time physically at customer sites at least once per quarter. Their role expanded from processing codes in an ERP to understanding what those codes mean in the field, which parts are truly critical, how assets are used, and where downtime hurts most.

That proximity strengthened relationships, and it sharpened the organisation’s ability to prioritise which parts should be forecasted, stocked, and priced with particular attention.

Rethinking Inventory: Smart Stock, Small Pilots, Local Empowerment

One of the thorniest challenges in spare parts is inventory. For highly engineered, customised products, the temptation to centralise everything and stock as little as possible is strong. Finance departments are understandably wary of writing off obsolete stock accumulated through poor forecasting and one-off engineering.

At the same time, long lead times from central factories directly undermine the OEM’s ability to support customers in high-availability environments.

To navigate this, the organisation introduced a smart stock approach built around three principles:

1. Start small and empirical, not global and theoretical.
2. Empower local teams with budget and accountability.
3. Tie stocking decisions to real lost opportunities and customer risk.

The process began by analysing where opportunities were consistently lost because of long lead times, using CRM data and sales feedback. A pilot was launched in Australia, a region particularly exposed to logistics delays.

Instead of attempting to solve the whole portfolio at once, the team focused on just five parts, relocated from European stock to a local warehouse in Australia. The first month saw little movement. In the second month, orders began to pick up. By the end of the first quarter, the entire batch was sold, and replenishment was triggered.

This simple, low-risk experiment demonstrated three things:

1. Customers would preferentially buy from the OEM if lead times were competitive.
2. Local stock could turn quickly if correctly selected.
3. A pragmatic, iterative S&OP process was more valuable than a complex, top-down one.

Responsibility for these decisions was pushed down into the regional service centres. Teams were given a defined budget and tasked with making it work. The measure of success was not only reduced lead times, but also higher capture of spare parts revenue that would otherwise have gone to alternative sources.

The contrast across regions was insightful. In Australia, where the distance from factories is obvious, the model took hold quickly and delivered visible benefits. In Europe, where manufacturing proximity creates the illusion that stock is always close enough, adoption has been slower, exposing a common blind spot in many OEMs.

Pricing: Differentiating the Proprietary from the Generic

Inventory is only one side of the spare parts equation. Pricing is another.

The company’s portfolio includes both proprietary components, which cannot be sourced elsewhere without significant reengineering, and commercial items that can easily be purchased from alternative vendors. Treating these categories the same from a pricing standpoint invites competition where it is not necessary and encourages substitution where it is.

To address this, a dedicated pricing competence was brought in to define structured pricing schemes that, among other things:

• Capture the full value of proprietary parts, particularly when they are critical to uptime;
• Remain realistic on commercial items, avoiding margin policies that push customers into the arms of competitors or local resellers;
• Support bundled offerings such as kits and SLAs that provide clear, transparent value for customers while locking in long-term relationships.

This differentiation helps balance profitability with competitiveness and is essential when moving from a purely transactional model to a more service- and availability-driven one.

Service Level Agreements: From Warranty Extension to Risk Partnership

A central pillar in the evolving model has been the growth of service-level agreements. Around 35 such agreements are now in place, particularly for newer technologies such as automated mooring and shore power systems, where:

• The technology is unfamiliar to many operators;
• The cost of misuse or poor maintenance is high;
• The OEM has deep, unique expertise.

Initially, SLAs were often positioned as warranty extensions. Over time, their role has expanded. In some cases, they have evolved into operations and maintenance agreements, where the OEM not only maintains the equipment but actively supports operational performance.

For the customer, this provides assurance and risk reduction in a context where penalties for underperformance can be severe. For the OEM, SLAs create predictable revenue streams, closer access to operational data, and stronger barriers to competition.

If you don’t schedule your maintenance, your equipment will schedule it for you. This has been adopted even in technician branding, anchoring a message that resonates strongly with operators who have experienced the cost of unplanned downtime.

Digital Visibility and Selective Transparency

To support faster responses and internal coordination, a lightweight digital backbone has been developed around spare parts availability. A Power BI dashboard now allows internal teams to check stock by part number and location globally, enabling faster confirmation of lead times and cross-regional sourcing.

For a subset of customers that provide rolling 12-month forecasts, stock availability is shared transparently, for now, through simple tools such as spreadsheets. Work is also underway on a niche e-commerce solution, initially focused on radio remote controls, which are frequently requested by a global network of resellers.

Here again, the approach emphasises piloting in a constrained segment, learning, and then scaling once both processes and systems are ready.

Managing the Installed Base: Ambition Tempered by Pragmatism

With 50 years of history and equipment still operating that predates many of the current staff, the installed base represents significant potential. It also represents complexity.

Rather than attempt a grand, database-driven overhaul of installed base management, the company has opted for a more pragmatic, region-by-region mapping grounded in the reality of local service centres. The focus has been on:

• Identifying customer segments where equipment criticality and relationship strength justify proactive engagement;
• Developing spare parts kits and maintenance packages tailored to common configurations;
• Applying an 80/20 lens to avoid being paralysed by edge cases and customisations.

This is particularly important in an engineering-driven culture where perfection is often the default expectation. The discipline has been to accept that an 80% solution implemented quickly and iterated in the field often delivers more value than a 100% solution that never leaves the drawing board.

Lessons for Industrial Leaders: People, Pilots, and Proximity

This journey provides several insights relevant to any industrial company seeking to professionalise services and spare parts.

1. Transformation is people-led, not system-led.

The most impactful changes do not begin with new tools, but with redefining expectations for service technicians and inside sales teams, empowering regional centres, and spending time on the ground to align perspectives. Training in commercial awareness and customer impact is as critical as technical competence.

2. Start with pilots, not blueprints.

Rather than designing an enterprise-wide S&OP or global spare parts strategy in theory, start with tangible pilots targeting specific regions, parts, and customers. Successes create internal proof points that justify further investment and scaling.

3. Push decision-making closer to the customer.

Decentralising stock and giving regional teams budget and accountability can shorten lead times and increase responsiveness. It can also increase engagement and ownership among service and inside sales teams.

4. Use customer risk as the organising principle.

The most compelling business cases arise where customer contracts and penalties make downtime obviously expensive. Focusing on these environments creates a clear narrative for preventive maintenance, SLAs, and premium availability.

5. Accept imperfection and manage engineering culture.

In highly engineered businesses, there is a tendency to overdesign processes and offers. Applying the 80/20 rule and allowing room to learn by doing, including accepting that some initiatives will fail, is essential to move at the speed customers now expect.

6. Make the installed base a managed asset, not a historical record.

Systematically leveraging installed base knowledge, even if initially in targeted pockets, is a powerful growth lever. But it requires deliberate effort, discipline, and cross-functional coordination between service, sales, supply chain, and pricing.