March 27, 2026 Why Tariffs Always Find the Parts Business First

Tariffs don’t break supply chains evenly. They break parts operations first, and the data shows why.

By Josh Weiss, CEO, Syncron

Every time a new tariff headline drops, aftermarket teams feel it immediately. A policy change announced on a Tuesday can alter the landed cost of a critical component by Wednesday morning, before pricing models are updated, before suppliers have responded, and before the finance team has recalculated what that does to margins on parts sales or service contracts. Most OEMs are not structured to move that fast, and the gap between the speed of trade policy and the speed of parts planning is where profitability disappears.

I spent two decades in industrial technology, including running technical services and field support directly at a major global industrial conglomerate. I had a front-row seat to how aftermarket evolved over that time—from a function focused almost entirely on operational efficiency into something much closer to a core revenue and margin driver and acting as a business model transformation catalyst.

What I kept seeing, though, was that the parts operations side of that equation lagged. The strategic thinking about service got better. The investment in parts planning did not keep pace causing major impacts upstream and downstream. And in the current environment, that gap has real consequences.

Parts Drive Profit—But They’re the Last Line of Defense

Syncron’s 2025 State of the Aftermarket study, drawing on research with 550 OEM manufacturing leaders across North America and Europe, shows that parts now account for 57% of total aftermarket revenue. For most OEMs, that makes parts not just a revenue line but the financial backbone of the entire aftermarket business, and yet it is also the piece least prepared to absorb sudden cost disruptions.

A single tariff adjustment can rewrite landed costs overnight, forcing teams to simultaneously recalibrate pricing, re-source components, and reforecast demand. The research reflects how much pressure OEMs are already under:

• 51% are actively optimizing inventory and demand planning in direct response to tariff pressure, and
• 35% have implemented or are implementing dynamic pricing specifically for parts. Those are reactive measures — companies catching up, not getting ahead.

Adjusting what you have today is a necessary first step. But it is not the same as building an operation that can absorb whatever comes next, and at the pace policy is moving, the next wave may already be forming.

A Third of OEMs Know Their Parts Planning Isn’t Good Enough

One finding from the Syncron research stood out to me: one-third of OEM leaders rate their own parts planning capabilities as inadequate. These are not junior managers. These are the people responsible for the highest-margin piece of their aftermarket business, and a significant portion of them will tell you directly that they do not have what they need to manage it well when conditions shift.

When I look at what is actually driving that, it comes back to data. I cringe when I see OEMs doing S&OP based on historical demand without leveraging the parts-level intelligence sitting right inside their own aftermarket operations. That data exists. It is just siloed, inaccessible, or not connected to the decisions that need it. You end up with a sophisticated forecasting process at the equipment level and almost nothing useful at the parts level — which is precisely where the tariff exposure lands.

The research bears this out. Nearly half of aftermarket leaders cite a lack of data skills and expertise as a top challenge. Forty percent report that data is siloed across multiple systems — a number that climbs sharply in larger, global businesses. You cannot make sound planning decisions without a reliable, real-time picture of your costs, demand, and inventory, and right now, too many teams don’t have this.

Defense and Offense Are Not a Pendulum—They’re the Same Play

The pandemic was, in a sense, wave one of forced agility for manufacturing supply chains. Tariffs are wave two. And I will give the industry credit here — most OEMs are better positioned now than they were in 2020. When the latest tariff rounds broke earlier this year, the reactions were more measured because companies had built some resilience muscle. They had been through this before and knew how to move faster. As Syncron’s Claire Rychlewski outlined in Turn Aftermarket Disruption into Competitive Advantage, the manufacturers gaining ground during this disruption share a common characteristic: they’ve broken down the silos between aftermarket functions — and that integration is what makes fast decision-making possible.

But I still see most operations treating defense and offense as a pendulum: hunkering down when the news is bad, pushing for growth when things stabilize. The problem with that approach is that you never actually build anything durable. You are always reacting to conditions rather than setting them.

The question I push our customers to sit with is this: if you become more resilient than your competitors, what is that worth commercially? Is there a premium a customer will pay for certainty that the part they need will be there when their equipment goes down?

In mining, I saw this directly. Uptime is everything, and parts availability tied directly to lost productivity and lost revenue. That is not a cost-center dynamic. That is a pricing conversation, a contract conversation, a loyalty conversation. Flipping the script from defensive to offensive starts with recognizing that resilience has revenue attached to it.

Parts are not just inventory or committed capital. They are income-producing assets across the life of the equipment they support. Getting to that mindset, moving from a transactional view to a lifecycle view, is still a significant shift for most organizations, but it is where the real value is.

Investment Is Rising—But the Work Has to Match the Ambition

The market is sending clear signals. Syncron’s research found that 81% of OEMs plan to increase aftermarket investment over the next five years, with one in five targeting growth above 15%. Almost half of OEM leaders now rank improving aftermarket services and operations as a top strategic priority for the next two years, above innovation, cost management, and new customer acquisition. Aftermarket is earning its seat at the boardroom table.

The underlying business case is straightforward — and the financials make it even more compelling. Most OEMs are projecting a continued slowdown in new equipment sales, while average equipment lifespans across most end markets are at all-time highs. When demand for new equipment slows — as we’re seeing in the US agricultural machinery industry, for example — the aftermarket doesn’t just hold revenue steady; it becomes the primary growth engine. This matters even more when you consider that parts businesses typically generate EBIT margins averaging around 25%, compared to roughly 10% for new equipment. That spread is not marginal — it’s structural, and it fundamentally changes how leadership should be prioritizing investment. The parts business needs to be ready for that responsibility, and at present, most organizations are still a few capability-building cycles away from being able to carry it.

In the U.S. specifically, nearly one-third of OEMs expect aftermarket to contribute at least half of total revenue within five years. Managing that at scale requires a fundamentally different level of data maturity, process integration, and organizational alignment than most aftermarket operations have today.

Every repair needs parts… every part needs a plan

Data foundations come first.  I go back to the idea of ‘garbage in, garbage out’ here. The tools are advancing quickly and there is real potential in AI-driven parts forecasting, but the starting point must be high-fidelity data. The case for building that foundation now, not after the next disruption, is well made in Building Tariff-Resilient Supply Chains with Digital Thread — and the same logic applies directly to parts operations.

The organizations making real progress are consolidating systems into a central platform, standardizing processes across regions, and finally investing in genuine integration with their dealer and supplier networks. Without that foundation, advanced tooling just automates bad inputs faster.

The silos between parts, service, and data functions also have to come down. Real-time decisions — the kind a tariff change demands — require parts planners, service operations, and data teams working from the same signals at the same time. OEMs that have done this work report stronger revenue growth, not just lower costs. The integration is not a nice-to-have; it is the thing that makes everything else work.

Finally, parts performance needs to be connected directly to executive KPIs. Fewer than one in five service leaders are currently using supply chain metrics to build influence at the C-suite level, which means most aftermarket teams are underselling what they deliver.

Customer retention, contract renewal rates, equipment uptime, revenue per asset: these outcomes run directly through parts availability and planning quality. Teams that learn to tell that story in the language of the boardroom get the investment and the mandate. Those that stay inside the operational lane get treated like a cost center.

Resilience and Growth Are the Same Investment

Tariff volatility is not going away. Neither is the pressure on new equipment sales, the lengthening of asset lives, or the customer expectation that the right part will be available when they need it. These pressures are not in tension with each other, rather they all point in the same direction.

Parts planning excellence is both the defense and the offense, and the organizations that figure out how to run both at the same time will build an advantage that compounds over time.

A world-class parts business does not just protect margins during disruption. It creates the reliability customers pay a premium for, the loyalty that survives a slow year in equipment sales, and the recurring revenue that makes the whole business more predictable. That is a competitive advantage worth building, and the time to build it is not after the next tariff, it’s now.

About the Author
Josh Weiss is the CEO of Syncron, a global provider of aftermarket service management software purpose-built for OEMs. He brings more than two decades of industrial technology leadership to the role, including senior positions at Hexagon, where he ran technical services and support across some of the world’s largest mining and industrial equipment manufacturers—giving him direct, hands-on accountability for field service operations, spare parts availability, and the dealer networks that sit between OEMs and their end customers. At Syncron, he works with OEMs across automotive, heavy equipment, life sciences, and industrial manufacturing to strengthen aftermarket as a growth engine rather than a support function. Syncron’s 2025 State of the Aftermarket study, referenced in this article, was conducted by B2B International and based on quantitative interviews with 550 senior aftermarket decision-makers at OEM organizations with annual revenues of $250 million or more, spanning the U.S., DACH, France, and the Nordics.

Author feature:

Service Parts: The Key to Service Growth in 2026 | Service Council, February 2026

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