Heavy equipment manufacturers were faced with both challenges and opportunities throughout 2017. From widespread natural disasters to promises of historically high infrastructure spending, the past year has illustrated how rapidly the world of manufacturing is changing, and more specifically, the potential for companies within the heavy equipment industry to grow.
As 2018 begins, heavy equipment manufacturers have more opportunity than ever to win. There are three areas of opportunity to help these leading global brands succeed.
PRODUCT UPTIME BECOMES PIVOTAL DURING HURRICANE RECOVERY
2017 saw a devastating hurricane season, with the U.S. sustaining more than $200 billion in damages alone. This has led to an uptick in equipment orders, so rebuilding crews can help impacted areas get back to day-to-day operations. It’s vital that this equipment remains fully functional, without any downtime, to ensure that rebuilds can happen as quickly and efficiently as possible. Because of this, manufacturers must shift away from a reactive, break-fix method of service, to one focused on guaranteeing product uptime.
By using predictive analytics technology, crunching big data and embracing the next-gen IoT data that is coming from modern machinery, manufacturers will be able to know when a piece of equipment will require maintenance, prior to failure, to ensure maximum product uptime. It’s imperative that uptime is guaranteed during crises of such a large scale—where entire communities depend on heavy equipment to rebuild, and underscores how important uptime will be across the industries and verticals in 2018.
RENTAL EQUIPMENT WILL CONTINUE TO STRESS AFTER-SALES SERVICE EFFORTS
Renting heavy equipment, as opposed to owning it, has proven to be an effective way for construction firms to cut costs. This is known as the “power by the hour” model—where companies lease equipment for in-use hours, as opposed to owning it. This also takes the cost and labor of maintaining such equipment off of the user and places it on the shoulders of the dealers, and in turn the manufacturers. Manufacturers must guarantee that rental equipment is always up and running, as they are frequently held to uptime standards in Service Level Agreements (SLAs).
This puts pressure on the manufacturers to optimize their service parts inventory management, ensuring they have the parts that are needed in real time. Manufacturers must invest in sophisticated technologies to manage service parts inventory levels, ultimately eliminating excess and obsolete stock while simultaneously enhancing the customer experience. And as the rental space continues to grow – it will be worth more than $110 billion by 2019 – manufacturers must adopt new technologies and business practices now to ensure success.
NEXT GEN TELEMATICS WILL HELP CUT SERVICE INVENTORY COSTS
The global commercial telematics industry is expected to reach a net worth of $49.12 billion by 2020. These telematics systems are widely used in the automotive and heavy equipment industries to alert users to part failure and maintenance alerts. These technologies are becoming increasingly advanced and predictive, helping maximize product uptime.
As these technologies continue to become more advanced, manufacturers will have a better understanding of what service parts they will need, well ahead of actually needing them—thanks to the advanced data that telematics systems provide on the equipment they monitor. These telematics systems should be integrated into existing ERPs and after-sales service solutions to ensure inventory levels are automatically maintained.
In 2018 and beyond, heavy equipment manufacturers will need to continue to adjust the way that they operate in order to maximize equipment uptime and optimize their service part inventories. Those who are best prepared for the unknown will come out on top in 2018, while those who rely on the traditional break-fix method of service will quickly fall behind.