Navigating Your Supply Chain Challenges
Everywhere you look, there are supply chain issues. Bottlenecks, component shortages, you name it! Original Equipment Manufacturers (OEMs) are struggling to keep supply up with demand, and now your material handling operations are paying the price.
During the best of times, you could expect lead times of 12-16 weeks for mobile equipment. Companies, end users, OEMs and dealerships are all waiting in line for mobile equipment orders that will not even arrive this year, as current lead times for equipment range anywhere from 6 to 24 months, easily 2-3 times longer than normal.
It has gotten so bad that customers are cancelling their orders in desperation, hoping they can find an alternative with a shorter lead time somewhere else. While this longshot approach may work for some, it will not work for most.
An aging mobile equipment fleet cannot keep up with the demands of your organization. As you wait in line for new equipment, maintenance spend piles up, expensive rentals appear, and productivity sinks as production staff create workarounds for down equipment.
On the flip side, there may be an opportunity to reimagine your existing mobile equipment fleet through the lens of Fleet Team. What if you do not need to wait in line for your mobile equipment? What if you have several options to choose from, specifically tailored to you and your needs?
Examine your maintenance
Keep your current fleet running until you can get new equipment. Sounds easy enough, but you do not have staff dedicated to this – you have products to make. That is why examining your maintenance costs with microscopic detail is at the center of what we do. We make sure that we identify repetitive repairs, monitor planned maintenance compliance, root cause issues that lead to downtime, etc. If you do not have a pulse on these metrics, you could be spending money on unnecessary maintenance or are not spending enough money on assets that need it most. Fleet Team tracks this valuable information while keeping your vendors and suppliers accountable so that you do not have to. We partner with quality vendors across the U.S. and Canada. We then see to it that your high standards are met, that you are always paying reasonable prices for needed services, and your essential equipment receives the care required to keep your operations moving.
Dispose of obsolete or unused equipment from your fleet
Do not pay for mobile equipment you are not using! Monitoring utilization of assets at each facility gives you a basic understanding of which equipment is going unused or is now obsolete. This creates an opportunity to either remarket or sell this equipment and no longer worry about paying for unnecessary assets. With our network of used equipment dealers, we can easily help clients resell their mobile equipment assets to other clients who need used equipment or put onto the resellers market, so you are not bleeding money on equipment you are not using.
Reallocate your mobile equipment
One man’s excess mobile equipment is another man’s treasure! Always look internally at which pieces of equipment have economic life and may benefit another facility. Rather than renting, buying, and standing in line for new equipment, you can rehome to another member of your family! Unfortunately, many companies lack the required visibility across facilities to know:
- What assets are at each facility
- Which have economic life and
- Which have low enough utilization to be transferred without operational disruption.
Our clients do not have that issue.
Extend your OEM partnerships
This is a great opportunity to “shop around” for alternative suppliers and OEM’s. Humans are creatures of habit and tend to prefer certain brands and suppliers. However convenient, this cannot be the answer in today’s environment as your operations suffer while waiting on equipment from a preferred OEM or dealer. With a partner in your corner that is independent of any brand, your options become endless. You will not be tied to dealer territories, or just one OEM, but will have a plethora of options for you to choose from. Add to brand independence the flexibility to lease, rent, rent-to-own in a two-party agreement and you have all options available. Choice is a good thing!
Weigh your leasing options
Most feel like they are locked into their lease with no way out. While the lessor wants you to think that is true, it is not. We work with lessors on leasing options for mobile fleets daily. Our biggest recommendation is to look at refinancing or to extend the lease on the equipment you already operate. With our fleet analytics, we measure the wear and tear, utilization, repair, and maintenance, etc. on each mobile equipment asset in your fleet and use this information to renegotiate with your lessor. Here is a scenario of what we DON’T want to happen: You have a 60-month lease on an asset that is in being used in harsh conditions daily. It stops being fully functional 24 months prior to end of term. Now you are stuck with paying the remainder of your lease, on equipment that you do not own and will also pay additional costs for the repair of the equipment before you turn it into the lessor (who will then sell the improved equipment and make profit). Using our fleet analytics and our flexible leasing product, we can help you avoid poorly structured terms, end of lease penalties and all the ways you pay more for your lease than you should.
Rent your mobile equipment
Renting is a temporary solution, but many customers are taking advantage of it until they can purchase new equipment. The current rental market, though, is absorbing spill-over demand from companies in line for new equipment. Depending on your current needs, and equipment availability, renting equipment might be the best option for your fleet. A strategic fleet consultant with Fleet Team can help with negotiations and financing strategies or can find mobile equipment rentals as needed, if this is the route you wish to take.
Look at used equipment
Like renting equipment, there is an entire market of used equipment available to help you in your time of need. Like the rental market, the demand has shifted from new to used equipment to try and backfill that need for new equipment – and pricing has soared to near new levels. Fleet Team manages 14,000+ assets in the US and Canada and always has equipment coming off lease that can be re-purposed to new clients. We have monitored repairs and maintenance on these off-lease vehicles and know what type of economic life is left without guessing – and without having to charge inflated pricing. This is an option to help you get over this supply chain hump until lead times for new equipment becomes more manageable. Our strategic fleet consultants bring years of expertise regarding several types of equipment, brands, and suppliers and can help you navigate the sea of options for used equipment.
Whether you decide to right-size your fleet, look at other options for suppliers or OEMs, want to lease, rent, or purchase used equipment, Fleet Team will help you skip the line, rather than wait.
Let us build resilience and flexibility into your material handling operations. We have been advising our clients of different options while mitigating costs with the limited resources available during this problematic time. If you are being asked to wait in line, do not. Your organization cannot afford to. While this issue will not go away overnight, Fleet Team is prepared to help with a variety of options for you, while controlling your costs.
Here’s to helping you get to your lowest total cost of ownership even when the supply chain is a mess. Do not wait in line, contact us today!