By Gary Brooks, CMO, Syncron
2017 was a year for the heavy equipment industry to remember. With unexpected surges in demand due to an improved economy and natural disaster recovery, the heavy equipment industry is proving to be one of the most interesting sectors of the manufacturing space today.
And with 2018 now upon us, below are three key items that could play a big part in the space in the year ahead.
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 the 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 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 board in heavy equipment 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 placing 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 oftentimes 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.
If 2017 was any indication about the progress we can look forward to in heavy equipment, then 2018 will be one of the most intriguing years that the sector has seen yet.
About the Author
Gary Brooks is the CMO at Syncron, where he is responsible for delivering qualitative work with quantitative results to deliver breakthrough revenue performance. You can reach Gary at firstname.lastname@example.org, @SyncronCMO or on LinkedIn.