If you’ve tried to acquire heavy equipment in the last 2-3 years, you know just how tough the market has been. Finding new equipment quickly and at a decent price has been difficult. The same is true for used equipment as operators have snapped up just about any functioning piece of machinery to fill gaps in their fleets. Maintaining equipment proved to be just as difficult, as quality replacement parts have been hard to come by for many types of machines. Preventive maintenance and repair efforts have been difficult for many operators, with availability and the rising costs of parts being major concerns.
This isn’t news to anyone, of course. However, the heavy machinery supply chain is continually in flux, making it important to remain updated on the current state of the supply chain, and the trends we are likely to see in the near future.
Comparing the state of the supply chain today to that of just a year ago reveals some interesting insights – some positive, others not. Let’s explore the current state of the equipment supply chain as well as the ever-important parts supply chain.
The current state of heavy equipment supply chains
In positive news, the equipment supply chain has seen steady improvement over the last 2 years. As factories have returned to full operations, more equipment has begun to roll off the assembly line.
Unfortunately, due to huge backlogs of orders, component shortages and shipping challenges, machinery is still hard to come by. Acquisitions for new equipment are out as much as 3 years from purchase date. Orders for custom equipment can be even more difficult to fill for many manufacturers. Lead times for custom machinery are currently averaging longer than before the pandemic.
The used equipment market remains highly competitive, with processes reaching unprecedented levels. With new equipment deliveries years away, and used equipment rarely available, many operators have been forced to run their machines for longer periods to keep up with demand – making good quality used equipment in working order hard to find.
Refurbishment of machines continues to be a best practice in many industries. Unfortunately, refurbishment, rebuilds and repairs – which are often done by companies in the 3rd and 4th quarter of their fiscal years – continue to pose challenges. Increasing demand for refurbishment, rebuilds and repairs has taxed vendors to the limit, leading to longer than average lead times for these services.
While lead times continue to shrink, albeit slowly, the same cannot be said for the process of heavy equipment and parts. Prices remain higher than pre-pandemic, and there’s little evidence to suggest a reversal in that trend anytime soon.
The current state of the parts supply chain
The parts supply chain shows a similar recovery to the machinery supply chain. Part shortages caused by shipping around the world that were caught up in the port backlogs have largely eased, leading to increased availability of many vital parts.
Unfortunately, while inventory shortages are easing, the rising prospect of a recession, higher interest rates, and rampant inflation have caused many suppliers to re-evaluate their inventory positions.
These factors have combined to create an environment where lead times for parts, while improving, are not likely to return to 2019 levels for some time to come.
Managing the on-going supply chain challenges
While on a positive trajectory, the supply chain continues to face strain due to the severe backlog and surging demand resulting from the pandemic. There are steps you can take to limit the impact these challenges have on your business, including:
Focus on maintenance
With lead times still lengthy, effective future planning continues to be a key strategy in keeping your operations up and running. Take stock of your current state and your future plans, and place machinery and parts orders as early as possible.
BudgetingThere’s no getting around the rising costs of machinery and parts. With that in mind, take stock of your budget and ensure that you have room for these additional costs.
New machinery can be hard to come by, but so can used equipment. Remaining flexible in your search for new equipment can help you explore options that fit most, if not all of your needs.
Work with an RMS expert
You don’t have to face supply chain challenges alone. Whether you need a new or used machine or replacement parts, our experts are here to help you identify strategies for navigating the current supply chain crisis. We work with many manufacturers and vendors across the globe, allowing us to source equipment and parts through various channels.
If you want help navigating the uncertainty of supply chains in 2023, contact us now and we’ll help you explore all of your available options.