How Supply Chain Disruptions are Still Impacting Heavy Equipment

Recent events have wreaked havoc in the heavy equipment industry. During the pandemic, manufacturing of new equipment had been basically brought to a screeching halt due to lockdowns, the global computer chip shortage, and cascading issues with the global supply chain.

These events led to a huge lack of supply of new machinery globally, which left many construction and mining companies struggling to replace old equipment or add new equipment to their fleets.

Even more than two years following the start of the pandemic, the heavy equipment industry continues to face supply chain issues resulting in extremely long lead times for machine orders.

How have these supply chain issues impacted construction and mining companies?

In normal conditions, a constant supply of new machines replaces old stuff that breaks and isn’t worth fixing. Unfortunately, we are not living in normal conditions. Without the new machine supply, construction and mining companies have been forced to take drastic action to protect the health of their fleets.

Used equipment prices have skyrocketed, and vendors are struggling to maintain adequate stock to meet the demand. Many companies are struggling to find used machinery to replace equipment that has broken down or aged out of service. This is also the case for replacement parts – which are increasingly hard to come by. A constrained parts supply mixed with a constrained replacement machinery supply is created havoc in the heavy machinery market.

The lack of available machinery and parts have resulted in project slowdowns for many companies and has left others forced to delay or pass on projects entirely. At best, profit margins are squeezed as firms are forced to spend more on machinery than ever before.

Tips for navigating supply chain challenges

While there has been improvement in the supply chain, and new equipment manufacturing has started to pick back up again, the challenges are not yet over. While demand remains high for new stuff, there is still a major imbalance in the supply and demand equation. Backorders are still piled high, and manufacturers are struggling to fill orders.

As we wait for the supply chain to rebound, there are steps you can take to limit the impact equipment delays have on your operations.

Focus on maintenance

Now more than ever before, keeping existing machines running as long as possible is critical to operations. Without the ability to replace machines, maintaining existing equipment is imperative – the longer your equipment lasts, the longer you can go without having to search for replacement.

Focus on maintenance, reducing idle time, and keep all users trained on how to protect machines. Keep project plans as efficient and optimized as possible to reduce stress on equipment.

Proactive planning is critical

Advanced planning is key to minimizing the impact of supply chain delays. If you expect to need a new piece of equipment, proactively ordering it or sourcing it is important. Look at your operations both now and into the future to try to determine future equipment needs. Work with your vendor to determine the best timing and strategy for ordering the equipment you will need in the future.

Consider renting

Rental equipment is an often-overlooked solution to supply chain issues. Rental equipment may help you bridge the gap between your current and new equipment. Many vendors offer rental options, though these are in demand as well, making it important to act quickly if the need arises. Talk to your vendor to see if rental machines are available, and to determine if renting is a cost-efficient option

Explore all of your options

Some manufacturers may not be able to fill your needs as quickly or affordably as you would like. Consider alternative manufacturers, or explore other equipment options, such as a larger or smaller machine or a machine with a different feature set. This may not solve all of your immediate concerns but may help keep your operations afloat.

We are here to help

Navigating these challenges isn’t easy, but it can be helpful to have the assistance of an experienced vendor. RMS is here to provide the advice and guidance you need to limit the impact supply chain issues have on your operations. We also offer rental options to keep you going.

Call us today to discuss your specific construction or mining equipment needs.

A message from Vice President of Sales and Marketing Andy Schwandt: 

2021 has brought with it new challenges and supply chain issues across a variety of industries. Construction equipment is no exception. Click the video below to learn what you can do to mitigate these issues.

If you are considering a 2021 year-end purchase, act now! The longer you wait to make a purchase, the fewer options you may have due to low available inventory across in the industry. Making fleet decisions sooner will give you a wider selection of equipment.