Machinery Supply Chain Disruptions in the Aftermath of COVID-19

The COVID-19 pandemic has had a far-reaching impact on the world, including many crucial supply chains. That’s no secret or surprise to anyone. What may come as a surprise is the pandemic’s specific impact on the machinery supply chain. Indeed, many businesses find themselves facing long lead times when ordering new machinery, or even trying to find parts to repair existing machines. These difficulties continue to persist, even as many of the world’s economies are recovering.

Understanding the pandemic’s impact on the machinery supply chain and the steps you can take to limit COVID-19’s impact on your business is key to weathering the storm. Let’s explore the ways the pandemic has impacted the heavy machinery industry and strategies you can employ to ensure business continuity despite the current challenges.

The pandemic brought a screeching halt to machinery manufacturing

As the pandemic spread across the globe and social distancing rules went into effect, many heavy machinery manufacturers were forced to halt production to protect their employees. These halts occurred well before the United States saw its first cases of COVID-19 as many machinery brands manufacture their products overseas in countries like China who were among the first to be impacted. Brands like Komatsu, KPI and Morooka manufacture their machines overseas, and experienced significant slowdowns or complete shutdown of production lines. The reduction in manufacturing significantly squeezed the available supply of new machinery.

Fortunately, early in the pandemic, demand for new machinery also waned as many other industries were also forced to halt their operations. This led to fewer orders for new machines and a manageable balance between supply and demand across the machinery industry.

Recovery has led to skyrocketing demand and unparalleled lead times

Unfortunately, the manageable supply and demand balance would not last. As more and more citizens began to receive the COVID-19 vaccine, economies began to see swift recovery. Businesses across all industries began to ramp up operations to pre-pandemic rates. This led to an explosion in demand for materials and machinery across the U.S. and all around the globe.

For machinery manufacturers, meeting the skyrocketing demand has proven all but impossible. The materials and time needed to build machines are still in short supply, and manufacturers face significant backlogs in order fulfillment, even as the demand continues to rise.

The inability of machinery manufacturers to meet demand swiftly has led to significant lead time for new machine orders. Orders that used to take days or weeks to fill are now predicted to take months. Machinery dealerships continue to have empty showrooms.

Take a strategic approach to your machinery needs

While recovery from supply chain issues is coming, experts predict these issues will continue to plague most industries throughout the rest of 2021. However, there are steps you can take to limit the impact these issues have on your business. Your first step should be to consult your distributor to discuss your specific machinery needs and potential lead time concerns.

At Road Machinery & Supplies Co., we can help you manage supply chain issues in several ways, including:

• Preplanning future orders: We know that predicting your organization’s future machinery needs isn’t always easy. However, the more planning you can put into the future, and the more time you can give a machinery order, the better you can manage the current supply chain. Our experts can help you review your future machinery needs and place orders now for machinery you will need months down the road.
• Exploring alternative options: A new machine may not be the only solution to keep your operations running. We can help you explore rental, used or refurbished machinery options that can fill the gap until your needed machinery can be ordered and delivered.
• Developing preventive maintenance programs: Now, more than ever before, it is critical to keep your current equipment operating at peak performance. We can help you find a service or parts partner to keep your current fleet of machines up and running as long as possible. This will hopefully help fill the gap between your future need of new equipment and the readily available supply needed to fill that need.

If you are interested in learning how to traverse the current supply chain issues in the machinery industry, RMS can help. Give us a call to learn more or download the RMS Rentals Guide to explore available options.

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.