Prepare Your Supply Chain Strategy for a Decidedly Different Ordering Cycle OPTIMIZE & MAINTAIN THE VEHICLES YOU DO HAVE
ROMY BRIA
Vice President Client Relations, Holman It is fair to say that recent ordering cycles have been unlike anything we have previously experienced. The entire automotive supply chain struggled with significant disruption. Although we’re beginning to see some supply constraints subside, there are still challenges, and we remain in uncharted waters as most fleets find themselves trying to catch up after nearly two years of extremely limited availability.
With many models still in limited supply, taking care of the vehicles you do have is critical. In all likelihood, your vehicles are poised to remain in service much longer than you initially anticipated and will likely require some additional TLC to keep them on the road as you await replacement units.
Start by re-examining your preventive maintenance (PM) strategy to better align with the reality that your vehicles will be logging more miles, incurring additional wear, and stretching their life cycle well beyond their original forecast. With life cycles extended, you’ll also want to review the services included in your PM schedules and, if necessary, add important services that typically occur later in a unit’s life cycle. Additionally, make sure you use full-service repair facilities (rather than quick lube locations) that perform a multipoint vehicle inspection to help identify potential issues early and avoid catastrophic component failures.
So what does all this mean for the outlook of this year’s ordering
BUDGET ACCORDINGLY
REASSESS YOUR CYCLING STRATEGY FROM A HOLISTIC STANDPOINT
Unfortunately, there’s no way around it. The reality is that the vehicles you order today are going to cost significantly more as compared to your last ordering cycle. Acquisition costs are up across virtually every segment of the industry. This sentiment holds true for the upfit sector as well. With an uptick in commodity (aluminum, steel, etc.) and component pricing, you’re likely to see an increase in upfitting costs as well.
cycle? Good question. With lingering uncertainty, it is more critical than ever to be proactive in your acquisition planning and budget allocation while also being prepared to adjust on the fly. To help you craft a comprehensive supply chain strategy for the year ahead (and beyond), here are a few key factors to consider.
As the supply chain begins to rebound, now’s a terrific time to take a fresh look at your overall fleet and cycling strategy. Ask yourself, how will supply chain delays and limited vehicle availability impact operations through all stages of the fleet life cycle—buy, drive, service, and sell? With many units remaining in service longer than originally anticipated, you’ll want to ensure you develop a holistic strategy that addresses issues that may arise throughout each phase of the vehicle’s life cycle. You may also need to adjust your operating budget to account for variables such as increased downtime, higher maintenance costs, and the inability to capitalize on a strong resale market.
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Given those factors, you’ll want to be proactive in your planning and budget allocation to ensure you’re well positioned for this ordering cycle. Also keep in mind, the window for ordering may be volatile, and you’ll likely need to reallocate funding quickly to meet a particular deadline. Maintain an open dialogue with your finance team and have a variety of options in place so you’re ready to adjust accordingly. BE PROACTIVE BUT PLAN TO WAIT While lead times and production delays aren’t as significant as they were several months ago, you still need to expect—and plan accordingly for—longer lead times for certain models. A good rule of thumb is to anticipate a minimum of six months to receive your vehicles.
2022-06-20 2:34 PM
