Original equipment manufacturers and their dealers are continuously evolving to become one-stop shops for their customers’ equipment needs.
The continuously challenging operating landscape is prompting several original equipment manufacturers (OEMs) to look at ways of improving their businesses. One thing that comes to mind is the drive towards one-stop shops, meaning that they can cater for all their customers’ needs, all in one place.
OEMs continue to spread their wings as far as the needs of the fleet owner are concerned. They have since evolved from just being conventional designers and manufacturers of products. Of course, a good product is still relevant in today’s marketplace, but service is rapidly overtaking product offerings as the primary criterion customers look for when choosing where to do business. This trend has naturally led OEMs and their dealers to offer comprehensive product and service offerings under one umbrella. There are definitely several advantages for both the supplier and the customer in this type of arrangement.
For example, at a time when banks are reluctant to finance yellow metal equipment, many OEMs and their dealers now have in-house finance programmes to allow their potential customers to purchase the equipment they need. The advantage is that equipment suppliers understand their customers better than banks. They can control the process and can offer the client a complete value proposition without relying on a third party.
Many equipment suppliers have also extended their services to include insurance. As they understand the importance of equipment uptime better than third party insurance houses, they ought to offer better turnaround times for claims.
Meanwhile, telematics technology is fast becoming more and more important to the yellow metal equipment industry, and it could soon become the default standard for all heavy machinery. Previously, OEMs resorted to outsourcing these services to external manufacturers, but over the years, we have seen several OEMs such as Caterpillar and Volvo Construction Equipment, to mention a few, resorting to in-house telematics solutions.
There is also a growing move towards proximity detection systems, especially in South Africa due to the recent promulgation of legislation compelling the use of this technology on opencast mines. Traditionally OEMs have never offered this technology. They have always partnered specialist suppliers of PDS technologies, but from the recent conversations I had with several OEMs, this might change. I have heard several OEMs who have already invested in in-house research and development programmes to be able to manufacture these technologies.
The one-stop shop model for equipment suppliers, for me, is a good model that ensures that they can offer a multitude of services to their clients. The idea is to provide convenient and efficient service and also to create the opportunity for the companies to sell more products to customers. For me, this is the way to go.