Among the high-volume intermediate-size fleetcars, the Dodge Intrepid, for the second year, achieved the fastest average over-to-delivery (OTD) time of 40 days during the 2000-model year, an improvement of four days from last model-year. The Ford Taurus and Chevrolet Impala were neck-and-neck with average OTDs of 59 and 60 days respectively. Another model that achieved a respectable improvement this model-year was the Pontiac Grand Prix, which reduced its delivery time an average of nine days to an average 64-day OTD.

These findings are based on an annual survey conducted by Automotive Fleet magazine, which tracked OTD for high-volume fleet vehicles based on data provided by five fleet management companies: ARI, Associates Fleet Services, GE Capital Fleet Services, PHH Vehicle Management Services and Wheels. Altogether the study tracked 191,000 new-vehicle deliveries from Oct. 1, 1999 to June 30, 2000. The vehicles selected for benchmarking are those that had a minimum of 1,000 units registered with commercial fleet customers and some all-new models.

For the purposes of this survey, car OTD is calculated from the day an order is placed with a factory to when the vehicle is delivered to a dealer (not driver pickup). Truck OTD is calculated from order placement to delivery to an upfitter, or, if no upfitting is required, to a dealer. The time spent at an upfitter was not included in OTD times.

Commercial Fleet Managers’ Feelings Mixed on 2000 OTD
If you ask Jacqueline Porter how she feels about fleet vehicle order-to-delivery (OTD) times, she will tell you her feelings are mixed.

“Sometimes it goes as smooth as a clock, and other times it’s impossible,” said Porter, who is corporate risk manager for Block Communications in Toledo, OH.

Other fleet managers talk about shipping delays that took place with 2000-model vehicles.

“It’s forced us to rely more on bailment pools and out-of-stock purchases,” said Brett Quigley, who oversees 4,371 vehicles as corporate director of fleet for U.S. Filter in South Bend, IN. “Order-to-delivery time took six to eight weeks last year, but this year we’ve had vehicles take up to two months just in delivery time, and that’s not including build time.”

Fleet Management Companies See Varying OTD Improvement
“The manufacturers have touted what a wonderful job they’ve been doing,” said Jim Creighton, vehicle acquisition and distribution manager for ARI, who has been doing statistical analyses on OTD on a quarterly basis.

“They’ve had nowhere to go but up, based on their performance last year. I think they’re all doing an excellent job of building the vehicles faster, but where they’re frustrated, our customers are frustrated, and in turn we’re frustrated, is in the performance of the transportation system, either the rail carriers or the over-the-road carriers. They all have their solutions as to how they’re going to make this better. They are all doing a better job of building the vehicles faster. Our statistics show that overall DaimlerChrysler is building vehicles faster than anyone else is. But their transit times are longer than their production times. They can build a vehicle in 18-21 days, but then it may take them another 20-24 days to get it somewhere. And that’s very frustrating.”

 

Creighton said that from a percentage standpoint, GM has made the greatest strides in improving its order-to delivery times. “But their numbers were so poor that they had nowhere else to go. And they’ve admitted that to us,” he said. “We’ve had the manufacturers in talking to us, and the numbers they’re touting to us, I can back into. They talk in weeks, I like to talk in days.”
“The vehicles we try to focus in on are the mid-sized sedans, the Tauruses, the Impalas, the Intrepids, our highest volume vehicles,” Creighton said. “And again, overall DaimlerChrysler does a better job on order-to-delivery. They do an excellent job on order-to-shipment. But if you look at the time from when the vehicle is shipped to when it’s delivered, they seem to have just as many difficulties as everybody else does. But they build the vehicles so fast that their overall times are shorter. Ford is middle of the pack, and GM has made the greatest improvement over last year.”

 

Linda Tiberi, manager, motor company relations, for PHH Vehicle Management Services in Hunt Valley, MD, has seen order-to-delivery times vary widely from one manufacturer to another, and between cars and trucks.

“We have seen improvement in some car lines,” Tiberi said. “But with truck lines, OTD times were much worse. I think it was just a supply-and demand issue, especially with popular engines.” Tiberi points out that order-to-delivery also varies seasonally.

“The trend we saw this year is that there are certain times of year when deliveries slowed up,” Tiberi said. “That’s mainly because of shipping, and the rail car shortages, as well as the bottlenecks that occur when the heavy fall deliveries are taking place, which happens again in the spring. The manufacturers seem to clean up their backlog during the holiday shut-down at Christmas time. Then things go rather smoothly until you get into late spring, when that backlog occurs again.

“We’re looking forward to some significant improvements in the 2001-model year, when the manufacturers embark on new initiatives such as the initiative Ford has with UPS,” Tiberi said. “DaimlerChrysler has a similar initiative.” Cathy Teague, supervisor, order management for PHH, sees a need for manufacturers to continue to improve order-to-delivery time and dependability. “Order-to-delivery time not only needs to be faster, but it needs to be reliable,” Teague said. “I think to a client reliable is just as important as speed. They are willing to wait an extra week or so for vehicles if they know up front how long it’s going to take. They don’t like surprises. They like to be able to plan ahead.”

Michael Morris, manager, manufacturer relations & ordering services, for GE Capital Fleet Services, feels that reduced transportation capacity has resulted in an overall increase in order-to-delivery times.

“One trend I have seen is the number of trucks purchased taking up the lift capacity,” Morris said. “Obviously, an Expedition or Excursion is going to take up the place several Escorts used to take up. We could draw the same scenario for any of the manufacturers, whether it be Durangos and Neons, or Suburbans and Cavaliers. So, that severely reduces capacity.”

Morris also feels that increased order-to-delivery times for the 2000-model year were adversely affected by inclement weather. “One reason for increased order-to-delivery times was the floods in the Southeast, which locked in rail assets and slowed the delivery process,” said Morris. “All the domestic manufacturers issued statements about this. They said the New Year shutdown would let them get caught up, which they did partially, but they’re not completely caught up.”

Michael Wirt, senior vice president of operations and services for LeasePlan, said order-to-delivery times for GM standard fleet sedan products have improved.

“And there is minor recent improvement in order-to-delivery time for GM light trucks within the last 45 days,” Wirt said. “I think what’s happening is that at the retail level demand has somewhat softened and production capacity has somewhat improved. The exceptions to that are ¾-ton and up, 2500 and 3500 series. That’s as slow and inconsistent as it’s ever been.”

Ford standard fleet sedan product and standard light pickup product, such as F-150s, performed about the same as last year, which was better than average, Wirt said.

 

“The 1998 model was probably the best year Ford ever had; we were getting cars at the dealer in less than three weeks,” he said. “It hasn’t been that good, but it’s better than normal. With DaimlerChrysler, OTD averages depend on the mix of models in the order bank. They average equal to or slightly better than Ford for standard fleet sedan product.”

Donna Jordan, vice president of purchasing for Associates Fleet Services, said she was pleased with DaimlerChrysler’s OTD this year.

“DaimlerChrysler continues to deliver vehicles to the dealers quickly,” she said.

Jordan said Associates is looking to improvement with Ford’s joint venture with UPS called UPS Autogistics, which will re-engineer Ford’s transportation network to optimize speed and accuracy in the shipment of all Ford products. It will track the vehicles in much the same way UPS tracks its packages, using barcodes and the Internet.

According to Jordan, Ford has seen its lead time stretched this year, as a result of transportation delays. “When you look at the Taurus, we’re experiencing 18 more days to delivery this year,” she said. “We’ve noticed that DaimlerChrysler has seen a little slippage in its times, but not significant. In general, light-duty trucks continue to have slow delivery time, due to demand exceeding supply for at least a portion of the year.”

Gino Fontana, director of purchasing operations for Wheels Inc., said that this year, for the most part, the vehicle OTD changed very little compared to last year.

He said he was curious to see if Ford’s and GM’s early order incentives help OTD for the 2001-model year.

“Maybe that will smooth out any potential bottlenecks for those two manufacturers this year,” he said.

Fontana said Wheels is tracking OTD by looking at the overall time this year.

“We’re taking a more broad perspective, not just how long it took the manufacturer to ship the vehicle, but tracking it to the point where it’s actually in the driver’s hands,” he said. “We have a 2001-model-year team with representatives from sales and marketing, purchasing, manufacturer relations, and our account management group. One of the team’s tasks is to build the right metrics around the total cycle time in the eyes of the customer.

“We’ve seen a dramatic increase in number of vehicle traces,” Fontana said. “Locating vehicles is cumbersome and time-consuming. We are looking forward to Ford’s Autogistics program. While we understand there will always be holds and delays, it is important that the manufacturers provide accurate and timely information along with estimated availability.”

GM Cites Five Order-to-Delivery Fleet Initiatives
Dave Hansen, general manager of GM Fleet and Commercial Operations, said GM’s 2001-model early order incentives will help improve delivery times.

“For this ’01 cycle, we did want to signal to people that GM is serious about the fleet and commercial business,” he said. “That’s why we’re out there first with our VX5 2001-model year national fleet incentive program. That’s why we’re out there first with our price assurance. And that’s why we have the $250 early ordering bonus. We want to let people know that we have availability, we’re ready to take orders early.” Hansen cited five other fleet order-to-delivery initiatives underway at GM:

1. GM implemented e-Fleet Immediate Product Availability Website. It contains an inventory of fleet specific vehicles that are available for businesses to order immediately through a dealer. “In addition, we have quick delivery pools of vehicles with standard fleet specifications for many of our customers,” Hansen said. “Second, it seems the rail situation has everyone’s attention.” He said GM is doing the following for its customers.
 Rail transits will continue to improve. The Northeast is returning to historical transits in the next six to 12 months and the Surface Transportation Board has put a halt on future railroad mergers.
 Haulaway carriers are adding capacity to GM fleets over the next couple of months to improve performance and reliability. The GM pool of railcars has been increased 20 percent to fleet customers.
 GM has put a dedicated team in place to review the transportation network daily, making adjustments and seeking alternative routes as needed.
2. Initiated locked production weeks for select customer orders. GM commits to specific and reliable build dates that allow customers to place orders for future sequencing.
3. Added order status information for customer access via the gmfleetworld.com website.
4. Introduced wireless order status and e-Fleet availability applications for the Palm VII hand-held computer.
5. Created the dedicated Customer Support and Order Management Teams within GM Fleet & Commercial Operations to track customer orders.

Ford/UPS Alliance to Improve Delivery Times Tom Kolakowski, manager, North American Vehicle Logistics, for Ford Motor Co., said Ford’s alliance with UPS, originally scheduled to take place in five phases, is ahead of schedule. (See AF article, April 2000.)
“We originally said it would take two to three years to get from an average delivery time of 14 days to a maximum of eight, but we’ve taken out half a day already,” Kolakowski said. The first two phases have already been launched, with phase one taking place at the Wayne, Wixon, Flat Rock, Dearborn, Michigan Truck Assembly, St. Louis, and Kansas City plants with destinations in the West and Southwest states; and phase two taking place at the Louisville, Kentucky Truck Assembly plant with destinations in the Southeast, West and Southwest states.
Kolakowski said phases three and four will be combined, covering the remainder of the United States and assembly plants in Canada. Phase five will cover Mexican assembly plants and dealers in Mexico and in Canada.

High Demand & Production Shifts Cause Some Ford Delays Dennis Baranik, fleet planning and strategy manager for Ford North American Fleet, Lease and Remarketing Operations, explained what caused slower OTD on various Ford models. “For the Super Duty and Focus, the fact that these were extremely hot products with a high demand caused strong backlog orders in the system,” Baranik said. “For the Super Duty, Econoline, and Club Wagon, these models had select commodity restraints resulting from a higher-than-expected truck industry that caused the number of days to go up,” Baranik said. “Capacity has been added for the 2001-model year, which should alleviate this situation from re-occurring.” Regarding Escort, Baranik said production was shifted from Wayne Assembly Plant to Mexico, and in addition to that, it had a late Job 1 date for the 2000-model year. “That caused the high backlog of orders, and also there’s longer delivery time from Mexico,” he said. Contour production was also shifted from Kansas City, Baranik said. “Product volume was reduced, which has also resulted in a high backlog of orders,” he said. “That and the longer delivery time from Mexico contributed to Contour numbers.”

 

 

 

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