What should be done to improve order-to-delivery (OTD) for the 2019 model-year? Here are 15 recommendations from nine subject-matter experts on how to further improve OTD times:
1. Place Orders Earlier:
“Fleets should place orders early to avoid potential risks of delayed production due to high demand of popular models or quality holds. By placing orders earlier, it allows more time to ensure the product can be scheduled, built, shipped, upfitted, and delivered in the timeline required,” said Cindy Gomez, VP of vehicle acquisition services for Donlen.
2. Improve Forecasting & Inventory Control:
“The largest win to improve OTD is proper forecasting and inventory control. Assessing the most popular models for the previous five years for all manufacturers would allow for enough allocation for the production of units,” said James Crocker, director of operations for Merchants Fleet Management.
3. More Consistent and Timely Communication:
“As we’ve seen in prior years, the stronger economy likely had a significant impact on railcar availability this year which in turn affected order-to-delivery times. While we cannot influence that availability, consistent and timely communication throughout the entire supply chain can enable more effective planning and implementation of strategies to significantly reduce the impact these delays have on the client’s business,” said Partha Ghosh, director, North American vehicle supply chain for ARI.
4. Use Onboard Vehicle Connectivity to Track OTD:
“With manufacturers moving to new connected vehicle technology, they need to think about how this can be leveraged to provide more detailed status information to FMCs so that it can be shared with customers,” said Jessica Krams, manager, vehicle order management for Wheels Inc.
5. Leverage Alternate Transportation:
“OTD would benefit from improved delivery methods that leverage alternate transport methods more effectively. In addition, better planning between OEMs, fleet management companies, and upfitters on projected volumes, timing of deliveries, and coordination with parts suppliers would help minimize upfitting delays,” said Nick Erculiani, VP, acquisitions lifecycle for Element Fleet Management.
6. Improve Ability to Anticipate Railcar Shortages:
“Nearly every spring, the manufacturers face an industry-wide railcar shortage that results in delivery delays. They need to do a better job of planning for this and using alternative solutions to help alleviate delays at the plants and ramps,” said Krams.
7. The Process of Transporting Road-Ready Vehicles to Dealerships needs to be Improved:
“Year-over-year, railcar shortages tend to be one of the major reasons that vehicles are delayed, and the market’s shift to SUV dominance is increasing this issue. BNSF Railway Co. responded to the increased demand for SUVs and planned to purchase an additional 1,900 large railcars equipped to transport double-layered loads of SUVs. Moves such as this will help to reduce OTD times, but continued efforts are essential to driving down these timelines in the ever changing landscape of new vehicle deliveries,” said Jim Tangney, vice president – vehicle acquisitions for Emkay.
8. Better Communication:
“The biggest gap in OTD is communication of what to expect. In most cases, clients can deal with the length of time factory orders take as long as they know when to expect them and can plan accordingly,” said Steve Armstrong, manager, vehicle purchasing for Mike Albert Fleet Solutions.
9. Improve the Ship-Thru Process:
“OEMs need to create better insight into the ship-thru process by providing regular status updates – especially for vehicles that are significantly delayed in ship-thru,” said Mary Jo Welch, assistant VP of new vehicle acquisition for Enterprise Fleet Management. “The current process requires us to repeatedly call to check on a vehicle once it has shipped from the factory because its status is unavailable in the OEM system. Receiving solid information and a resolution can take weeks if not months.”
10. Implement Initiatives to Reduce OTD for Vehicles Produced Internationally:
“Increase visibility to vehicles being shipped by vessel such as loading, departure, and arrival dates. This could be an internal telematics that the manufacturer can install and turn on and off like OnStar for fleet management companies while the unit is traveling overseas,” said Crocker.
11. Recruit More Transport Drivers:
“Recruiting additional drivers to facilitate medium-duty truck moves would positively impact order-to-delivery by adding more outlets for delivery of vehicles. This would reduce some of the transportation stress currently impacting OTD timeframes,” said Wayne Reynolds, manager, upfit design and consultation for LeasePlan USA.
12. Leveraging Data:
“We all need to leverage technology better to track and report on vehicle deliveries, so that we have better data to communicate accurate delivery dates and are able to provide constant updates on progress,” said Erculiani.
13. Use Bailment Pools:
“For time-sensitive needs, increase the use of upfitter bailment pools and those offered by the OEMs. When fleets have more urgent availability needs, other custom pooling solutions are sometimes pursued,” said Partha Ghosh, director, North American vehicle supply chain for ARI.
14. Maintain Ongoing Continuous Improvement:
“Manufacturers need to continuously improve all areas of forecasting, scheduling, production, upfitter communication, logistics, and provide better status and exception reporting tools,” said Tangney.
15. Improve the Driver Delivery Experience:
“This is a critical piece of the entire process. OEMs need to work more closely with dealers to help ensure timely and quality driver deliveries. Some OEMs recognize this and are working to educate the dealers and encourage them to participate in fleet deliveries; we’d like to see this happen more often,” said Krams.