Our world is quickly changing, and with it, original equipment manufacturers (OEMs) are realizing that on-time delivery is essential to their business model. What cost-savings could be provided when OEMs have their parts on-time?

EFFICIENT PRODUCTION LINES

When manufacturers deliver on time, OEMs can continue production on schedule.

During the past two years, significant supply chain disruptions have caused bottlenecks in many large OEMs production lines. Suddenly OEMs have hundreds of thousands of dollars worth of equipment sitting on the production floor, waiting for one final part to be installed. Machinery that is taking up manufacturing capacity, and costing OEMs in utilities and warehousing fees.

The average manufacturer confronts 800 hours of equipment downtime per year. That’s 15 hours per week! That’s manpower and resources that could be allocated elsewhere. While there could be many reasons for downtime on a production line, waiting on a supplier delivery shouldn’t be one of them. Bottlenecks in OEM production lines become costly very quickly. All at once you have orders that are halted, labor that is waiting around to work, and machinery that needs to be stored.

Unplanned downtime costs industrial manufacturers as much as $50 billion per year.

So how can OEMs avoid costly downtimes?

Plan parts purchasing with ample forecasting. Include wiggle room to ensure you have a buffer.
Partner with manufacturers who prioritize on-time delivery.
Manage production lines to ensure that your workforce is working efficiently.
Train employees in new skills, then your production team is more flexible if you need to shift duties.
Plan for contingencies. Be prepared when things go wrong, so when something happens you can quickly adapt.

strong customer experience

Lack of on-time delivery can cost OEMs more than just production downtime. As technology advances, so does the customer experience when purchasing equipment. Today’s customers are living in a ‘right now’ world, and many customers expect fast, and accurate, delivery.

Consumer surveys show the importance of customer experience in equipment purchases, and on-time delivery is a critical piece. On-time delivery of products and services is essential for customer satisfaction and loyalty. By partnering with manufacturers who provide on-time delivery of parts, OEMs can ensure that their customers receive their orders on time, reduce waiting times, and enhance their overall experience. This helps build trust in the OEMs brand, ultimately leading to increased sales and improved customer retention rates.

61%

of online shoppers will pay extra to get their purchase as soon as possible.

86%

are willing to pay 12-18% more for a product if they receive good customer experience.

When OEMs have their parts on time, production lines run efficiently, and they can ship their product out to customers when they expect it. Limit delays in your supply chain- your customers will thank you.