Capital Equipment News August 2017

EDITOR'S COMMENT

CHANGING MATTERS OF IMPORTANCE

I recently had a conversation with a senior representative of a big international original equipment manufacturer (OEM) who reflected on the changing matters of importance for capital equipment fleet owners. Gone are the days when so-called established brand names meant more sales and reinforced market shares. We are way past the era where proven quality of a product did much to influence buying decisions of equipment owners. In today’s operating environment, quality and fame alone are not enough to influence buying decisions. As you will see in the Aftermarket Feature in this edition of Capital Equipment News , we have reached a golden age of services, and to survive and prosper, the capital equipment supply chain is transforming into a service-centric sector, moving away from just supplying products to offering end-to-end solutions. Although companies still push products, there is now a bigger focus on delivering the value that customers get out of using those products. In my recent conversation with a big fleet operator who runs in excess of 300 machines, he concurs that, for him, aftermarket support comes before the product. He reasons that 90% of his buying decisions are solely influenced by aftermarket support, and the remaining 10% revolve around all other conventional considerations such as fuel efficiency and product quality, to mention a few. For him, a so-called quality product is only as good as its service. There is no point in having an expensive piece of machine that spends 50% of the time standing in the yard because the dealer cannot replace a filter on time, for example. Moreover, aftermarket has since

evolved. It’s no longer just about parts availability and fulfilling maintenance obligations. Customisation is one key buzzword currently doing the rounds in today’s equipment business. Customisation means understanding what the end user’s needs are, and being able to modify the product or solution to meet the particular requirements. What forward thinking OEMs and their dealers are doing right is placing a strong focus on identifying different tiers in different market segments. For example, in rental, the market starts from fleet owners of two machines through to those who operate as many as 2 000 units. It is ideal to segment these tiers accordingly because the needs of a big plant hire company are very different from the essentials of an owner of two machines. Equally, the needs of a company that rents out equipment to mining clients are different from those of a company that hires its equipment to a general construction contractor. The changing face of the market has also transformed the way in which OEMs and their dealers interact today. Dealers have since ceased to be just selling agents for OEMs. They have become valued business partners, trusted advisors to the OEM in all matters relating to aftermarket service, as well as crucial research and development projects. In a nutshell, fleet operators of today are concerned about the equipment supplier’s ability to maximise their uptime and production efficiency. Equipment sales are no longer just about the product, they are about the total value proposition, ranging from preventative maintenance and service agreements to uptime, fuel efficiency, financing and training. b

Munesu Shoko – Editor

capnews@crown.co.za

@CapEquipNews

CAPITAL EQUIPMENT NEWS AUGUST 2017 2