Capital Equipment News February 2020

EDITOR'S COMMENT

CHANGING PRIORITIES

I recently had a conversation with a senior executive of an established international original equipment manufacturer (OEM) at Mining Inda- ba, who reflected on changing matters of importance for capital equipment owners. She is of the view that – above all other factors – aftermarket service has become a key parameter in influencing customers’ buying decisions. As you will see in various Materials Handling articles in this edition of Capital Equipment News , the market has reached a golden age of services, 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 a bigger focus on delivering the value that customers get out of using the products. In my recent conversation with a fleet operator who runs in excess of 300 machines, he told me that aftermarket support is his prime consideration, well ahead of the product itself. About 90% of his buying decisions are influenced by aftermarket support, and only 10% based on other conventional considerations such as fuel efficiency and product quality, among others. For him, a product is as good as its service. There is no point in having an expensive piece of machinery that spends 50% of the time standing in the yard due to the dealer’s failure to replace a filter on time, for example. In fact, aftermarket has evolved. It’s no longer just about parts availability and fulfilling maintenance obligations. Customisation is one of the top trends

in today’s capital 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. Forward thinking OEMs and their dealers are 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 customers accordingly because the needs of a big plant hire company are completely different from the fundamentals of a small company that operates two machines. On the other hand, 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. Dealers are no longer 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

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CAPITAL EQUIPMENT NEWS FEBRUARY 2020