Capital Equipment News August 2017

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CAPITAL EQUIPMENT NEWS AUGUST 2017 2
EDITOR'S COMMENT
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
CHANGING MATTERS OF IMPORTANCE
Munesu Shoko – Editor