With the increasing demand and growth of the commercial truck and van segments – particularly among utilities and service industries – the percentage of upfitted vehicles is growing. Upfitters are feeling the pressure of increased demand. In recent years, the huge influxes of vehicles needing upfitting have left some upfitters, at times, overwhelmed.
In addition, as more fleets opt for vans to fulfill their fleet applications, van sales have exceeded OEM forecasted volumes. With certain models, end-user demand exceeded production capacity, resulting in longer lead times. In terms of pickups and SUVs, strong retail demand, coupled with lower fuel prices, have led to extended order-to-delivery times (OTD). In some cases, OEMs closed order banks early because demand exceeded allocation.
Another factor impacting OTD is that today many fleet vans are imported to the U.S. from other countries. Compact vans that are produced in Europe and shipped to the U.S. must clear customs and complete modifications, lengthening OTD. Manufacturers are sensitive to these delays and are implementing procedures to shorten the lead time on these imported vans.
The significant demand increase for vans over the past several years has caused lead times to become longer and that trend is likely to continue, unless there is an increase in production capacity or significant decrease in end-user demand. Less than adequate fleet allocation for popular van models has also created problems, especially when fleet orders get pushed to the next model-year, adding months to an order.
How Fleets Can Improve OTD
There are four key actions fleet managers can implement to improve OTD for the upfitted vehicles they order:
1. Order early: Fleets should place orders as early as possible to avoid potential risks of delayed production due to high demand of certain popular models, unanticipated quality holds, and transportation delays. The retail market remains strong, and that could affect fleet allocation, creating longer lead times.
Also, as the fleet manager, you should be open to re-evaluating your order cycle. For instance, consider staggering orders throughout the year to avoid some of the delays.
2. Closer consultation with your OEM, FMC, and upfitter to understand the anticipated lead time and overall production timeframes: OEM production time frames will vary, especially around start-up and build-out dates. Many times, OEMs move build-out dates forward, creating an inability to place orders and forcing fleets to scramble to locate out-of-stock units, result-ing in increased cost and potentially a chassis spec’ed a little differently than what was initially developed to fulfill the fleet application.
When upfit specifications are made after the factory orders have been placed, a ship-thru code cannot be added, the upfit must be done after it has arrived at the dealership, which can sometimes lead to a difficult coordination between the dealer and upfitter.
3. Collaboration and communication are crucial, but often underutilized: Upfitting a vehicle to perform a specific task is one of the more complicated aspects of fleet management. And, as such, it is an area fraught with opportunities to make mistakes. It is essential for fleet managers and suppliers to collaborate on upfits to ensure the upfitter can efficiently complete the job.
4. Use vehicle pools: For unplanned replacements due to accidents or other unforeseen circumstances, consider using upfitter pools versus buying out-of-stock to acquire vehicles. For time-sensitive needs, increase the use of manufacturer pools, such as GM eFleet, Ford Rapid Order Pool, Toyota Emmediate, etc. When fleets have more urgent availability needs, another option is to use a bailment pool. But, there are pros and cons to using a bailment pool. Using a bailment pool means the chassis spec will be generic and may not meet the exact spec that had been developed.
Planning is the Best Antidote
A fleet upfitting strategy to improve OTD must incorporate an effective vehicle replacement plan, leveraging an OEM’s incentive program, and using an upfitter with expertise matched to the fleet application need. Another important consideration is ensuring there is local OEM dealer support when selecting a chassis, so it is not inconvenient or requires significant travel to get OEM warranty support. Also, investigate the OEM’s service network before committing to a particular manufacturer to ensure your end-users have easy access to local service and repair facilities.
The upfitting process is one of the most variable aspects of OTD forecasting, since it is influenced by the complexity of the upfit. Strive to standardize your upfit packages as much as possible. Likewise, start the planning cycle early to leave adequate time for production, upfitting, and transportation. Upfitting a vehicle is a process that requires thought and consideration. Missed details can add up and cost fleet managers money, time, and work inefficiencies. Take the time to document lessons learned from upfitting a vehicle to minimize repeat errors the next model-year. In the final analysis, the basics always hold true – advance planning and early ordering are the most effective strategies to expedite the upfitting OTD process.
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Originally posted on Automotive Fleet