Automotive Fleet, October 2017

There has been many changes in the upfitter footprint due to consolidation of locations business sales purchases and vendor growth We have seen a number of production delays from upfitters due to supply chain management unforecasted high volume increases in many industries integration of business models and shortage of qualified staff said Erculiani of Element This was also echoed by Crocker at Merchants Fleet Management There were a small number of upfitters that have seen an increase in lead time and response time due to activity and management changes However participating FMCs noted that communication from upfitters has improved Manufacturers transportation companies and upfit suppliers continue to improve communication regarding delays Timely communication is coming forward now more than ever said Kelly of LeasePlan USA However the key problem continues to be the increased volume of upfits that is taxing the resources of upfitters to complete units on time The entire upfit industry is still experiencing a supply demand problem It can take up to two to three months just to get a truck through ship thru and back to the dealer Add that to the three to four months for the production and that simply doesnt meet the clients business needs said Armstrong of Mike Albert Fleet Solutions This assessment was echoed by Erculiani of Element Because of high volume orders there were some upfitters who seemed overwhelmed at the number of orders at any one time said Erculiani As non traditional fleet OEMs increase the number of fleet units sold they are perfecting their OTD procedures For instance there has been an overall increase in Nissan orders Nissan has put significant effort into improving upfit visibility in working with their suppliers making system improvements and overall having a true upfit process in place In 2017 Nissan upfit orders felt very much like Ford GM and FCAs ship thru process This was timely as Nissan orders increased by as much as 300 said Erculiani of Element The participating FMC survey partners cited more fleets are ordering vehicles for upfitting beyond the traditional fleet suppliers of Ford GM and FCA This trend started to be noticeable in the 2016 MY ordering cycle Nissan has done a fantastic job at listening to Element and other FMCs and responding to this change in the industry by partnering with an upfitter These same customers used to order from the traditional Big Three and expect the same experience when it comes to timeframes and visibility to orders said Erculiani of Element Fleet Management However non traditional fleet OEMs still have more progress to make The Japanese and Korean manufacturers still have a long way to go in modernizing their systems to adequately provide status at every movement Unfortunately our clients live in an Amazon world where instant exact status is expected said Armstrong of Mike Albert Fleet Solutions While there may not have been significant upfitter related issues this model year problems did arise when OEMs did not adequately communicate changes to vehicle specifications that impact the installation of an upfit package A change in vehicle specs can cause delays through an upfitter especially if the upfitter is not aware of the changes Vehicle configuration and new technology and safety components incorporated into a vehicle by the OEM can require reengineering for the upfit package If a client has requested a change after the initial upfit was approved and parts were ordered delays may occur said Bill Gooden vehicle upfit consultant for LeasePlan USA Some upfitters have annual plant shut downs which in turn increase OTD The complexity of the upfit requirements can impact OTD In addition the relationship that the manufacturer has with their approved upfit source is important said Carson of Union Leasing Although some manufacturers feel they should not be accountable for upfit delays the end user often sees it differently A fleet best practice is to anticipate the OTD and manage to that estimate Fleets look to the manufacturer and the FMC to get their inventory within the communicated delivery estimate when originally selecting vehicles Increased Use of Pools One ongoing factor that is helping to stabilize OTD delivery times is the increased use of OEM pools and upfitter bailment pools This past year Element has seen an increase in customers ordering pool vehicles either through a customer pool process or utilizing a bailment pool process said Erculiani of Element There has been a 3 to 4 increase in pool ordering Crocker of Merchants noted that there has been an increase in upfitter bailment pool interest among fleet managers as a way to reduce lead time in place of factorydirect orders Visibility on bailment pool vehicles is also an opportunity that we would like to see OEMs focus on more closely said Crocker Union Leasing is a strong proponent of the use of OEM pools The use of manufacturer pools positively contributed to more timely delivery for some of the trucks and vans that Union ordered Some of this was planned by Union in advance for larger clients utilizing common vehicle types and some a result of manufacturers who were willing to allocate advance inventory supply to fleet said Carson of Union Leasing Toyota was one of several OEMs that was an early leader in the creation of pool vehicle availability which helped to improve its OTD delivery times Toyota continues to show the most improvement in OTD because of their expansion of the e pool availability said Erculiani AF AUTOMOTIVE FLEET I OCTOBER 2017 24 TRUCK 2017 ORDER TO DELIVERY TIMES TRUCK MODELS 2017 MY OTD DAYS 2016 MY OTD DAYS CHANGE DAYS 2017 Chevrolet Colorado 64 81 17 2017 Chevrolet Silverado combined 65 66 1 2017 GMC Sierra Combined 70 76 6 2017 Ram combined 79 102 23 2017 Ford F Series F 150 F 250 F 350 79 86 7 2017 Toyota Tacoma 82 77 5 2017 Toyota Tundra 93 71 22 2017 Nissan Titan 95 100 5 SOURCE AF RESEARCH DEPT GOODEN LeasePlan USA 18TH ANNUAL OTD SURVEY PART 1