Automotive Fleet

OCT 2013

Magazine for the car and truck fleet and leasing industry

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Page 17 of 81

MARKET TRENDS BY MIKE ANTICH 10 Ways to Further Improve OTD A ll OEMs have been proactive in providing order-to-delivery (OTD) status updates on feet vehicles in transit. In addition, feet management companies have launched a multitude of enhancements to their abilities to track OTD for ordered feet units. However, there is still much more that can be done. Here are 10 recommendations on how to further improve OTD times: 1. Provide More Information on Material/Quality Holds: "Currently, when there is a material/quality hold on a vehicle, we are not always notifed of the type of hold that has been placed and when the issue is expected to be resolved. Typically, if we request an ETA for resolution for a specifc vehicle, the OEMs cannot provide this to us. Although we are able to identify and inform a customer of a delay, we are unable to accurately set our customers' expectations, which results in customer frustration," said Cindy Gomez, director of vehicle acquisition services for Donlen. 2. Rectify "Rush" to Market with New Models: "It appears that the push to get new models to market by some automakers has overshadowed the rigors of up-front testing prior to production startup. Tis has meant that quality issues are frst being identifed only afer vehicles are built, resulting in a lot of pre-delivery repairs that delay shipment to the dealership. Our hope is that the OEMs have recognized the enormous costs and customer satisfaction issues associated with that practice, and will rectify their approach going forward," said Jan Freund, director, manufacturer relations for Wheels, Inc. 3. Adjust New Model OTD Expectations: "When a new model or a redesign is released, reset lead time expectations with customers to better prepare them. We all know quality holds and post-production inspections need to happen to ensure a safe vehicle is delivered. Building this time into the published lead times with new models or redesigns, instead of continuing with previous model-year lead times, would be benefcial," said Candice Groth, manager, factory ordering, and vehicle information center for GE Capital Fleet Services. 4. Provide Better Forecasting Tools: "Te OEMs need to provide more attention to the growth in the feet segment with proactive steps in forecasting order volume for particular models. Having this information prior to order placement will help OTD outcomes as well as those situations where demand exceeds supply at model close," said Elizabeth Kelly, director of operations, vehicle acquisitions for LeasePlan USA. 5. Place Orders Earlier: "I would encourage feets to place orders as early as possible to avoid potential risks of delayed production due to high demand of certain popular models or 12 AUTOMOTIVE FLEET I OCTOBER 2013 quality holds. Te retail market is gearing up, which could afect feet allocation, create longer lead times, and slow shipments even further," said Freund. 6. Create More Visibility for Ordered Products: "We would like to be able to ofer our clients more visibility into all stages of the vehicle supply chain, such as component ordering, shipping constraints, licensing regulations, restrictions, and potential delays," said Tim McHugh, vice president, supply chain & compliance for ARI. 7. More Processes & Technology Investments to Improve OTD: "Although many OEMs have made big strides in production management and information sharing, many critical players still need to make appropriate investments to processes and technology. We continue to see generic lead times with wide ranges that never change throughout the year, particularly with imports. Tere are always changes through the ordering cycle and we must adapt to and adjust time frames to appropriately set expectations for the customer and modify any replacement schedules," said George Kokos, manager new vehicle acquisition for PHH Arval. "Likewise, ARI recognizes the opportunity to introduce more sophisticated processes and advanced supply chain tools. "We have short-term goals to ofer more efective management of the vehicle supply chain, especially for complex feets, through advanced technology. Our objective is 'Turn Key' delivery, which means vehicles are ready to work with the licensing, title, and decals in place," said McHugh. 8. Maintain Ongoing Continuous Improvement: "Manufacturers need to continuously improve all areas of forecasting, scheduling, production, upftter communication, logistics, and provide better status and exception reporting tools," said Jim Tangney, VP of vehicle acquisitions for Emkay. 9. Increase the Dealer Network: "We are beginning to see an increase in the number of dealerships for the frst time since 2008, when the industry shed about 20,000 dealers. Texas, California, and Florida have seen the greatest uptick of new dealerships. We are also seeing more dealers for the import models, but they still total in the hundreds compared to several thousand dealerships for the domestics," said Freund. 10. Integrate Logistics with Order Status Data: "Te manufacturers need to integrate the status information they receive from their newer logistics systems and convert that data into what the FMCs receive in our daily status feeds. Tis will improve real-time data to be provided for each vehicle," said Tangney. Let me know what you think. AF

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