Challenges Facing Construction Equipment Manufacturers in 2016During my conversation with Al, he had plenty of positive things to say about the state of equipment manufacturing and optimistic predictions to make for 2016, but he didn’t sugar coat things. At the start of another new year, construction OEMs face a number of challenges, some familiar, some new:
Top Construction Equipment Manufacturing Challenges
- Uncertainty: “The biggest challenge is the uncertainty in the market. There is uncertainty in almost every aspect of the construction equipment business. The housing market is good now, but there’s still uncertainty. There’s uncertainty in the oil and energy business, which affect building and construction.”
- Hiring: The struggle to find fresh talent in the manufacturing industry is a struggle carried over from previous years and one that will continue into the foreseeable future.
- Product Support/ Increasing Efficiencies: “Efficiency is a challenge; everyone’s looking for ways to be more efficient. The use of technology in product and customer support is a big way manufacturers can increase efficiency for themselves and their customers. For example, if contractors can monitor a mixed fleet in one location rather than on each manufacturer’s website, they’ll be able to operate more efficiently.” In addition, strong product support programs strengthen the equipment triangle: the mutually beneficial relationship among contractors, distributors, and manufacturers. Contractors look to distributors and manufacturers for more efficiencies, which will drive a better operating fleet, which should provide profits back to all three parties.
- Keeping up with Tier 4: “You can’t talk about technology and challenges in equipment manufacturing without talking about Tier 4. For one thing, it’s tremendously expensive. It’s a big training issue within the industry and it’s really just getting started. The reality is, because it adds 20% cost to the machine, it’s been deferred, but it’s still a primary item that a lot of contractors are trying to deal with.”