How local assembly can increase speed to market
Dismantling products and shipping them as knocked-down or semi-knocked down equipment has the potential to reduce time to market and give an OEM the chance to grab market share. The trend towards dismantling product before shipment has evolved over the years and logistics companies are playing a key role in this effort.
For manufacturers serving fast-moving industries like construction, speed is of the essence when it comes to responding to the demands of end customers in markets such as the US and Europe, as well as emerging markets like China and India where demand is growing rapidly.
As OEMs chase increased market share, innovations in the outbound supply chain that can get their products to market quicker are of great importance. Shipping products as completely ‘knocked down’ or ‘semi knocked down’ units – and assembling them in the local market – is one means of achieving this. This can often complement RoRo strategy if an equipment processing centre with a supply of parts is in proximity to the destination terminal.
Why does local assembly improve delivery times?
Adam Weaver, business development manager at Keen Transport, a wholly-owned subsidiary of Wallenius Wilhelmsen, explains that customers are making increasing use of this strategy when it comes to importing construction machinery and other rolling machinery into the US.
“When there is an increase in demand, factories need to be able to produce equipment quickly,” Weaver explains. “But manufacturing an order in one continent and shipping it to another can take weeks, meaning an OEM is in danger of missing out on the sale.”
The solution? Build up a strategic amount of construction equipment in kit form at locations in the local market and assemble it to order. This can reduce time to market to five days or less, rather than weeks – enabling OEMs to capture market share – especially at times when demand suddenly increases.
Use an EPC as your hub for parts
WW Solutions equipment processing centres (EPCs) across locations in the US stock basic, knocked down construction machinery units. In the case of excavators, they add sticks, arms, booms and buckets as required to customise the machinery, speeding up delivery lead times. “Rather than having to schedule production overseas and ship it over, an order for a custom excavator can be dropped to an EPC in the US and sent out in a matter of days,” explains Weaver.
Another potential benefit to assembling knocked down products at an EPC is cutting down on stock footprint and parts processing at the OEM’s facilities, using EPCs as full service, strategic distribution centres.
Knocking down equipment and assembling it at an EPC also provides an important opportunity for a final quality check or fine-tuning before the equipment reaches its end destination.
Going the extra mile for customers
The trend toward shipping and assembling knocked down and semi-knocked down machinery looks set to grow as OEMs respond to customer demand ever more effectively. Over the last few years, manufacturers have moved to a ‘blended solution’ of both RoRo and container transport, combining diverse supply origins of spare parts.
OEMs looking for ocean transport and assembly of knocked down equipment can benefit from Wallenius Wilhelmsen’s global network of terminal services and ocean and inland distribution and processing centres, covering all aspects of an outbound supply chain.
“We can deal with the shipment right from the factory floor to the end customer,” says Weaver. “That can make the transition to a supply chain structure that relies on local assembly of knocked down equipment easier.
“For the manufacturer, that means unrivalled responsiveness to fluctuations in market demand for construction and rolling machinery. And because they only have to deal with one organisation, it means peace of mind, too.”
Why do manufacturers knock down equipment?
- Lead time reduction (market share gain)
- Finished goods inventory reduction
- Improved cashflow
- Cost and scaling flexibility
- Factory efficiency gains (by outsourcing non-core work)
- Improved end customer satisfaction.