Each year, our State of the Industry issue looks at the top trends and technologies within the heavy equipment industries. We also dig into current and future market conditions, as well as regulations which may currently or in the coming years have an impact on how the industry will go about designing its equipment.
To get the best insights, we speak with executives from a variety of companies working in the industry—everyone from associations, to OEMs to component suppliers. Below are responses provided by Tate Johnson, President, Yanmar Compact Equipment North America.
Read all of this year's executive Q&As.
Supply Chain Disruptions
How have supply chain disruptions impacted your business over the past year?
Supply chain disruptions have impacted the entire compact construction equipment market by constraining the rate at which the industry can manufacture and deliver machines. We see the Industry Field Inventory Levels down as much as 75% for compact track loaders and mini excavators. These disruptions are driving expedite fees and material cost inflations.
If impacted, what has your company done to try to overcome this industry challenge?
We have increased our demand to our suppliers and have brought in additional inventory. We are exploring and acting upon countermeasures from redesigning long-lead components to in-sourcing components we have the capability to build but have historically purchased.
What industry challenges have these supply chain disruptions brought to light, and what can the industry as a whole do to overcome them?
The COVID-induced industry pull-back, followed by the rapid industry growth, exposed the importance of a well-rounded business that balances focus on areas from rental, to parts, to strategically important end-use customer segments. This situation also reinforced the criticality of dealer and OEM alignment and timely information sharing.
Data, IoT & Connectivity
What challenges remain for the continued adoption of data, IoT and connectivity related technologies or systems?
In Yanmar’s estimation, the key to data adoption and the next step of connectivity is turning data into easily digestible and actionable information. If done right, we believe this information will be beneficial to end user customers, dealers and OEMs and is the key for deepened relationships between all parties involved in the value stream.
Challenges & Opportunities
What are the biggest challenges facing the industry currently, or do you see the industry facing in the coming years?
The biggest challenge has to be the combination of the most rapid economic growth period since the mid-1960’s and component supply and logistics constraints. Tangible examples in our business are machines sitting in port waiting to be unloaded for 60-80 days and logistics costs that are as much as six times what they were 12 months ago. We believe that the pent-up demand from 2021 will carry into 2022, but we’re cautious about predictions for 2023.