Order-to-delivery (OTD) times, on average, improved slightly in 2012 compared to model-year 2011, which witnessed the March 2011 earthquake and subsequent tsunami in Japan, causing disruption of the U.S. automotive supply chain, resulting in parts shortages and delayed OTD times.

In 2012, there were a number of factors that impacted OTD including:

● Increased vehicle volumes due to continued industry sales growth.
● Manufacturer quality holds (tire and axle delays, etc.).
● Limited fleet allocation.
● Ongoing railcar shortages.
● Recalls.
● Parts shortages.
● Weather-related delays, especially
related to hailstorms.

“Overall, OTD times improved slightly in 2012. Although some models experienced increases, there were many models that improved or didn’t change,” said Cindy Gomez, manager of vehicle acquisition services for Donlen. “Some of the OTD delays that did occur, particularly early in the model-year, were residual effects of last March’s earthquake in Japan and the subsequent tsunami. As the model-year progressed, OTD times improved.”

Many of the issues that impacted OTD in 2011 were resolved by the time 2012 fleet deliveries commenced.

“OTD times for 2011 models were hampered, in many cases, by the parts supplier shortages caused by the tsunami in Japan. Now that suppliers are back up and producing, it has really improved the lead times for 2012-MY,” said Jim Tangney – VP of vehicle acquisitions for Emkay.

Most credit the proactive measures by OEMs in helping to ensure that 2012 OTD times did not increase compared to last year. Even with a consistent increase in order volume, trucks across the board improved, some by as much as a month.

“The vast majority of vehicles showed an improvement in the OTD timeframe. There were very few vehicles that did not show at least one day in improved delivery timing. This speaks volumes for the commitment the manufacturers have in improving the ordering experience for customers,” said Candice Groth, factory order and vehicle information center manager for GE Capital Fleet Services.

On the whole, OTD for 2012 went relatively smoothly. “We just didn’t see the kind of foreseeable and unpredictable high-impact delays in the past, relative to natural disasters, financial difficulties, labor agreements, and supplier or railcar issues,” said Rob Baran, department head, vehicle acquisition for ARI.

These were among some of the findings from Automotive Fleet’s 13th annual OTD survey. Six fleet management company (FMC) survey partners provided data for this year’s study:

● ARI.
● Donlen.
● Emkay.
● GE Capital Fleet Services.
● LeasePlan USA.
● Wheels, Inc.

The survey tracked deliveries from 121,953 new vehicles in the 2012 model-year, representing 103 models.

OTD times for cars were calculated from the day an order was placed with a factory to vehicle delivery to a dealer (not driver pickup). Truck OTD was calculated from order placement to delivery to an upfitter or, if no upfitting was required, to a dealer. The days spent at an upfitter were not included in truck OTD times. An industry average was calculated for each model tracked based on information provided by participating FMCs.

2012 Order-to-Delivery Times: Cars (44,467 Total)   
Car Models 2012-MY OTD (Days) 2011-MY OTD (Days) Change (Days)
2012 Chevrolet Impala 47 50 -3
2012 Dodge Avenger 48 61 -13
2012 Chevrolet Cruze 49 52 -3
2012 Dodge Charger 52 73 -21
2012 Chevrolet Malibu 52 46 6
2012 Buick LaCrosse 52 52 0
2012 Lincoln MKS 54 N/A N/A
2012 BMW 3 Series 56 N/A N/A
2012 Volvo S80 56 N/A N/A
2012 Ford Taurus 57 67 -10
2012 Toyota Camry 57 59 -2
2012 Toyota Avalon 57 63 -6
2012 Mercedes E-Class 57 N/A N/A
2012 Chrysler 200 59 71 -12
2012 Mercedes CLS-Class 59 N/A N/A
2012 Chrysler 300 60 N/A N/A
2012 Toyota Camry Hybrid 61 56 5
2012 Lincoln MKZ 64 N/A N/A
2012 Cadillac CTS 65 50 15
2012 Nissan Maxima 68 67 1
2012 Volvo S60 69 N/A N/A
2012 VW Passat 70 N/A N/A
2012 Mazda6 70 69 1
2012 Mercedes S-Class 70 N/A N/A
2012 Volvo XC 70 71 N/A N/A
2012 Ford Fusion 75 74 1
2012 Ford Fusion Hybrid 76 92 -16
2012 Nissan Sentra 76 102 -26
2012 Nissan Altima 77 69 8
2012 Audi A6 79 83 -4
2012 Mercedes C-Class 79 N/A N/A
2012 Ford Fiesta 81 88 -7
2012 Nissan Leaf 81 N/A N/A
2012 Chevrolet Volt 82 88 -6
2012 Volkswagen Jetta 86 63 23
2012 Ford Focus 87 79 8
2012 Toyota Prius 93 108 -15
2012 Audi A4 94 94 0
2012 Toyota Prius V 103 N/A N/A
2012 Fiat 500 112 N/A N/A


Factors Influencing 2012 OTD

The No. 1 factor influencing 2012 OTD was quality holds. “Quality holds were the primary cause of delay in 2012,” Baran said. “We experienced minor interruptions with some models due to restraints. Other delays were seen, due to component holds, and new engine options. In addition, there was a hold on certain wheels, due to a supplier issue with 20-inch tires, and the discontinuation of a tire brand that had to be replaced.”

Although quality holds have been impacting OTD times for the past several model-years, it appears that they were especially a factor in 2012. “FMCs and customers are accustomed to experiencing OTD delays, due to quality holds, limited fleet allocation, high-order volume, and/or weather.

However, recalls typically don’t impact OTD to the extent they did during the 2012 model-year. The primary vehicles affected were the 2012 Dodge Journey and the 2013 Ford Escape,” said Gomez of Donlen.

This was reinforced by Jan Freund, director, manufacturer relations for Wheels, Inc. “Due to stringent quality guidelines, many vehicles are held by the manufacturers for final inspection and rework if necessary before being released from the production plant. Several automakers have a ‘build-and-hold’ practice in place for the introduction of all newly redesigned models. This can potentially cause a buildup of inventory at the assembly plants and outside storage yards, resulting in shipping delays,” Freund said.

What makes quality holds especially frustrating is the lack of information associated with them.

“Because information related to quality holds is often closely guarded by the manufacturer, it may be difficult for factory contacts to communicate the exact reasons why a vehicle is being held or when it is projected to ship. In addition, the assembly plants are unable to isolate fleet-sold orders, so they cannot prioritize such vehicles to move through the inspection process more quickly,” Freund said.

Quality holds can have a significant impact on OTD times, averaging two to four weeks.

“New-model quality holds have a similar impact on delivery times as the holds related to new model-year production start-up. On average, hold times range from two to four weeks,” said Gomez of Donlen.

However, fleets are becoming accustomed to quality holds. “Quality holds are very usual and standard operating procedure for all the manufacturers to have containment holds for quality inspections prior to giving the approval to release new vehicles for shipment. This was a very good year and we were not impacted by a large number of new-model quality holds,” said Tangney of Emkay.

Agreeing is Elizabeth Kelly, director, vehicle acquisition for LeasePlan USA. “We experienced fewer new-model quality holds for the 2012 model-year. Most delays were material holds, many of which were connected to the tragic events in Japan,” Kelly said.

2012 Order-to-Delivery Times: Trucks (20,256 total)   
Truck Models 2012-MY OTD (Days) 2011-MY OTD (Days) Change (Days)
2012 Chevrolet Avalanche 57 N/A N/A
2012 Chevrolet Silverado 66 69 -3
2012 GMC Sierra 67 62 5
2012 GMC Canyon 72 68 4
2012 Ram 74 73 1
2012 Toyota Tacoma 80 106 -26
2012 Chevrolet Colorado 82 75 7
2012 Ford F-Series      
(F-150/F-250/F-350) 84 92 -8
2012 Nissan Titan 94 73 21
2012 Toyota Tundra 96 71 25


Ongoing Railcar Shortages

The other major factor impacting OTD has been the ongoing railcar shortage.

“As the auto industry continues to rebound, certain manufacturers have reported periodic shipping delays that continue to impact delivery timing. In 2008 and 2009, the railcar providers were forced to put many railcars in storage, cut capacity, and trim staffing levels. The rail companies simply weren’t able to rebuild capacity to match auto industry demand. Industry reports say that the OEMs generate 8 to 9 percent of total rail freight, and have little leverage with the railroads, so this will likely be an ongoing concern,” said Freund of Wheels, Inc.

This was seconded by Groth of GE Capital Fleet Services, who stressed the need to educate fleet managers on the impact of railcar shortages.

“Many customers and drivers may not fully understand the railcar industry and how the shortage of railcars impacts the delivery of their vehicles,” Groth said.

All of the FMCs agree that railcar shortages continue to be an issue for OEMs. “There were some delays due to railcar shortages, primarily in the beginning of the model-year; however, the impact did lessen as the model-year progressed,” said Gomez of Donlen.

The shortage of railcars extends across all of North America. “The automakers continue to report an industry-wide shortage of railcars across the U.S., Canada, and Mexico. Industry reports recently said that daily inventories awaiting shipment totaled around 81,000 units, or about 17-percent more than the standard daily inventory. Many of the automakers have pursued alternative shipping options to mitigate the impact of the railcar shortage. GM, for example, has sought ‘short sea’ shipping methods, and Ford and Chrysler are using independent carriers in some areas,” said Freund.

The railroad industry is making efforts to increase the number of railcars available to transport vehicles.

“It is not unusual to have railcar shortages and the rail companies are slowly making capital expenditures to increase the number of railcars. The industry is rapidly increasing production quantities of new vehicles, so railcar shortages will continue to be a factor in delivery times.

Manufacturers work with the rail companies to reduce network congestion, downtime, and cycle times. Manufacturers have also begun to transport more vehicles by car hauler to minimize the impact of the railcar situation,” said Dave Nagy, senior VP of operations for Emkay.

“Our expedited delivery and dealer department noticed an increase in transit damage, especially roof damage to vehicles. We also had more dealers alerting us to the damage than in the past,” said Groth of GE Capital Fleet Services.

In addition to a shortage of railcars and increased damage, another issue is the difficulty in obtaining accurate vehicle status while in transit.

“LeasePlan USA was challenged with some rail-related issues in transporting models to market. The biggest challenge was obtaining accurate vehicle status. Through communication efforts and weekly manufacturer meetings, we were able to guide our clients through this issue,” said Kelly of LeasePlan USA.

Another factor impacting OTD times is supplier constraints. “Many automakers are adding second and third shifts. Ford, for example, recently added shifts to its Chicago, Michigan, and Louisville plants. But, while credit is easing and parts suppliers are also adding personnel, machinery, and production lines, there is an ongoing concern if the second- and third-tier suppliers will be able to keep up with demand as U.S. sales move beyond 14.5 million,” Freund said.

According to Baran of ARI, there were other low-impact issues that influenced OTD in 2012. “An explosion last April at a German chemical plant put a three-month production hold on a vital ingredient used to make brake- and fuel-system components,” Baran said.

Freund of Wheels also cited this incident. “This was an issue in which a single supplier serves as the primary source of parts for virtually the entire industry. The German chemical plant explosion threatened to affect U.S. auto production. The plant is one of a few facilities in the world that produces a key plastic used in brake and fuel systems. As a result, more than 200 automotive industry leaders gathered in Detroit for an emergency meeting to review the implications and next steps.

Fortunately, the automakers were able to mitigate the concern by tapping into alternative supply options, but the situation raised serious questions about the supply chain,” Freund said.


Weather-Related OTD Delays

The 2012 calendar-year was relatively mild in terms of weather-related delays to OTD, with some exceptions.

“In the beginning of the 2012-MY, we were still experiencing the long-term impact of the tsunami and Japan earthquake. In addition, Hurricane Irene hit the East Coast of the U.S. in August 2011, and hailstorms throughout the country continued to pose a problem during the 2012-MY, as numerous vehicles were damaged. These natural disasters not only affected some of the manufacturing plants, but also impacted suppliers, which resulted in color constraints, part shortages, and damaged vehicles,” said Gomez of Donlen.

The biggest weather-related problem revolved around hailstorms. “Spring hailstorms caused the biggest delays as many of the Midwest plants and transportation hubs were hit by hail, damaging, in some cases, thousands of vehicles. These vehicles had to be inspected, repaired, or deemed undeliverable and needed to be reordered,” said Tangney of Emkay.

Baran of ARI also cited hail damage, but noted the mildness of weather during 2012. “With a very mild winter, weather did not affect OTD as it had in the past, but hail in the Midwest was a minor issue. Vehicles that were damaged while still in manufacturer lots were sent back inside for repair, while those on dealership lots were delayed while waiting for onsite repairs,” Baran said.

This was echoed by Kelly at LeasePlan. “Hailstorms this summer contributed to order-to-delivery delays.”

In addition, heavy rain in the Northeast impacted several assembly plants. “At least six auto assembly plants were forced to slow production last fall when heavy rains in the Northeast caused severe flooding at a major carpet supplier. Some OEMs, including GM, Chrysler, and Volkswagen, had to revise production schedules. Others, such as Ford, continued to build and ship vehicles without the carpet and floor mats, which were installed later by the dealers. Thousands of vehicle deliveries were delayed, some upwards of 60-plus days, as each OEM worked though the situation differently,” said Freund of Wheels, Inc.

Groth of GE Capital Fleet Services offered a similar assessment. “The 2012 model-year was a quiet year for weather-related delays on the East Coast and Midwest. A hailstorm in Hermosillo, Mexico, in August 2011 did damage a number of Fusions on the grounds of the manufacturing plant; however, the impact to our customers was minimal,” Groth said.

2012 Order-to-Delivery Times: Crossover/SUV (35,799 Total)   
Crossover/SUV Models 2012-MY OTD (Days) 2011-MY OTD (Days) Change (Days)
2012 BMW X5 34 N/A N/A
2012 Jeep Wrangler 42 N/A N/A
2012 Buick Enclave 48 N/A N/A
2012 Mercedes GLK-Class 48 N/A N/A
2012 Lincoln MKT 49 N/A N/A
2012 Chevrolet Traverse 51 50 1
2012 GMC Terrain 51 60 -9
2012 Jeep Liberty 52 53 -1
2012 Chevrolet Suburban 52 61 -9
2012 GMC Acadia 54 46 8
2012 Mercedes-Benz GL-Class 55 N/A N/A
2012 Dodge Durango 57 N/A N/A
2012 Jeep Patriot 57 54 3
2012 GMC Yukon 57 46 11
2012 Chevrolet Tahoe 59 51 8
2012 Chevrolet Equinox 60 60 0
2012 Ford Expedition 61 75 -14
2012 Dodge Journey 63 77 -14
2012 Mercedes-Benz M-Class 64 N/A N/A
2012 Cadillac Escalade 64 66 -2
2012 Volvo XC 60 68 N/A N/A
2012 Jeep Grand Cherokee 68 69 -1
2012 Lincoln MKX 69 N/A N/A
2012 Jeep Compass 69 54 15
2012 Ford Flex 70 70 0
2012 Chevrolet Captiva 72 N/A N/A
2012 Volvo XC 90 74 90 -16
2012 Ford Explorer 79 104 -25
2012 Ford Edge 81 76 5
2012 Toyota RAV4 84 92 -8
2012 Ford Escape 84 62 22
2012 Toyota Highlander 85 95 -10
2012 Audi Q7 90 98 -8
2012 Mazda CX-9 100 N/A N/A
2012 Toyota 4Runner 115 113 2
2012 Toyota Sequoia 117 123 -6


OEMs Proactive on Reporting Vehicle OTD Status

All OEMs have been proactive in providing OTD status updates on vehicles in transit.

“Ford and GM provide us with the most frequent updates. Regularly scheduled conference calls are conducted to discuss factors that may affect delivery, such as plant shutdowns or quality holds. The majority of the manufacturers notify us by e-mail as issues or concerns arise,” said Gomez of Donlen. “Although communication from OEMs has improved over the past couple of years, it is imperative when delays occur that FMCs are provided with a list of their affected vehicles along with the anticipated release date.”

Overall, OEMs provide updates and status reports that allow FMCs to adjust when changes to OTD do occur. “GM provides good, consistent updates and, this year, Chrysler has begun to provide lead times, which has proved helpful. ARI also has worked closely with Toyota to provide additional status updates on vehicles built in Japan,” said Baran of ARI.

However, all FMCs cited overall improvements in OEM communications, especially via scheduled conference calls.

“Improvement has come in the way of routine, scheduled conference calls from Ford and GM. On these conference calls, FMCs are provided updates regarding production allocations, commodity holds, plant down weeks, and any other developments that would influence lead-times. This has been a good forum for the FMCs to address concerns they have and to get an overall picture to share with clients as needed,” said Nagy of Emkay.

Groth of GE Capital Fleet Services likewise praised the OEMs for the weekly conference call updates.

“The weekly communications Ford, Chrysler, GM, and Toyota send out regarding holds and constraints have been very helpful. We use this information to create internal communications educating our own employee base on industry trends as well as our mutual customers. It is important for our employees to have access to holds, constraints, and build outs at any given time so this information is very important to us,” Groth said.

Kelly from LeasePlan USA was another FMC who spoke highly of the regular conference call updates. “The manufacturers were very effective in getting detailed information to the fleet management companies regarding the timing of new vehicle deliveries, including information for upfit vehicles. They did this by providing weekly and biweekly conference calls and news bulletins. In some instances, for particularly turbulent times and emergency purposes, calls increased to weekly and spur of the moment, when necessary,” Kelly said.

However, there have been some hiccups in the process. “There are times on some new-model introductions where the ETA-to-dealer dates are not accurate due to plant quality inspection holds. The date the manufacturer provides on those vehicles needs to be revised and more accurately reflected on their websites and data feeds,” Nagy said. “Each FMC would benefit greatly by having access to the manufacturer’s logistics information so we don’t have to rely on a customer support team representative to assist us in tracing and tracking vehicles.”

Another FMC who cited inconsistency in OTD lead-time estimates was Freund of Wheels. “Most manufacturers provide vehicle status updates on a daily basis; however, that can change pretty quickly when production or shipping issues occur. In addition, while many manufacturers’ projected OTD times are consistent, we’ve seen some delivery estimates bounce around dramatically as order volumes fluctuate or supplier concerns arise.

This can be particularly frustrating for customers who place orders believing the lead time is 10 weeks, and it suddenly jumps to 16 weeks,” Freund said. “We often find the manufacturer is unable to expedite fleet orders, especially when the delays are related to quality hold inspections and repairs. In many of these cases, it is difficult for manufacturers to even provide estimated production and shipping dates.”

One ongoing issue has been the communication of status when a vehicle arrives at a dealership, which is not always timely. “Ford, GM, Chrysler, and Toyota status events are consistent as the vehicle is being built. However, there needs to be more consistent data reported back to us when a vehicle arrives at the dealership.

There is a large discrepancy between what is reported to us by the OEM and what the dealership reports back to us. There is a range of minus four days to plus five days, a nine-day difference between the data. Customers often hold FMCs accountable for the data even though we receive it from the OEM,” said Groth of GE Capital Fleet Services.

In the prior model-years, the downsized franchised dealer network impacted courtesy deliveries and required employees to drive farther to pick up their replacement vehicle. However, many of these issues have been mitigated.

“The downsizing of franchised dealer networks was not nearly as prevalent in 2012 compared to past years, especially after the auto bailout of 2009 and 2010. The excess inventory does not exist and manufacturers are more closely matching supply and demand. This is especially evident in the stock purchase aspect of fleet management. Dealers are much closer to the demands of the retail market and are not overstocking their inventories. This effectively limits carrying costs, and dealers are not downsizing at the same rates we have seen in the past,” Baran said.

2012 Order-to-Delivery Times: Vans (21,227 Total)   
Van Models 2012-MY OTD (Days) 2011-MY OTD (Days) Change (Days)
2012 Chrysler Town & Country 50 64 -14
2012 Dodge Grand Caravan 62 72 -10
2012 Chevrolet Express 74 80 -6
2012 Toyota Sienna 79 68 11
2012 Ford Econoline 85 83 2
2012 GMC Savana 85 78 7
2012 RAM CV 88 N/A N/A
2012 Mercedes-Benz Sprinter 128 99 29
2012 Nissan NV 128 N/A N/A
2012 Ford Transit Connect 144 172 -28


OTD for Import-Badged Models

The OTD for import-badged models has been improving over the years as more vehicle assembly has shifted to factories in the U.S. However, many units continue to be imported, which makes OTD times difficult to estimate.

“As with all manufacturers, weather-related delays affected the import manufacturers, and, in some cases, impacted them the most. The Asian import manufacturers took longer to recover from some of the natural disasters as would be expected, but as the model-year progressed, the OTD time frames gradually decreased,” said Gomez of Donlen.

On the whole, the 2012 model-year OTD performance by import-badged models was on par with that of MY-2011. “There were minimal changes on the import-badged models from 2011-MY to 2012-MY,” said Baran of ARI.

The big news in 2011 was the earthquake and subsequent tsunami in Japan, from which the industry is still feeling some residual impact. “The tsunami disaster was the biggest story of the 2011-MY year and the turnaround in getting suppliers and manufacturers back up and running again as quickly as they did was a monumental feat. Most of the import models had comparable lead-times to last year with few exceptions. We saw some additional OTD increases in the Audi A4 and new A6 models as Audi demand remains high. Toyota introduced the all-new Camry in 2012, and its launch was smooth and had normal lead-times,” said Tangney of Emkay.

Agreeing was Kelly of LeasePlan USA. “Most of the import badges have vehicles built in Japan or have supplies coming out of Japan. As a result, the disaster had a major impact on OTD,” Kelly said.

One residual effect of the Japan earthquake is that several Japanese-headquartered companies elected to delay 2012-model shipments.

“As they continued to recover from the tsunami in Japan, Toyota and Subaru elected to hold back the 2012 commercial fleet deliveries until November and December. This caused some initial frustration for customers who typically want to take advantage of the early fall resale market. However, the manufacturers communicated their plans well ahead of time so customers, for the most part, were able to plan accordingly,” said Freund of Wheels, Inc.

The track record for European-based OEMs has been pretty good for MY-2012. “Generally speaking, the European manufacturers — such as Volvo, Volkswagen, and Audi — tend to have longer lead times. The good news is that predicted OTD times from these manufacturers tended to be more accurate, so customers were able to account for the delivery time when placing orders,” Freund said.

However, there is still room for improvement in terms of OTD status communication from import-badged OEMs.

“There needs to be a consistent message from the top down with import-badged vehicles from the corporate level to the dealerships accepting these vehicles indicating the corporate vision or plan. Many dealerships do not want to do courtesy deliveries in this arena. There are often instances where our fleet vehicles are sold before our customers’ drivers can arrange delivery which leads to frustration. Customers are showing more of an interest in import-badged vehicles; however, they are cautious because of delivery timeframes and the delivery experience for their drivers,” said Groth of GE Capital Fleet Services.

Top 10 Most Improved Order-to-Delivery Times   
Vehicle Models 2012-MY OTD (Days) 2011-MY OTD (Days) Change (Days)
2012 Ford Transit Connect 144 172 -28
2012 Nissan Sentra 76 102 -26
2012 Toyota Tacoma 80 106 -26
2012 Ford Explorer 79 104 -25
2012 Dodge Charger 52 73 -21
2012 Volvo XC 90 74 90 -16
2012 Ford Fusion Hybrid 76 92 -16
2012 Toyota Prius 93 108 -15
2012 Dodge Journey 63 77 -14
2012 Chrysler Town & Country 50 64 -14
2012 Ford Expedition 61 75 -14


OTD Initiatives Implemented by FMCs for 2012-MY

FMCs have launched a multitude of enhancements to their abilities to track OTD for ordered fleet units.

“We have a dedicated expediting team to monitor the status of vehicles and contact the dealerships’ proactively to deliver the vehicles to the assigned drivers within our customers’ set time frames. We have a renewed focus on getting vehicles off the dealerships lots as soon as possible so drivers can start driving their new vehicles and customers can sell turned-in vehicles according to plan,” said Groth of GE Capital Fleet Services.

Another enhancement was reported by LeasePlan USA, which incorporated a lean methodology into the vehicle acquisition department that focuses on OTD process improvements.

“Lean implementation has shown to improve time frames and create a smooth delivery experience for our fleet drivers. In addition, vehicle acquisition is going through an enhancement of our systems with improved technology and reporting solutions,” said Kelly of LeasePlan USA.

These efforts are multi-pronged, involving interdepartmental cooperation and working directly with the OEMs.

“Wheels has the systems, processes, and people in place to constantly monitor vehicle production and delivery. We work across our internal departments and directly with all manufacturers and upfitters to ensure up-to-date vehicle status and expedite service to our customers and drivers whenever possible,” Freund said. “Given lingering uncertainty surrounding the automotive supply chain, Wheels provides ongoing education and counsel to our customers regarding potential disruptions and how to develop plans to respond to unexpected changes by the manufacturers.”

Many of these efforts require FMCs to be proactive, addressing issues before they occur versus after-the-fact.

“We take a proactive consulting approach with our clients. Determining what vehicle types they will be ordering and when the best time to order is based on expected market conditions. We typically communicate expected delivery times based on a number of different variables,” said Nagy of Emkay.

GE Capital Fleet Services has been enhancing its reporting capabilities. “We increased reporting capabilities to identify potential issues with vehicles sitting at dealerships longer than customer expectations and will handle these outliers with a more seasoned team of analysts to ensure they are delivered,” Groth said.

OTD initiatives by FMCs require working closely with their fleet manager customers, as cited by Donlen. “While no one can control many of the factors that contribute to OTD times, we routinely work with customers on supply-chain management by determining their targeted delivery objectives. Based on these objectives, Donlen considers vehicle upfit and transportation lead times and ensures orders are placed and scheduled to meet the customer’s delivery expectations. We schedule weekly conference calls with the customer, OEMs, and upfitters to ensure delivery target dates are being met and to address any outliers. We feel that transparency and the ability to monitor vehicles throughout every stage of the process is of the most benefit to everyone involved,” Gomez said.

The same is true with ARI. “We continue to make enhancements to our status system and that has improved benchmarking and the ability to monitor the timeliness of OTD status reports to our clients. We monitor daily statuses fed to us from the manufacturers, which we funnel through to customers via our web-based supply chain management tool to using a comprehensive range of status codes for vehicles progressing through the order and delivery process. Clients can customize alerts in the web-based system to highlight exceptions or potential delays that will impact OTD times. We make ,the same information available to drivers through their own Web portal,” Baran said.


Initiatives to Improve OTD Process

One universal response has been to develop a team approach between all parties involved in the fleet delivery process.

“OEMs and fleet management companies have adopted a ‘team’ approach and are working together to streamline the ordering process. When customers express an interest in a high-volume order, we work with the manufacturer to determine a production schedule that will meet the delivery needs of the customer,” said Gomez of Donlen. “If vehicles are being upfitted, the OEMs are also participating on conference calls with upfit vendors to discuss the logistics of a particular project to ensure that orders are being built and shipped appropriately based on their build capacity and the build capacity of the upfitter.”

Baran of ARI offers several suggestions on how OEMs can improve fleet OTD times.

“Providing an accurate and consistent method of in-service dates would be the No. 1 improvement for OTD. Possible incentives to dealers to expedite delivery to courtesy delivery clients may be another solution. The time the vehicle spends on the dealer’s lot is the most difficult to manage and caused significant OTD delays in 2012. ARI has implemented automated e-mail follow-up with the dealerships; however, many dealers have still not embraced the Internet and automated delivery follow up,” Baran said.

Emkay gives good marks to the OEMs in their efforts to improve OTD times. “They work to reduce railcar cycle times, downtimes, network congestion, and empty railcar service. In certain circumstances, manufacturers may elect to move vehicles by truck carrier instead of rail to minimize delays,” Tangney said. “Many manufacturers participate in industry task forces that investigate logistic issues and work for constant improvement.”

One effective tool is the availability of fleet-specific pools of vehicles. “Several manufacturers offer fleet pool vehicles that are produced at the plant and are ready for shipment. For instance, Ford offers its Fusion pool of produced vehicles for FMCs to pull from. Similarly, Toyota offers various models in their ‘emmediate’ pool of vehicles and GM allows FMCs to place pool orders using its ‘eFleet’ inventory website tools,” Tangney said.

The automakers are working closely with their supplier base to resolve the major issues. “For example, Toyota is sending engineers and support staff from their manufacturing operations to their parts suppliers to help improve input,” said Freund of Wheels. “Several automakers have added, or will be adding, a third production shift for many popular models. For example, Ford is operating three shifts at the plant that builds the Explorer and Taurus, and is planning to add a third shift to the plant that builds the Escape.”

In addition, according to Freund, “The manufacturers are developing new vehicles by using shared platforms and assembly lines so they can easily adjust production across models as demand and inventory requires.”

But, there is still room for improvement, according to Tangney. “We need continued improvement in reporting and communication tools to gain visibility of vehicles on hold or delayed.”

Despite the challenges, the industry is doing a remarkably good job in managing fleet OTD times. “Manufacturers, transportation companies, and upfit suppliers continue to do a good job identifying opportunities to improve OTD times. Perhaps more emphasis on material holds would improve OTD times for fleet management companies and our clients. For instance, becoming more proactive in identifying transportation issues before they occur would help OTD times greatly, especially in the midst of a heavy ordering season,” said Kelly of LeasePlan USA. “I believe this could be accomplished by the manufacturers working with suppliers to take a more proactive approach to meeting the needs of its customers together. Import partners do a good job in matching customer orders to vehicles at port or in their pipeline, which greatly improves OTD outcomes.”

OEMs have reached out to FMCs to develop working partnerships. “Many manufacturers have reached out to us to form solid working partnerships, which results in a value-add experience for our customers. It opens up dialogue between the organizations so everyone understands the customers’ ordering needs and schedules,” said Groth of GE Capital Fleet Services. “The OEMs have been more open to improving overall communications and status updates.”

Originally posted on Automotive Fleet