Procurement Challenges Troubling Executives in the Sheet Metal Fabrication Equipment Market
The modern wonders of the world are all possible due to advances in construction technology and material science. Although technological advancement is growing at an unprecedented rate, it’s the small and simple things that still matter. Sheet metal fabrication is still as important in construction and manufacturing as it was decades ago. Sheet metal fabrication equipment is used to cut and provide shapes to sheet metal components and also involves the process of material removal or material deformation. It comes as no surprise that the sheet metal fabrication equipment market is ever-growing. The growth of end-user industries such as construction, heavy equipment, and energy can be attributed to the growth of the sheet metal fabrication equipment market. In addition, the automotive industry is another major end-user industry, which is fueling market growth. However, it’s not all easy for the procurement teams in this market to conduct business.
The overall maintenance cost for sheet metal fabrication equipment consists of the time and money that was spent on the corrective actions and the loss of production time that results in direct revenue loss for the organization. Additionally, the age of the equipment, condition of the equipment, and amount of utilization of the sheet metal fabrication equipment also impacts the overall spend on maintenance. As a result of increasing cost of maintenance, the TCO of sheet metal fabrication equipment is increasing, taking it beyond the purchasing power of small and medium scale buyers.
Inability to track usage
Buyers across different industries are not tracking parameters such as idle machine time and proper estimation of the use of equipment. This results in the sub-optimal utilization of sheet metal fabrication equipment across different industries. As a result, third-party professionals need to be hired for conducting surveys to assess the true utilization rate of the equipment accurately.
Assessing the real value of equipment prior to leasing
Buyers across different end-user industries prefer procuring sheet metal fabrication equipment on lease. It helps to reduce the CAPEX and optimize the profit margins for buyers. However, buyers find it difficult to assess the value of sheet metal fabrication equipment prior to leasing as it requires checking parameters such as the history of usage and utilization rates. As a result, buyers find it difficult to assess the residual value of the equipment prior to its procurement. To ascertain the true value, buyers must take assistance from industry experts to understand the residual value of the equipment before leasing the equipment.
To avoid and tackle such procurement challenges, buyers in the sheet metal fabrication equipment market should invest in preventive maintenance and try to outsource the maintenance of equipment. Also, it can help if buyers hedge against raw material price fluctuations as it eases the financial burden.
Read more about the procurement challenges in the sheet metal fabrication equipment market along with procurement best practices, pricing models, supply market insights, and market challenges in SpendEdge’s upcoming report on the global sheet metal fabrication equipment market.