Order-to-delivery: always a hot topic
When I was working in business development at a fleet management company back in the ‘80s, I had an interesting experience with a vehicle delivery – or lack thereof.
It was a factory-ordered fleet vehicle for an executive that just happened to be a brand-new model. Typically, lead times are already lengthy for new models, but this one ended up being exceptionally long.
The executive was very anxious to get his new vehicle, so he called us daily to check the status. After a few weeks, I had to call him and break the news that he would be waiting even longer. The vehicle had been totaled when the train transporting it derailed.
While this isn’t a common occurrence – thank goodness – it is one of those unwanted “noises” that can hinder the process. Even when every effort is made to get the vehicle delivered on time, sometimes it’s just out of your control.
The best defense against delays is ordering vehicles early. But, sometimes, placing the order is its own challenge.
Many companies target ordering early in the model year, but usually end up being late. Why? Budgetary issues, waiting on internal approvals and simply not having manufacturer pricing can all delay the process to place the order.
Once you finally get the order placed, then it’s time to play the waiting game. And many new factors can throw a wrench in the timeline. But remember, it is a small price to pay for getting a custom-built vehicle. And quality takes time.
For instance, did you know manufacturers typically shut down the plants during the holidays? It’s important to factor this into your timeline because it will inevitably increase the order-to-delivery (OTD) time.
Then there’s domestic vs. non-domestic production. It’s reasonable to expect a vehicle built overseas to take longer to be delivered than one built in the United States. Some companies will only put vehicles on their selector list that are built domestically, so that helps their OTD. On the other hand, internationally owned companies are more open to off-shore production, but it extends OTD.
In some cases, the vehicle arrives at the dealer damaged or gets damaged while it’s sitting on the lot, or, in my scenario from the ‘80s, on the way. Hail damage is also common and, depending on the severity, may not be fixable. When the vehicle is damaged right off the bat, the driver can’t or won’t take delivery. They either don’t want a vehicle that’s not in perfect condition, or it’s against their company’s policy. So, unfortunately, the process starts back at square one – a new order.
While waiting on the vehicle to be delivered is difficult, OTD delays can also have financial impact. Typically, a new vehicle order is attached to the sale of the replacement vehicle. If you sell the old vehicle, you might need to get an out-of-stock vehicle ordered to replace the delayed vehicle, which can be more expensive. If you hold onto the old vehicle, though, it continues to depreciate, in a catch 22 scenario.
There are many nuances to be aware of when it comes to the OTD process. I’ve given you a few here, but check out this eBook for even more details. As a bonus, it also gives you a few ways to help lessen or avoid some of these delays. If you need help with your fleet’s vehicle ordering, don’t hesitate to reach out to us.