Service as a Future Strategy for Construction Equipment Manufacturers

Construction equipment manufacturers are currently at an economic crossroads. Orders from the past ensured that they were well utilized in the first three quarters of 2023 and, according to VDMA, they are expecting record sales for the year 2023. However, fewer and fewer orders are coming in. 

From January to May of this year, orders for excavators, bulldozers, wheel loaders, and other equipment declined by 19 percent. Especially in residential construction, the rising interest rates and cost increases of recent months have had an impact and are making it impossible to finance projects. 

As a result, the ifo Institute reported in September 2023 that one fifth of the companies in the German residential construction sector had to cancel projects. This trend is affecting machinery suppliers as well. Also contributing to the tense situation are 

• the pressure from China, 
• competitiveness limited by bureaucracy and overregulation, 
• increased construction and material prices, 
• efforts to increase sustainability, 
• the shortage of skilled workers, and 
• digitization. 

The German Association of Construction Machinery, Construction Equipment and Industrial Machinery Companies (Bundesverband der Baumaschinen-, Baugeräte- und Industriemaschinen-Firmen bbi) estimates that economic uncertainty, particularly in the real estate market, will dampen demand for new machinery and instead fuel the rental machinery business. The rental of construction and industrial machinery in Germany already accounts for 20 percent of the industry's total sales, which stand at 12 billion euros.  

Rental or leasing models enable construction companies to save on expensive acquisition costs, respond flexibly to changes in the project schedule, and leave the responsibility for maintenance and repair to the lessor.  

To keep pace with all these developments, construction equipment manufacturers need to rethink their current business models and processes.  

Renting instead of buying, service instead of new machines — these trends will soon require maximum flexibility and excellence in the aftersales departments of construction machinery manufacturers. The following challenges show why the further development and optimization of service processes is becoming increasingly important for the construction machinery industry. 

• Manufacturers are becoming operators. However, output-based revenue models require efficient and digitized aftersales processes and structured management of service data. 
• Construction machinery must not only function reliably but also run as long as possible in terms of sustainability. A prerequisite for efficient lifecycle management is transparency regarding vehicles, equipment, and spare parts. 
• The time and cost pressure on construction projects is great. 74 percent of construction companies see potential for savings in effective equipment maintenance. But 58 percent often delay maintenance until failure — partly because there is a shortage of service staff. This is a problem that manufacturers are also struggling with. 
• Construction machinery is becoming increasingly complex. Therefore, efficient solutions for easy spare part identification are gaining importance for machine users and manufacturers alike. 
• Cranes, bulldozers, and other construction equipment from one manufacturer are often spread across different tenants, construction sites, and countries — and that’s a real challenge for spare parts logistics. Third-party suppliers can often score points because they make spare parts available quickly and threaten to steal the manufacturers' thunder. 

The service sector of construction equipment manufacturers is on the threshold of service transformation or is already in the midst of it. The course must now be set to cushion the decline in orders that is already becoming apparent.  

This requires digital tools and processes. One way to get your aftersales on track as quickly as possible is with easy-to-implement software solutions. Construction equipment manufacturers, for example, can start with the Quanos SIS.one spare parts catalog system and create digital spare parts catalogs in no time at all.  

How do digital spare parts catalogs support construction machinery service? 

All data related to your construction machinery and its maintenance and spare parts can be organized centrally and transparently in a digital spare parts catalog. This allows you to offer your customers what they expect, according to a study by McKinsey and the VDMA: value-added services in the areas of service, aftersales, and maintenance that increase transparency in spare parts deliveries. 

Digital spare parts catalogs also improve pre-delivery processes — by  

• simplifying the spare part identification, 
• providing networked and up-to-date service information, 
• displaying devices and parts in a user-friendly way, for example through 3D graphics, and 
• providing information related to the repair, maintenance, and servicing of construction equipment. 

On the user side, according to the VDMA study, there is an increasing demand for applications that can be operated intuitively. Since equipment users change frequently, services must be particularly user-friendly and accessible without intensive training. With a digital spare parts catalog, you can meet this requirement without placing an additional burden on your service team — for example, with self-service portals based on your spare parts catalog. 

Are you only too familiar with the challenges mentioned at the beginning? With Quanos SIS.one, you as a construction equipment manufacturer are capable of mastering them effectively. 

• Shortage of specialists: Quanos SIS.one networks all the relevant parts information in one system and makes it available 24/7 for you and your customers — so that your service team has more time for its core tasks. 
• Digitization: The digital catalog system offers a low-threshold entry into digitized aftersales. By connecting further systems, Quanos SIS.one can be expanded into a comprehensive service information system or supplemented with shop functions. 
• Sustainability: Digital spare parts catalogs simplify maintenance and servicing, thus helping to extend the service life of construction machinery. 
• Competitiveness: Would you like to offer operator models such as "pay per use" or rely on output-based revenue models in the future? Digital spare parts catalogs provide the necessary data basis for this. When they are integrated into digital twins, they help to increase the output of your machines. 
• Service excellence: Digital spare parts catalogs are easy to use and intuitively guide your technicians and the users of your construction equipment to the right spare part. This allows you to invest more time in growing your service business while increasing your sales and customer satisfaction. 

One of the world's largest construction equipment manufacturers already relies on spare parts identification with Quanos in its service spectrum: Liebherr publishes digital spare parts catalogs for construction equipment and other commercial vehicles in its customer portal, thus saving its own employees and the users of its equipment time and money. 

Would you like to benefit from the advantages of digital spare parts catalogs, as Liebherr does? Our eBook tells you everything you need to know about the subject. For answers to your questions and specific examples of how a spare parts catalog can support your service, feel free to contact us.