Manufacturers Work to Shrink Construction Equipment Supply Shortages

Construction equipment suppliers are cautiously optimistic about improvements in equipment and parts availability in the coming months.

Excavators In A Row
ACBM staff

By now, you’ve hopefully seen an easing of some of the machine and material shortages that emerged in 2021 and continued into 2022. There were several contributing factors to the supply disruptions that developed, some of which had already begun to ease at the time this was being written, providing much-needed breathing room for various links along the global supply chain.

Yet, as we’ve seen throughout the pandemic, returning to “normal” is not as easy or quick as it sounds. Availability of new equipment to the construction industry has continued to lag demand.

“New machines are starting to land, so I would expect this to start to change and ease over the course of 2022 as we work through these supply chain issues,” predicted Doug Rusch, managing director, Rouse Sales, in a panel discussion hosted by Rouse parent company Ritchie Bros. in early February. “But these things don’t flip on a dime. There are complicated supply chain logistic concerns that are going to take some time for us to work through.”

Parts and component suppliers have become global enterprises, he adds, and “that just adds even further time to the process of working through these issues.”

According to the Association of Equipment Manufacturers' (AEM) most recent quarterly survey of its members, more than 95% of ag and construction equipment manufacturers reported experiencing supply chain issues. However, 44% of respondents also indicated the issues were beginning to turn around, signaling that either demand was beginning to normalize or supply chain conditions were improving.

In a State of the Industry panel hosted by AEM, Bob Crain, senior VP - customer experience, AGCO Corporation, and AEM board chair, stated that AEM members were striving to get customers the parts and equipment they needed. “We’ve all gotten very, very creative in the past couple years and all of us have successfully adapted our resources, processes, actions, many things to help mitigate the significant impact to our customers and our dealers,” he said. “No doubt we’re still going to face some challenges in the coming months. But we’re cautiously optimistic that in 2022, we’ll see some improvements across most areas.”

“The challenge has been real for the last, probably, 18 months. We’ve had periods where it appeared to be getting better and then it got worse,” added Rod Schrader, CEO, Komatsu America Corp., and AEM board vice chair. “But I would agree with Bob in the fact that we’ve seen a stabilization across the supply chain. We’ve taken many actions using a variety of ports and transportation modes that we hadn’t been in the past. [We’re] trying to bring on additional suppliers to minimize the risk profile that we’ve had in our manufacturing channel.

“I believe it is going to get better in 2022. I don’t believe it will be back to normal in 2022,” he acknowledged. “But our teams in our individual companies are expending a lot of energy and effort to modify, adapt and to minimize risk not only for today, but also in the future so that we are more flexible and adaptable to these things happening again.”

While we can only hope such steps prove unnecessary in future, they could be the key to ensuring availability of the equipment and resources you need today and in years to come should disruptions in the supply chain emerge again.