The letter from Terex Cranes president Steve Filipov admits to several problems since outsourcing parts supply management last year to a third party logistics provider.
In summer 2017, Terex Cranes consolidated multiple European parts warehouses into a central distribution centre in the Netherlands runs by Ceva Logistics. The contract with Ceva also covers Terex’s Genie aerial work platform business.
However, there have been teething problems with the centralised European parts distribution strategy but Terex says it is now addressing them.
Steve Filipov says: “We are in the final stages of the consolidation, and we remain confident that this initiative will improve our responsiveness to all of our European crane customers over the long term. However, we have encountered some short-term issues that have been more disruptive than we anticipated. Namely, our parts availability, lead times and responsiveness speed has suffered, while our parts order backlog has grown.”
He adds: “Terex Cranes takes seriously any disruption in meeting our commitment to supporting you and your business efforts. Therefore, we have assigned a dedicated, experienced team whose mission is to assess and address these short-term disruptions. The team has identified several root causes of these issues, which include IT interfaces between Terex and our logistics partner, gaps in data quality, supply chain disruptions, and a steeper-than-anticipated learning curve for our logistics provider.”
Mr Filipov says he has sent in a team to sort out the problems and the parts order backlog has started to shrink.
“Additional dedicated resources are now in position to resolve the key root causes of these disruptions, and we have a plan and people in place to work through the existing backlog issues,” he writes.
“We anticipate our parts fulfilment operations to be back to normal by early summer,” he says.