Managing the New Machine Sales Pre-Delivery Inspection Process.

Managing the New Machine Sales Pre-Delivery Inspection Process.

This week is all about logistics, with guest writer Ron Wilson writing about “Managing the New Machine Sales Pre-Delivery Inspection Process.”

While my wife and I were sitting in a car dealership and listening to the salesperson explain there is a delay in completing the pre-delivery inspection, my memories of the importance of managing the New Machine Sales Pre-Delivery Inspection reoccurred.

Pre-Delivery Inspections provide a foundational starting point for the new machine in the following areas:

  • Customer Satisfaction: Ensures that the customer receives equipment that is fully functional and free of defects and matches what was ordered by the customer.
  • Safety & Compliance: Verifies that all safety features are operational and ensures that the equipment complies with all relevant regulations and standards.
  • Quality Control: Helps maintain high standards by catching and addressing any issues before delivery.
  • Minimizes Early Field Service Calls: A measure of success can be the number of hours the machine has operated from the first day it was delivered to the date first requesting repairs.

PDI Process at an Equipment Dealership Includes:

  1. Development of a PDI list:  The PDI list is usually a list of items recommended by the OEM, and specific areas that have been defined by the dealer. There are common items across all machines and specific items that have been determined based on previous warranty claims submitted to the OEM by the dealer and local dealer requirements.
  2. Receive Equipment: When new equipment arrives from the manufacturer, log it into inventory, schedule and prepare it for inspection.
  3. Assign and Conduct Inspection: Assign the PDI task to a qualified technician, ensuring they have the necessary tools and checklists. The technician performs the inspection, following the PDI checklist and documenting any issues found. 
  4. Address Issues and Final Check: Any defects or problems identified during the inspection are repaired or resolved. Proper warranty claim documentation is completed and submitted back to the OEM. This information can assist the OEM in addressing these issues at the factory, preventing future quality issues on other machines.
  5. Prepare for Delivery: Clean the equipment, gather all necessary accessories and documentation, and prepare it for delivery to the customer.
  6. Customer Handover: Review the PDI report with the customer, demonstrate key features, and address any questions they may have. Best practices of this process should include the machine sales and product support representatives being scheduled to be at the site on the delivery date. Depending on the machine a technician may need to be scheduled as part of the delivery.

Key Aspects of a Pre-Delivery Inspection

  1. Visual Inspection and Functional Tests
    • Check the exterior and interior for any damage, scratches, or dents.
    • Ensure that all parts and accessories are present and correctly installed.
    • Verify that labels, decals, and instructions are in place and legible.
    • Test all mechanical, electrical, and hydraulic systems to ensure they are operating correctly.
    • Check fluid levels (oil, coolant, hydraulic fluid) and top them up if necessary.
    • Verify that lights, signals, and indicators are functioning properly.
  2. Safety Features
    • Inspect safety features such as brakes, seat belts, alarms, and emergency stops.
    • Ensure compliance with safety regulations and standards. This may vary by client.
    • Test any software-based safety systems for proper functionality.
  3. Software and Firmware Updates
    • Check for any available software or firmware updates to be installed.
    • Verify that all digital systems are working as intended and are up to date.
  4. Performance and Operational Checks
    • Conduct performance tests to ensure the equipment operates within the specified parameters.
    • Test the equipment underload (if applicable) to ensure it performs as expected.
  5. Documentation
    • Review and complete all necessary documentation, including warranty forms, registration papers, and manuals.
    • Provide a detailed PDI report, noting any issues found and actions taken to resolve them.
  6. Final Preparations
    • Clean the equipment thoroughly, removing any protective coverings or shipping materials.
    • Ensure all accessories, tools, and documentation are included with the equipment.
    • Perform a final quality check to confirm that the equipment is ready for delivery.
    • Additional attachments are included as defined within the sales document.

Scope Creep of the NPI Process: Over time the NPI list can become outdated and excessive based on experiences that caused a task to be added to the NPI list and is no longer relevant. Some considerations when updating and managing the NPI list:

  • Is the task still needed or has it been addressed in the OEM machine assembly process?
  • Review the time allocated to perform each task. Can the task be connected to another task that would reduce the individual time needed to complete both tasks? 
  • Have there been/can there be efficiency gains that would improve and streamline the overall process? 
  • Updating and managing the PDI process is a critical step in the overall new machine delivery experience for the customer and managing the cost related to overall process within the dealership.

Here is an example of the impact (the numbers below are not actual but we can gain a sense of the impact).

Total units sold 1,000

Average hours per PDI 20

Total Hours 20,000

Hourly Rate $90.00

Total PDI Costs $1,800,000

PDI Cost Savings 10% $180,000

As can be seen a 10% reduction in PDI cost in the above example provides $180,000 for the Sales Department’s profit relating to these 1,000 machines. This also allows the technicians’ hours to be allocated to other revenue sources.

By following a thorough up to date PDI process dealerships can ensure customers receive high-quality reliable equipment, enhancing their overall experience and trust in the dealership, and control the dealership cost of the overall PDI process. A Win-Win for both the customer and the dealership.

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