Reducing financing risk key to addressing tariff supply chain issues

Companies are shifting from the extreme strategies of overbuying and just-in-time stocking to disciplined, data-driven parts schemes that reduce downtime and financing risk. 

In addition, dealers and OEMs are emphasizing parts, service, and technician utilization as core profit drivers amid rising costs. 

In today’s tariff-driven, uncertain environment, companies want to avoid expensive rush shipping and downtime, as well as avoid financing issues, Nick Haase, co-founder of AI-powered maintenance management system and enterprise asset management platform MaintainX, told Equipment Finance News. 

Ready for anything 

Dealerships and manufacturers have to be ready for anything, Haase said. 

“If the finance team and the leadership team don’t want to invest in these parts, and you get blocked, it doesn’t matter how smart your strategy is,” he said. “You need to make sure that they’re ready to cut those [purchase orders] when you’re ready and execute on it.” 

Many organizations lack visibility into critical assets and spare parts, so focusing on tracking delays, lead times and bottlenecks enables a practical, data-driven strategy for reducing downtime, Haase said. 

“Leadership really likes data, and it turns out that’s a breath of fresh air for a lot of them.” — Nick Haase, co-founder, MaintainX

“Because uptime is now a finance decision, you’ve got to help teams put numbers to it, so the procurement, maintenance, and the CFO all see the same risk,” he said.

Equipment dealer Titan Machinery generated more than half of its gross profit through the second quarter through parts and service, President and Chief Executive Bryan Knutson said during the company’s second-quarter earnings call last month.   

“Our parts and service businesses together are generating well over half of our gross profit dollars through the first half of the year, while representing about a quarter of our revenue mix,” he said.  

Parts and service provided “valuable stability during the trough in this equipment cycle,” he added. 

Leveraging parts data 

Nearly 80% of companies treat nearly all parts inventory as an expense rather than capitalizing high-value items like motors, due to weak tracking and monitoring systems, Haase said. 

“If you think about the financial opportunities to happen in the equipment and parts space, when you start to become more data-driven, you’ve got a platform that drives accountability and transparency,” he said. “It’s going to start to unlock interesting opportunities for the lenders, because they have to basically bake in this risk profile that is very opaque.”

To capitalize on this trend, MaintainX also recently partnered with Inductive Automation to help bridge the gap between operational technology and maintenance execution, according to a Sept. 16 release.  

Industry challenges 

Meanwhile, Section 232 tariffs continue to expand, creating complications for equipment dealers for both parts and equipment, Daniel Fisher, senior vice president, government and external affairs at Associated Equipment Distributors (AED), said during a Sept. 10 AED webinar. 

There are no exclusions or appeals available for dealers or OEMs, he noted, adding that on “components and parts … I’m looking at significant price increases there as we move forward,” he said. “The cost of equipment is going to go up, or at least the steel and aluminum content will go up upwards of 50%.” 

That will drive up costs on equipment dealers, which will “certainly” drive up costs for customers, Fisher said. 

For OEMs, expanding and maximizing the use of service technicians and parts management are key metrics that drive both profitability and overall growth, Aaron Ravenscroft, president and CEO of Milwaukee-based crane OEM Manitowoc, said at the 2025 Midwest IDEAS Conference in Chicago on Aug. 27. 

“There are plenty of parts that are on a crane that we don’t produce, that we buy somewhere else, and if we’re not doing a great job with the customer and helping them, it forces them into the option of going and finding those parts elsewhere,” he said.  

Check out our exclusive industry data here.