Learn what rental companies need to keep their business on track in today’s ultra-competitive environment.
The Complex Rental Market
The market for renting heavy equipment and machinery has always been complex. But never quite so complex as it is today. Today’s multi-location companies are also multi-lingual, multi-currency and work across multiple time zones too.
Doing business globally can be a logistics nightmare. With customers and equipment in various locations with varying rental lengths, supply chain management has never been more important. Late delivery or unavailability can have a financial impact on customers and, in turn, their customer too.
With the demand for more, better, now – and for less money – there’s little doubt that the rental market has great potential. But how can companies profit from growing demand, without falling prey to the pitfalls?
Challenges and Opportunities
Inevitably, multi-faceted companies have multiple IT systems to deal with the diversity and variability of their business. Larger companies have grown through acquisition, which probably means inheriting a jumbled IT architecture, often made up of second or even third generation systems. These are often rich in functionality because they have grown over time, but tend to function as silos and are difficult to integrate across the organization.
These disjointed systems are also making it difficult – if not impossible – for rental businesses to gain an overarching view of worldwide availability and to generally manage their order lifecycle, from the initial inquiry by a prospect to sending out invoices and collecting money in a consistent and efficient manner. So increasingly, rental companies are finding ways to bring together multiple systems to provide an integrated reliable, current and easy to access information hub that is tailored to their own individual processes and workflow.
Take the system we have recently implemented for Ashtead Technology, a leading international equipment rental company. Working across different time zones meant that there was always a lapse of intelligence and insight on utilization. It was impossible to understand the current state of the business. Now all the data across all their geographies is reflected in coordinated universal time (UTC), so whether a hire begins at 3 AM UTC in Singapore or 10 AM in Brazil, users view this consistently from every location.
Now, regardless where they are working from, the business processes are identical. Documents such as invoices are now in the appropriate languages and currencies and are consistent and standard.
Other rental companies found they were investing too heavily in buying new equipment to hire out simply because they found it difficult to keep tabs on where their existing assets were across the globe and whether it could be transferred in time. Having visibility across all assets allows Ashtead to ensure that equipment is maintained to higher levels of preparedness. This results in shorter delivery times for customers as well as making it easier to move equipment across the globe to better match immediate demand. It therefore helps to save on capex by avoiding the need for more equipment to be purchased.
New technology can also help release ‘hidden’ kit; for example, equipment such as heaters and driers held in warehouses and kept in an ‘under repair’ status so that they don’t appear available to rent out. Latest systems show how long these have been held at this status and these timings are linked to the warehouse KPIs – which can usually help to jog memories and ensure they are soon back in circulation, to help further increase utilization levels.
In fact, having a central source of real-time information can help ensure all equipment is returned on time and help with financial planning. The sales team are now proactively calling their contacts regularly, who now see this simply as great customer service. They save up their requirements in anticipation of the call, as it’s far easier for them to give the business to someone they know, than have to make more calls and take it elsewhere. In other words, the rental company has made more friends – and money – by having a list of everything that’s due to be returned.
New enterprise systems also make it easy for rental firms to introduce an element of CRM to keep track of prospects – and to price and quote to potential and existing customers. Because an order may be made up of many different components – particularly for those companies dealing in low-cost, high volume goods - it may go through many iterations before everything on it is ordered and delivered. Automating processes can dramatically cut the time taken to do this, as well as increase accuracy.
Some of these improvements may seem relatively small – others, such as the introduction of CRM could become huge. But they all illustrate the importance of being totally on the ball when it comes to the current state of play across an entire organization.
Taking the Next Step
In our view, the rental industry has an extremely bright future. However, promising prospects usually lead to increased competition. Only those willing to optimize their use of technology will be able to cut through the complexity to maintain and grow their profitability.
Join our upcoming webinar, IoT for Equipment Rental, to learn how better technology can help your organization realize it's potential.