How to better optimize the relationship between the companies involved in the renting of construction equipment and the data associated with such transactions were the topics of discussion at a meeting between rental companies, equipment manufacturers, third-party telematics providers and end users last month in Savannah, Georgia.
AEM and AEMP helped to coordinate the meeting at the recommendation of the rental companies.
“To better help our members, AEM has been building relationships with their customers. In order for us to be able to understand where there may be opportunities, we need to better understand the challenges the end users are facing," said John Somers, director of product management for construction, mining and utility, AEM. "We can then share this message with our membership and look for ways to create efficiencies, as well as help everyone have a more successful business.”
United Rentals, Sunbelt Rentals and BlueLine Rental used the forum as an opportunity to share some of their operational challenges as they relate to data sharing and urged the other companies in attendance to work with them to develop better processes for the betterment of all parties involved in rental transactions.
“Preliminary discussions took place and centered around how each party in attendance could better serve another,” said Somers. “There are so many touchpoints between OEMs, dealers, rental companies and end users. The lines of communication need to be open between all parties involved, and information must flow seamlessly. At the same time, only certain individuals should have permission to access certain data."
Operational Challenges and Potential Solutions
Over the course of the past few years, construction contractors have been renting more and more equipment to augment their fleets. A number of unique challenges have come to light as a result of an increased volume of equipment changing hands and a corresponding rise in the number of different types of customers rental companies need to manage.
Approximately 50 percent of all equipment manufactured is placed in the rental industry, while certain categories of equipment are nearly purchased entirely by rental firms. Furthermore, the rental companies in attendance at last month's meeting, United Rentals, Sunbelt Rentals and BlueLine Rental, noted that in aggregate they process well in excess of 100,000 transactions (machines going out or coming off rent) per day and, all together, carry more than 2,000 different types of machines from over 200 manufacturers.
According to the rental companies present at last month’s meeting, companies like themselves are attempting to develop a system that allows them to service two different customers performing two very different jobs, while perhaps using the same piece of equipment on consecutive days. Such a scenario presents a number of logistical challenges for rental companies, including, but not limited to, machine configuration and the need to deliver both equipment and access to its data to the correct customer at the proper time.
“Rental companies view themselves as asset management specialists and service providers,” said Somers. “It just happens that the service they provide is equipment for a given job. They need to make sure it is the right equipment and functions to its full potential. They need to help their customers be more efficient and profitable. And by doing so, everyone in the entire rental chain will benefit.”
According to Somers, some rental companies are in the process of shifting their focus. Instead of being thought of as equipment companies, he said, they would prefer to be known as solution providers.
“By being a solution provider, a rental company serves as the means by which an end user can get whatever it needs to complete a job,” continued Somers. “These solutions could be potentially be structured similar to the ‘software-as-a-service’ (SaaS) model that has been widely adopted in the past decade.”
In the SaaS model, the provider handles maintenance and guarantees uptime. Some in the rental industry seek to move toward a similar solution in the coming years by getting customers the right equipment when they need it, while ensuring productivity and efficiencies.
According to Somers, rental companies are currently focused on four main objectives:
• Dependable service
• Reducing the equipment and operating cost to the customer
• Delivering equipment on time and improving the rental cycle
• Increasing uptime and having the right machines always available to rent.
Many of the current inefficiencies and equipment downtime will be improved – or completely avoided – by analyzing machine telematics data,” said Somers. “Getting that data to the correct person, and that person knowing how to take advantage of it – is where the challenge really lies.”
A number of action items came about as a result of last month’s meeting. They are as follows:
• Develop standard telematics data fields for mobile elevating work platforms (MEWPs) and material handling equipment. Since the majority of all MEWPs and a large percentage of telehandlers sold go into the rental market, this will be the first step toward more easily retrieving useful data from those machines
• These additional, product-specific data fields will be added on to the existing standard (ISO 15143-3) fields
• A Suppliers, Inputs, Process, Outputs, Customers (SIPOC) document will be developed to help illustrate how each entity is involved in the lifecycle and rental cycle of a machine
For more information, contact John Somers, director of product management for construction, mining and utility, AEM (firstname.lastname@example.org, tel: 414-298-4172).
AEM's Thinking Forward feature news series is part of the association's efforts to inform members and generate discussion about emerging technologies and trends that are poised to transform the construction, agriculture and manufacturing sectors. For more information and updates, visit the Thinking Forward web page at aem.org/think .