The rental equipment market demands exceptionally fast responsiveness and the ability to optimise your fleet, all while managing increasingly tight profit margins. Planning is a critical aspect of any rental equipment firm. To maximise the use of your equipment so that it generates as much revenue as possible you need everything working and available at all times.
Yet rental equipment firms have to deal with unprecedented levels of customer interactions, from quotes to change requests, as well as manage and maintain large amounts of equipment – that can and do break down.
Here are 5 considerations for rental equipment companies to succeed:
1/ Take accurate depreciation into account when setting your prices
Controlling your maintenance costs is an important element of how you set your prices. Yet pricing is still habitually set using your historical data from different sources such as length of rental period.
Depreciation and wear and tear is often not taken into account. Until recently technology hasn’t enabled us to accurately measure depreciation when calculating rental costs. But with the increasing capability of IoT which enables the use of sensors and so on, it is now possible to make more accurate calculations for your pricing. For example if maintenance is proactively managed and planned with the use of IoT tools, savings can be made by avoiding much of the unforeseen costs of maintenance and repairs.
2/ Maximise the billing of equipment
To maximise billing times on your equipment you need to avoid too many gaps in your schedule. This can be extremely challenging especially if you have a lot of equipment and you have to handle a large amount of customer requests to changes in rental times etc. A day where equipment is not rented is a lost day and this obviously has a direct impact on your overall profitability. Many companies also have certain rules, such as hiring out the oldest equipment first. These rules have to be taken into account to ensure planning and profitability is optimised.
Ensuring you do not have days that are not billable is very important. In an industry with typically low profit margins it is critical to ensure complete visibility so you can maximise profit. Digital planning tools such as our Advanced Planning Board (APB) provides you with a centralised tool that simplifies and optimises your planning and integrates with your SAP systems.
3/ Make your costs more predictable
The key to your profit margins in the rental equipment industry is predictability. Whilst the purchase price is fixed, depreciation, unplanned maintenance and rental availability times can be variable and this makes margins unpredictable. Our APB tool enables you to plan your maintenance more effectively and avoid rental voids.
4/ Manage your equipment warranties effectively and save money
If your equipment breaks down and it is still under warranty, you can send it back to the vendor and have it repaired easily and the maintenance costs are free of charge. But if do not have an effective data storage capability then retrieving warranty information may not be straightforward.
Being able to manage this aspect of your equipment is really important. It’s all about storing data in a structured way so that it can be used when needed, and that’s where SAP can help. SAP software makes this easy because you can link your warranty to your service orders and get alerts based on your warranty data.
5/ Make customer interactions easier with online capability
Online reservation capabilities are critical to the ease of renting your equipment and have a massive impact on the overall customer experience. Customers expect to be able to go online, view prices and rental periods, request a quotation, make a reservation and handle the whole transaction without picking up the phone.
- There are a wealth of resources that integrate directly with SAP to help you address these challenges head on and maximise your planning and profitability
- Our Advanced Planning Board (APB) solution provides an efficient and centralised tool that simplifies and optimises planning to manage all of your resources directly in SAP.
- Our B2B Portal & Web Shop solutions ensure you stay ahead of the competition and increase your sales potential. As well as enhancing your service offerings, you will also improve the overall customer satisfaction and experience.
Talk to us about how we can help you stay focused on your business strategy execution by addressing your challenges in the rental equipment market.