In equipment utilization as in everything else, you can’t manage what you don’t measure.
Many companies in construction and heavy industry have a blind spot around equipment usage — one that’s costing them billions of dollars. A Texas A&M University study found that 82 percent of survey participants believed increasing equipment utilization could increase ROI, but nearly half of those same respondents did not track or measure it.
You can’t manage what you don’t measure
How much equipment do you currently have? Where is it? How much are you paying for it? How often is each piece used? Many companies can’t immediately access answers to these questions. As a result, they can’t effectively manage their fleet, and they overspend as a result.
“Companies leak money by keeping rental equipment longer than they need to, but unless they’re carefully tracking their consumption, they don’t even know it,” said Brendan Shannan, manager, process improvement at United Rentals.
A boom lift that rents for $1800 per month becomes much more expensive the second it is returned late. Keeping it one day past its estimated return date incurs $200 in additional rental fees, or 11 percent of the estimated rental cost. Three days past due incurs $600, or 33 percent of the estimated cost.
The fact is, 24 percent of rental equipment is returned 15 days late.
Over-consumption isn’t the only issue. Under-utilization also threatens the bottom line. How often are you using that excavator, generator, aerial lift or reach forklift? Is a piece of equipment sitting idle longer than it should and therefore wasting money?
Some forward-thinking companies are leveraging digital tools in order to close the fleet management efficiency gap. Low-cost sensors embedded in equipment, combined with GPS, telematics and high-powered, cloud-based software and services are helping them improve their bottom line by providing critical insights into consumption and utilization.
For United Rentals’ customers, Total Control ® is a fleet management solution designed to manage costs by optimizing the amount, length and utilization of the equipment on rent. Real-time alerts and reporting enable data-led decisions. Together, Total Control ® and UR One, the company’s digital platform offering one-stop access to products, tool, information and services, provides a single system of record to help drive decisions that reduce days past due and increase utilization and consumption.
Total Control® can help you do more with less equipment and even help you reduce your spend on rented equipment by prioritizing owned equipment.
For customers and non-customers alike, United Rentals’ free Benchmarking Service can tell you, based on United Rentals’ vast store of proprietary data, how your utilization of every piece of equipment across nine product types compares to the industry average.
Improved fleet management through the use of digital tools presents an opportunity to return billions of dollars to the sector’s bottom line. But it’s up to each company to understand where its consumption and utilization stand and take informed action to improve them. The data is there.