When an industrial construction company based in the Southeast set out to build a fabrication plant for a manufacturer of wood-alternative decking, project managers knew they’d have to tool up.
The 11-month, out-of-state project with 250 craft workers on site would deplete the company’s entire toolkit, leaving it with insufficient tools for other clients.
The question was, should they buy or rent tools for the project?
Rental benefits by the numbers
“A contractor has to factor in not only the cost of buying equipment and backups, but also repairs, administration, warehousing and industry average losses,” said Candice de Melo, United Rentals regional product development manager.
For this project, the company ended up renting 100% of the necessary tools. “We made it make sense,” said de Melo. “We sold them on our proven track record of keeping customers on budget.”
United Rentals supplied a managed 53-foot tool trailer stocked with exactly what was needed during each phase of the project, including backups. The strategy manages consumption compared with offering what de Melo calls a “candy store.” For a job this big, United Rentals also provided shipping containers with large items such as benders, threaders and tuggers.
We were able to separate tooling based on their
reimbursable limit, which allowed them to pass costs onto
their client, at a markup, and minimize their exposure.
A barcode system was used to track who took what and when, which helped to eliminate hoarding. At the end of each 28-day period, United Rentals provided utilization metrics. Any items that weren’t in use were taken “off rent” to keep the budget in check.
The proactive approach delivered promising results. The bill came to $562,000—a savings of 32%— and $262,600 less than what the company would have spent if they had bought, stored and managed the tools themselves.
Meticulous accounting drove some of the savings. Purchases of specialty tools which cost more than $500 were reimbursable by the company’s client.
“We were able to separate tooling based on their reimbursable limit, which allowed them to pass costs onto their client, at a markup, and minimize their exposure,” said de Melo.
Locating tools missing in plain sight
Tool theft was a major problem, one that was difficult to manage remotely. At the end of the job, more than 50% of the rented equipment was reported as lost, at a replacement cost to the company of more than $175,000.
United Rentals sent personnel to walk the jobsite and found most of the lost equipment, including 10 pieces of specialty equipment that alone added up to more than $100,000. After the hunt, the company was on the hook for just 7% of the missing equipment.
The contractor was so impressed with the overall results that it engaged United Rentals to take over operation of the tool crib at its headquarters. Now, project managers and workers can find what they need quickly, saving precious time and money