When contractors use high-tech methods for equipment management, suppliers such as rental companies also benefit.
Technology has improved virtually every aspect of our lives, including business. Computers, robotics, data security and myriad other high-tech methodologies have increased the efficiency, accuracy and productivity of almost any industry you can think of.
The construction sector, however, has not embraced the advent of technology quite as readily as others. If construction were a student, it would be the kid that slipped through the cracks. Or, to put it in terms of an educational program instituted by former president George W. Bush, construction could be viewed as the exception to “No Child Left Behind.”
However, that trend has been reversing in recent years. Take robotics, for example. Using robotics has allowed many construction companies to produce better quality work; solve the issue of skilled-labor shortages; and make the industry safer by taking the more dangerous and laborious tasks out of the hands of workers. Ultimately, robotic solutions have helped improve the quality, safety, and productivity of the construction industry.
And it’s not just robotics. Egnyte, a leading Cloud Content Collaboration Software company, featured a blog in which they identified the top 10 Construction and Engineering Technology Trends to Watch in 2021. It’s an eclectic array of methodologies: cloud computing, AI, digital data, and systems integration are just a few of the advanced methodologies that are gaining traction in the construction field.
Unfortunately, the construction industry still finds itself in the Middle Ages when it comes to equipment management, both rented and owned. For too long, commercial contractors and construction companies have managed their rented and owned equipment using old-school methods, including spreadsheets and the even more medieval whiteboard.
Inefficiency is often the result. Machinery is lost. Time is wasted tracking it down. Data entry is time-consuming. Duplicate rentals are a common occurrence. Overdue rentals rack up overdue fees. And if someone accidentally erases a whiteboard, forget it. Ultimately, it isn’t just time being wasted ““ it’s money. Lots of it.
What’s more, although the process of renting equipment from rental suppliers has actually become easier, managing all those rentals has become more complex, especially when the equipment comes from multiple suppliers.
All hope is not lost, however. Over the last few years, a number of platforms and technologies have allowed contractors to efficiently manage their owned and rented assets. For rental equipment, many of these tools allow contractors to see, in one place, all of their equipment out in the field; the location of each piece of machinery; payment terms; and the date each item is due back at the supplier. The better systems even offer one-click call offs (calling rented equipment off on time is an area of huge potential savings), as well as alerts and inventory summaries.
Now as a rental company, you’re likely thinking, “That’s great, but how does the construction industry’s embrace of technology to better manage their rental assets make my business better?” The fact is suppliers benefit in a number of ways. Let’s examine them:
Ordering equipment is simpler and quicker
When a construction company or contractor orders equipment directly from a supplier, it can be time-consuming. Not excessively so, but ordering through an asset management system can literally be done with the touch of a few buttons. So not only does it free up more time for the contractor, it does the same for the supplier. It may only be fraction of time, but a few minutes or even a few seconds have a way of adding up. And for the supplier, that time can be spent generating new business.
Ordering is more accurate
Many of the larger rental companies have their own portals through which customers can rent equipment. In these cases, ordering accuracy is generally not an issue. But for smaller companies who handle orders by phone or email, mistakes can be made. Maybe the supplier hears the order wrong or enters the data incorrectly ““ a problem which prevents the contractor from getting exactly what they want. A well-designed automation platform will reduce potential mistakes and save headaches for both customer and supplier.
Building stronger customer relationships
Some suppliers fear that the loss of direct contact with their customers can negatively affect the customer/supplier relationship. Nothing could be further from the truth. Ultimately, as a supplier, you want contractors to have the best customer experience possible; being able to simplify the ordering and management process through high-tech automation will help achieve that objective. And the fact that your customers use this technology does not preclude contact with them ““ you can still reach out to them on a regular basis to ensure that everything is going well; to upsell them on new or improved products; and to listen to any concerns they may have.
Fewer overdue rentals, Part I
If a contractor keeps a piece of equipment past the date on the rental agreement, they obviously incur additional charges. Many of the newer technologies will remind the renter of when the equipment is due ““ not just the day before, but several days before and multiple times, reducing the chance of overdue rentals. Again, larger companies with the necessary resources may send out reminders to their customers, but small- to mid-size suppliers, not equipped with the same resources, are relieved of that burden. And even though a supplier will not turn away revenue, even from overdue rentals, the fact that technology can help a contractor avoid them will go a long way towards keeping the customer-supplier relationship amicable ““ and profitable.
Fewer overdue rentals, Part II.
As noted previously, an overdue rental, for better or worse, means some extra revenue for the supplier. But the benefit of that revenue is short-lived. Let’s say an excavator was due back at a supplier’s premises several days ago. Another contractor calls and asks to rent one, but there are none left. If the overdue excavator had been returned, there would be one in stock for the caller. There may even be several excavators overdue, which would certainly exacerbate the situation. The contractor who called looking for the excavator now has to go somewhere else for the equipment, and a sale is lost ““ not to mention the opportunity to build and enhance a long-term relationship.
All of the above are sound reasons that high-tech equipment management provides upsides for both contractors and their suppliers. But in a post-COVID-19 business environment, the benefits are amplified. COVID-19 obviously had a negative impact on the demand for construction equipment rental market globally. But with the reopening of the global economy, especially domestically, the demand is gaining momentum. As construction companies and contractors increase their workload, there will be an accompanying need to rent and purchase more equipment.
In a report produced by research firm Mordor Intelligence, the worldwide construction equipment rental market was valued at U.S. $103 billion in 2020, and, despite the impact of the pandemic, it is expected to reach U.S. $137 billion by 2026.
And let’s not forget the impact of the Infrastructure Investment and Jobs Act. The bill will mean a huge increase in construction projects, and an even greater need for equipment rental to become faster and simpler.
There’s no question that contractors reap huge benefits from the use of technology to manage their rented assets. But rental suppliers benefit as well, without even pushing a button.
Jason Perez is cofounder and CEO of YARDZ, a leading technology platform in the management of rented and owned assets.