The biggest challenge contractors face today is in managing the complexity of the modern jobsite to keep timelines and budgets on track. Project lifecycles are lasting longer and owners are demanding more. Project “creep” can affect the scope of the resources required, leading to equipment and workforce issues. Digital platforms can simplify this complexity and help companies make informed decisions that produce tangible productivity gains.
Equipment—both owned and rented—may not be as large a factor as labor or materials, but nonetheless is a strategic variable in the project management equation. Cranes, big iron, pumps, generators and a vast range of other equipment are a barometer of overall project efficiency. How a contractor utilizes equipment is often reflective of how he or she deploys people and other project components—exposing pressure points on labor and materials and pointing to opportunities for cost and time savings.
The idea of applying technology to equipment fleet management is not a new concept. There’s no lack of options with available solutions, between OEM equipment providers, independent telematics and telecommunications companies, and build-your-own software programs. Rather, fleet decision-making can be paralyzed by having too many options that create a focus on features instead of key benefits, such as mitigating idle equipment and understanding the root causes of equipment failure.
In addition, a contractor who operates with multiple technology systems can be hobbled by islands of information, where equipment data is isolated from project planning and labor tracking. This can diminish the usefulness of analytics. Data must be analyzed in combination in order to provide meaningful insights about the bidding, planning and managing of future projects.
The best way to eliminate any obstacles is through digital transformation—which includes operational change as much as the application of technology. Digital transformation involves deploying digital systems to manage equipment fleets, using data from those systems to drive operational change and employing benchmarking to achieve best-in-class performance.
Go Digital: First Step to Transformation
Mixed fleets, consisting of owned and rented equipment, are a reality for most contractors. Add the complexities of managing equipment across multiple jobsites and field offices, and a company can end up not knowing what equipment is at hand, where it’s located and whether it’s really needed. If just one essential piece of fleet is mismanaged, the resulting inefficiency can trigger jobsite disruptions and delays.
Information about equipment—its cost, whereabouts, utilization and operating condition—can be as valuable as the equipment itself in terms of project success. To be truly effective, equipment fleet management requires a single digital system of record for all equipment on site.
This is especially important for rented equipment, which can be driven by time-sensitive and unexpected needs. Rental is a responsive solution, but it can also disrupt a pre-determined fleet plan and cloud visibility into costs and utilization, making it easy for projects to go off schedule or over budget. This is particularly true if rentals need to be added “on the fly” during the course of a job.
A digital fleet management strategy that integrates owned and rented equipment, and is managed cohesively across the organization, gives everyone visibility in the context they require to make good business decisions. It also positions contractors to gain more value from rental expenditures.
Boost Value: Drive Operational Change
The next step in digital transformation is to tap into the data from digital systems and make operational changes. Rich data enables contractors to investigate the productivity levers of equipment consumption and utilization. Consumption is how much equipment a company uses; it’s driven by the amount of equipment on rent and the rental duration. Utilization is how efficiently a company is using equipment. Utilization measures vary significantly by equipment category: for instance, low utilization may be acceptable for a generator intended as a backup power source, while an aerial lift should show higher utilization from near-constant use.
Better, more comprehensive data about equipment consumption and utilization brings agility to the planning and management processes, which in turn extracts more value from equipment costs. For example, a project supervisor who can easily locate a machine on site can ensure that it gets used. This same information can help project planners deploy rented equipment to the right site at the right time as demand picks up—and just as readily take equipment off-rent as demand cools. A contractor can secure the best equipment rental rates in the market, but if the equipment isn’t utilized optimally, there’s no actual savings.
Companies that integrate equipment data into their planning process find that they can do more work with less equipment. These contractors achieve higher utilization of the equipment they have (rented or owned) and reduce their spend on add-on rentals or capital purchases.
Uncover Opportunities: Benchmarking to Best-in-Class
Transformation demands that a company look beyond its four walls for improvements. Benchmarking allows contractors to uncover the unexpected; it provides a unique point of view on how a contractor’s performance ranks compared to peers. Equipment utilization can be scored against industry benchmarks, pinpointing opportunities for improvement and quantifying the dollar impact.
Using the benchmarking process, contractors can rank every piece of rental equipment across a project and jobsite—measuring utilization and days past due—against industry norms. If, for instance, a company finds that its equipment utilization ranks below peers, the solution could include setting up low utilization alerts in the fleet management system to flag potential issues or reviewing GPS time-and-use reports weekly.
Digital Transformation Drives Strategic Excellence
It takes quite an effort to improve how an organization consumes rental equipment. But it’s worth the endeavor because a best-in-class rental strategy can transform organizational behaviors and deliver real cost savings. Today’s complex, ever-changing jobsites demand constant agility. Going digital in fleet management provides a live, in-game action plan so that real-time equipment decisions are no longer made with outdated information. It also enables true digital transformation, where equipment, data and decision-making coalesce to improve productivity and inform investment.
