I remember the day that two full truckloads of new equipment arrived. Mechanics, dispatchers, managers, yard guys, and some salesmen gathered and admired the new equipment. I was filled with pride.
One of my salesmen who happened to be there that day, asked me, “How much did you order and on what metrics do you base your purchasing decisions?”
I replied defensively and offended, “After all these years, I know very well what to order and what to replace. Plus, ABC manufacturing was offering a special deal, so I got it.”
That question, however, made me think about what I had really based my decision on, and the more I thought the more I was embarrassed… I realized that I did have all the required data through my rental management software SRM, but I simply didn’t use it.
Tom Landry once said, “the secret to winning is constant, consistent management.”
Although he was referring to football, his idea is universal and can be applied to any business, specifically to managing rental inventory. Gut feel can get an experienced rental manager pretty far, but it’s not enough to win a medal at the Rental Olympics.
Winning teams will embrace Tom Landry’s philosophy. Understanding the value of managing a rental fleet by making educated decisions based on consistent, constant management of its rental fleet.
For educated decision-making, maximizing the use of your rental software is vital. If there is one thing I learned the hard way, it was the true value of utilizing the available features in my software package to record and track data individual rental units…
When you are properly utilizing your software system and keeping reliable records, tracking important benchmarks can be done quickly, automating much of the process with just a few clicks of the mouse.
Having good equipment records will allow you to analyze and calculate important metrics within your business.
Here are some essential data points per rental unit within your software system that will help you with educated fleet management. With these data and possibly some more data in a more sophisticated scenario, you can make educated decisions on purchase and disposal of your fleet:
- Make, model, year
- Acquisition date, Original Equipment Cost (OEC)
- Hours of the asset
- Repairs and maintenance expenses
- Time & dollar utilization
- Rental rates and revenue generated by each asset
- Missed rentals
Plus, this data is essential if you are dealing with lenders or investors, or if you want to explore a potential sale of your business.
I can’t express how much value I unlocked once I started getting the most out of my rental management system. So, I’ll leave you with this;
There is an entire world of hidden value in SRM, and it’s yours for the taking if you’re willing to put in the time to learn.
Thanks for reading!
About The Author
Vahid Hassanpour is the former General Manager of Equipment Operations at Noble Iron’s equipment rental division in Southern California. Prior to joining Noble Iron, he worked in auto part manufacturing for 15 years as Operation and Plant Manager at three companies. His most recent project involved a consolidation of four branches into one strategic location in the Los Angeles area.