In order to improve financial performance, rental businesses are looking at new ways to improve their return on investment and be smarter in how they analyse the performance of their assets.
Equipment utilisation rates are often seen as a fundamental indicator of a rental business' profitability and success, but very little time is taken to understand what the equipment is doing when it is not utilised. Operationally, rental companies should be able to measure how long it takes to deliver a piece of equipment, how long it takes to collect it and how much time it takes to get equipment through the workshop.
With the help of utilisation reports generated at month end, a rental business can make sure that each asset is achieving its target utilisation rate. But in an enhanced and more holistic approach, a new MCS-rm reporting tool means you can go a step further and analyse the gap between an equipment's actual utilisation rate and full utilisation, which is also known as the equipment's downtime.
The true cost of downtime
Understanding the reasons for equipment downtime means you can scrutinise your asset’s rental lifecycle to improve your return on investment (ROI) by breaking it down into its component parts: pre-hire, on-hire and post-hire. Some typical downtime issues might highlight:
• Inefficient processes in your workshop causing delays in getting equipment serviced or fixed
• Supplier delays in getting replacement parts when your equipment is on a works order
• Time wasted on equipment inter-depot transfers
• Equipment not collected promptly after off-hire
Adding these downtime incidents up over your entire rental fleet for a prolonged time period can illustrate significant bottlenecks in your operational processes such as transport, delivery and the workshop. Resolving your downtime inefficiencies will ultimately contribute towards improving your fleet utilisation, profitability and the continual success of your hire business.