Supply chain: Technology

Rental requirements

Equipment rental dealers need technology solutions to manage their fleet, their customers and their supply chains. Thomas R. Cutler examines the requirements of this complex industry.


When a customer calls an equipment rental company, nothing is more important than the ability to provide accurate information regarding availability and scheduling. It is equally critical to manage effectively the utilization of the rental fleet in order to maintain profitability. 

Equipment dealers and distributors realize the increasingly competitive nature of their business, making it far more difficult to differentiate from other dealers. Many equipment distributors are looking to improve their bottom line through improved business efficiency; specifically, finding better ways to deal with vendors. Others are looking to grow their business by adopting additional product lines, or new geographies.

Equipment rentals cross many different industries including material handling, agricultural equipment, pumps, power generation, office automation, construction equipment, medical equipment, audio visual equipment, electronic payment devices and likely many more you could name yourself.

According to Grant Skinner, vice president of Equip-Soft, “Rental equipment firms must manage their operations through complete management of short term and long term rentals, consolidated fleet management, instant availability of rentable equipment, easy setup of rental contracts and complete integration with fixed assets and service management. For efficiencies it is also important that technology solutions for rental equipment firms provide easy handling of re-rents, exchanges, and returns.”

Service: A critical component in the rental equipment business
Service is all about being responsive to your customer. Superior service earns a competitive edge, building customer loyalty, fuelling profitability. “Technology solutions must allow equipment rental firms to effectively manage service operations through work order management, service contract maintenance, field service dispatch, meter/counter reading management, scheduled maintenance, warranty tracking and invoicing, as well as mobile service capabilities,” said Skinner.

The key issue with fleet maintenance is keeping an optimum sized fleet of assets running at the lowest possible cost for any given customer. Accurate up to date information about fleet operations and utilization provides a control mechanism for fleet costs as well as simplifying fleet maintenance. Ultimately, technology solutions must provide a deep understanding of fleet usage/utilization while minimizing or even eliminating paper work, a fundamental lean process. 

Selling a piece of equipment must be made less complicated in part by avoiding duplicate data entry. Real-time, accurate information regarding contacts allows for better decisions. “With the right technology solutions, equipment rental and sales professionals are able to effectively work with customers and prospects through opportunity management, campaign management, new equipment sales, as well as industry specific equipment configurators,” said Skinner.

Parts: following the profit
Beyond equipment sales, rentals, and leasing, the profitability often is in the ability to provide replacement parts in a timely manner. To better service customers, equipment rental firms must have the right parts at the right time. Effectively managing parts operations is accomplished with easy parts order entry, the ability to track inventory in real-time by branch/location, as well as track cross-references, substitutions, and supersedes. As part of continued process improvement, it is critical to identify dead stock, minimize on-hand inventory, optimize parts replenishment, and increase warehouse efficiencies.

For over seventy years, Southern California Material Handling (SCMH) has been a leading material handling supplier in the Los Angeles area. The company has grown from a basic equipment dealership to a full service, solutions-based material handling provider that offers analysis and product solutions that maximize productivity and cost efficiency based upon their customers’ unique application and business needs. Tim Cleary, CEO of SCMH, explained their technology selection process. “In our search for a new ERP system, we wanted a system that was leading edge, supported by a viable long-term supplier, with specific knowledge and experience in our industry. Equip-Soft, based on Microsoft Dynamics, fit the bill perfectly. It features high functionality allowing us to manage all the aspects of our complex business, in a user friendly manner."

There are remarkably few software solutions specifically designed for equipment dealers. “By leveraging the integrated Microsoft stack of technologies (Dynamics NAV, Dynamics CRM and Dynamics Mobile) combined with the dealer-specific enhancements that Equip-Soft has made to these products, SCMH is able to remove costs out of their operations, without having to worry whether or not the technologies can work together,” said Skinner. “With the addition of Dynamics CRM and Dynamics Mobile to the Equip-Soft product line, the efficiencies between the sales/service operations with the traditional dealer back office operations are seamless.”

The CRM component is essential
In few industries does the management of customer communication, workflow, and opportunity management mean more than in equipment rental firms. Fully integrated solutions instantaneously familiar to employees and used with ease, drive increased sales and profitability. The ability to quickly access account history and contact information offline, integrate contact information to smart phones (Blackberry, Windows Mobile, or iPhone) automatically is crucial. Managing relationships with customers by developing sales force automation (SFA), opportunity management (OM) and campaign management (CM), must be quantifiable. Opportunity management is a great way to ensure sales teams are spending time with key customers, and that a sales forecast is accurate. 

Managing the equipment life cycle through its useful life in the new and used fleet as well as the rental fleet is key in ensuring the dealership receives the maximum financial benefit of every asset., “With automated workflows and easily customized views to access this information the equipment life cycle aids in maximizing profitability,” Skinner noted.

The fastest way that many equipment dealers are experiencing growth, particularly in expanding geographic reach, is via acquisition. While capturing market share in this manner seems ideal (if the price is right), the ability to integrate the technology solution of one operation into another has often presented special challenges. A scalable implementation process is the only way to ensure that large, mid-size, and small equipment dealers are able to implement technology solutions without taking an eye off the business.

Squeezing the supply chain is not unique to equipment dealers; the increasing demand within the industry to eliminate costs throughout the supply chain is seen as cost stripping and is having a direct impact on profitability. “Often equipment dealerships are seeing no financial gain on the sales of equipment and must look to service contracts for margins and profitability,” observes Skinner. “Having technology solutions that can address these supplier driven demands is the only way these businesses can thrive and in some cases, the only way to survive.”


Thomas R. Cutler is president & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc., and founder of the Manufacturing Media Consortium of journalists and editors writing about trends in