The global industrial equipment rental market is on the rise. This hardly comes as a surprise given the lingering market uncertainties due to COVID, supply chain disruptions, associated production delays, spiking raw material and energy prices, and geopolitical tensions.
The increasing high costs to own brand new equipment and new machines discourages companies to own and encourages renting instead. Renting also reduces maintenance, repairs, insurance, and warehousing costs associated with owning. Therefore, equipment rental provides an economical alternative to reduce operational expenditures for companies in various markets.
For example, the global construction equipment rental market size is expected to grow at a CAGR of 4.2% by 2030 according to a recent report by Grand View Research. Additionally, the financial reports of various discrete manufacturing companies that own a rental division show significant growth. Their revenues are more stable than equipment sales and provide a strong base for the overall business performance.
Typical rental markets where the Waylay Digital Twin solution is relevant include:
- Car rental market
- Construction equipment rental market
- Mining equipment rental market
- Industrial heavy machinery rental market
- Medical equipment rental market
- Large scale event and entertainment equipment, and
- Oilfield equipment rental market.
What these assets have in common are that they endure major to very heavy wear and tear during the renting period. Replacing assets after they have broken down is often a very expensive operation for both the customer as the equipment owner. In other words, rental companies want to maximize the lifespan of their assets for as many consecutive rental periods as possible.
Rental equipment is initially recognized at cost and is depreciated over the estimated useful lifetime of the equipment. For example, the following table shows some typical fixed depreciation lifetimes for tangible assets on the balance sheet:
- Buildings: 25 to 50 years
- Machinery and equipment: 3 to10 years
- Vehicles: 4 to 5 years
- Rental equipment: 3 to 8 years
Clearly, solutions that can extend the useful lifetime of rental equipment have a direct impact on the rental business margins. With Waylay Digital Twin for Salesforce, Waylay offers a software solution that enables companies to apply a data-driven asset predictive maintenance strategy to extend the lifetime of these rental assets.
Data-driven predictive maintenance strategies with Waylay Digital Twin
Often, there is no skilled person on-site to perform rental asset maintenance appropriately. Hence, remote and on-site maintenance needs to be performed by a team of field engineers or service engineers from the rental company. Making data-driven asset maintenance decisions can save significant operational costs and also extend the lifetime of the rental asset.
Rental assets that are connected to the cloud provide valuable, albeit raw, live telemetry, which can be used to track the performance of the asset in the field. This data needs post processing intelligence to turn it into actionable data. With Waylay Digital Twin, business users are in control to define, create, deploy and reap the benefits of live asset telemetry analysis logic rules, such that trustworthy actions can be taken to extend the lifetime of the asset.
Typical examples include:
- Based on live asset telemetry and fault codes, determine which component needs to be replaced and how much time is left before the asset shuts down or breaks. This intelligence helps the rental company to optimize field engineer dispatching to perform just-in-time repairs.
- Track how the asset is being operated on-site and whether the renter is operating it appropriately or inefficiently. Actions include notifications to the on-site operating manager with concrete instructions to raise awareness (e.g., don’t keep the equipment idling for long periods), educate them (e.g., how to save fuel), and also create an auditable trace of communication for potential commercial disputes.
- If the asset is consuming raw materials (fuel, oil, battery power, etc.), tracking and modeling the usage pattern is valuable to determine the optimal time to re-fill and prevent asset shut down.
- Determine the need for remote diagnostics and upgrades and determine the optimal time to perform those (as they typically disrupt asset service).
The below picture depicts an example rule in the Waylay Digital Twin app that shows a no-code user interface for the business user to define a live asset monitoring rule that will raise an alarm in Salesforce when the rental asset has been idling for too long. This Salesforce alarm will then be used to trigger a notification to the renter.
Next to extending the useful lifetime of the rental asset, Waylay Digital Twin can also be applied to optimize rental revenue.
Optimizing the rental revenue with Waylay Digital Twin
Once you know the real-time remaining useful lifetime, you can apply a data-driven asset allocation strategy. Your planning tool can select on a deal-by-deal basis the right asset to allocate to the right rental opportunity, e.g., to reserve aged assets for short rentals or less critical assignments. As such, rental companies can squeeze as much life out of the assets based on the history of use, performance, and health and no longer make decisions based on ‘gut feel’ or fixed lifetime estimates.
The rental market also comes with its own specific commercial challenges. When an asset is available for rent, the asset is stored in a warehouse or depot. Most rental contracts have a defined duration with flexible start-of-rent dates and flexible end-of-rent dates. This often leads to disputes and loss of revenue when the customer claims they picked up the asset at date X, started using the asset at date Y, and returned the asset to the depot at time Z. Often, there is a discrepancy between these dates and the registration information entered in the depot management system and the contract management system. This can lead to missed revenue due to undetected over-use of the asset.
With Waylay Digital Twin, rental companies can apply an automated data-driven procedure to update the asset’s rental status in these contract management systems such that undisputable asset over-use bills can be issued. An asset manager can set up and deploy in a matter of minutes our robust out-of-the-box geofencing rules that analyze asset location information, automatically filter out the wrong telemetry, and update the asset’s rental status whenever it is moved outside or inside a predefined geofence (e.g., a geographical area that covers the depot location).
The below picture depicts an example rule in the Waylay Digital Twin app that shows a no-code user interface for the business user to define a live asset monitoring rule that will raise an alarm in Salesforce when the rental asset moves outside a given geofence (e.g., the longitude, latitude and radius of the geofence that surrounds the European depot). This Salesforce alarm will then be used to trigger an update to the asset rental status to ‘start-of-rent’ because it was picked up by the customer and taken out of the depot.
In addition to optimizing the rental asset allocation and preventing unpaid for asset overuse, Waylay Digital Twin also helps to optimize spare part allocation. By using our data-driven performance monitoring rules for assets under rent, asset managers can set up automated procedures to identify the right spare part and reserve it in advance from the warehouse when the rules identify that a component swap is desired. This helps to minimize downtime at a customer’s site when the assets are already in the field. It also helps to optimize the turnaround time for assets that have been brought back into the depot for repair such that they can be made available as soon as possible for rent to the next customer.
In this blog, we explored the benefits of Waylay Digital Twin for rental companies. We focus on how it can trigger automated data-driven predictive maintenance decisions and extend the rental asset lifetime to reduce operational expenditures. In addition, Waylay Digital Twin can also optimize the rental company's top line revenues. We explored how a data-driven automation approach can detect asset over-use and decrease asset rental turnaround time between consecutive rents. There are many more use cases like these. To learn more, please contact us at firstname.lastname@example.org.