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Is Rental a Service of Proximity?

local map   CC photo 1442849914809 0df6c377974f

One of the mega-trends that is hitting the construction market currently is globalization. Construction companies are looking further afield for materials and technologies to deliver buildings and infrastructure projects on tighter and tighter margins. Globalization obviously affects many industries and is an undeniable force in our world today.

For many rental companies, rental remains a service of proximity. If you talk to many of the national and international rental executives they’ll tell you that actually the one person it’s difficult to compete against is the local company in a local market.  They are always a little closer to the customer and a little more conversant with local issues. Many large rental companies strive to deliver a local service, encouraging branch and depot managers to develop relationships with their local customers and to act as independent, entrepreneurial profit center.

Increasingly though construction companies are actively looking for ways to remove local from the equation. Construction companies with national or international portfolios need to prove best practice and best price have been adopted to their shareholders and customers which means that local may not be the right solution. For these companies, there is a cultural change beginning where project managers and job supervisors are being actively encouraged to stop using local players.

In this equation agreed rates, terms and conditions, and the quality of maintenance are bigger considerations than the proximity of a supplier. We have a construction client who has recently proved that though transport costs can be higher, the net savings of using national suppliers under framework agreements is substantial over the entire length of a project. This defied the expectations of the local project team who genuinely thought they were saving money and time by renting locally.

Construction companies are looking for rental companies that can offer economies of scale. They are looking for companies that can collaborate with them to find ways to reduce the response time lag from job site request to delivery of equipment. They are searching for partners to be more responsive and pro-active in providing reminders and notifications of approaching maintenance and off-rent dates. As well as looking for companies that provide reliable equipment that is easy to use and train, that is not subject to mechanical failures.

Those rental companies that can think collaboratively and work with the construction industry to develop new ways of working, using technology and digitalisation to the fullest and delivering real benefit to their construction clients in this increasingly global market, will develop new and stronger relationships with their construction clients which will be difficult for competitors to break.

Wynne is in the unique position of providing software to top construction companies in addition to top rental companies. We can provide a bridge between the two industries which will strengthen the partnership and improve business.

Written by: Helen Sowerby, Director of Business Development
Photo by Milada Vigerova under Creative Commons Zero License

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