SmartEquip Founder Talks Fleet Optimisation
Smartequip, the world’s leading provider of equipment lifecycle management and parts procurement solutions, is celebrating its 25th year of improving equipment uptime, while streamlining workflows to reduce costs for servicing diverse fleets.
EQUIPMENT OWNERS FACE many challenges throughout the lifecycle of their machines — from minimising downtime of an asset to navigating complex supply chain disruptions.
Question is: what can you do to better understand your total cost of ownership and maximise your return on investment?
“Lifecycle economics are very simple,” says Alex Schuessler, SmartEquip founder and president of the company’s international group. “To start with, there’s an initial acquisition cost and an eventual, end-of-ownership disposition return. And, between the two, throughout my owning the equipment, I face parts and service costs, trying to minimise both while at the same time, maximising uptime and thus my overall financial returns.”
“Get all four of these right and you are optimising your equipment lifecycle!”
Lifecycle economics are driven by equipment uptime on the revenue side, plus service, repair and maintenance on the cost side. Efficiently managing the lifecycle therefore helps owners get the highest overall yield possible.
It’s between the ownership bookends — of equipment acquisition and sale — across equipment parts and service, where SmartEquip comes in.
SmartEquip is a global, unified multi-manufacturer platform supporting intelligent serial-number-specific service support and parts purchasing. The company was founded in the United States 25 years ago and is now the global leader in equipment lifecycle management, service and parts procurement support. In 2021, SmartEquip was acquired by Ritchie Bros., becoming part of its suite of ancillary services, now existing within the RB Global, Inc. portfolio of brands.
SmartEquip globally supports over 120 equipment rental fleets across North America, Europe, and Asia Pacific, including the world’s five largest rental companies, United Rentals, Sunbelt Rentals, Aktio, Loxam and Herc. Over 90,000 technicians across more than 70,000 locations around the globe are connecting to their suppliers across the SmartEquip Network, receiving fleet-customised support for close to 800 different equipment brands. Each year, approximately USD $2 billion in parts are ordered via SmartEquip.
The company’s suite of solutions integrates with a fleet owner’s business (ERP) system, optimising inventory while supporting automated parts and work order generation, significantly improving technician productivity and raising equipment uptime.
As Alex explains: “With SmartEquip, owners generate greater revenue through improved uptime, while simplifying and accelerating parts procurement and decreasing service time,” he says. “Taken together, they drive improved earnings and profitability.”
“As a digital platform, we connect every asset in a fleet directly to the manufacturers that have built it, as well as to the suppliers that support it,” he says. “There’s real-time coverage with self-updating service documentation and operator guides, as well as always-current parts catalogues, front-ending highly simplified parts purchasing.”
Furthermore, the system integrates seamlessly with the fleet owner’s own inventory systems: “When you click on the interactive parts catalogue, our solution tells you which of these parts already exist in your own stock or inventory, alongside showing external sourcing and pricing information of your suppliers,” says Alex. “It is a fully streamlined, seamless process.”
SmartEquip is entirely agnostic regarding where a company sources its parts. “Our platform does not dictate where you purchase your parts,” says Alex. “That decision is obviously the business owner’s, and we care only that your employees can accurately identify the right parts and order them quickly, thus freeing up time for technicians to be repairing equipment, rather than chasing information and filling out paperwork.”
This combined focus on simplicity, accuracy, and speed embodies the Total Cost of Ownership (TCO) mind-set which led to the founding of SmartEquip in March of 2000. Unlike other solutions emerging at that time, during the “dot-com” revolution, SmartEquip’s focus went far beyond the transactional boundaries of e-commerce, by looking at the far richer area of operational efficiency improvements.
“You save cost on parts, by ensuring the right part is bought from the right source at the right time, certainly. However, you generate far greater savings by reducing a service technician’s time needed to conduct a repair,” he adds. “And finally, and most impressively, if you are able to reduce the time of a repair by four or five hours, you have just improved equipment uptime by the same amount! Given the absence of variable cost, whatever additional revenue you generate at that point, for example via one more rental, is essentially pure profit,” says Alex.
“So yes, parts and especially service cost savings are substantial. And yet, it’s the additional equipment availability which is by far the most valuable part.”
Alex says companies new to the solution quickly see the benefits to be gained.
“For many of our customers, depending on fleet composition and average age, annual parts expenditure is around two per cent of the original fleet acquisition cost,” says Alex. “It is quite standard that rental companies using SmartEquip can reduce this amount by five to 10 percent.”
“Where it becomes more interesting is that service cost (between internal and externally outsourced labour) also runs about two percent. And here SmartEquip’s savings can be anywhere between 30 to 75 percent! That is a high multiple of what you can achieve by looking to purchase the cheapest part.”
“Finally, fleets that use SmartEquip typically have a four-percentage-point greater financial utilisation than those that do not. This revenue impact usually dwarfs the parts and service cost savings. Taken as a whole, you have just revolutionised your entire equipment lifecycle.”
To learn more about the SmartEquip platform, stop by for a chat at HIRE25, Stand 34 in the Exhibition Hall (4-5 June) or visit www.smartequip.com to request a demonstration
