Most construction companies today have large tool fleets—a significant capital expenditure throughout the year. Large equipment is costly but easy to locate. The costs for smaller equipment, like tools, however, add up with each purchase and, being portable, the tools are a little more difficult to track. In many cases, companies don't know how many tools they have, where they are, and if they're all working to peak performance. In other words, large tool fleets come with a series of “unknowns,” especially regarding acquisition, maintenance, and management.
Often tools are acquired when an existing tool breaks down. Because of this immediate need, tools are often purchased from the closest supplier. During a year, many tools can be purchased from a myriad of suppliers. The money spent is often an unknown and with multiple suppliers there's no standard for getting a tool repaired. In many cases, company employees don't know where to send the tool or when they'll get it back.
If an employee does send the tool to the right repair location, there is still a quotation and invoice to process and time without the tool. Most tool repair shops give their customers a choice—to fix just what is wrong with the tool or to completely overhaul it. The latter is obviously more expensive. In most cases, customers choose to repair just what is wrong. The repaired tool is then returned, but a fully-salaried employee may now be working with a tool that isn't performing like it once did—equaling many dollars in lost productivity.
Business in the construction industry has changed greatly during the past 20 years, but “managing” tool fleets hasn't—traditionally done by renting. Tool Fleet Management now offers an alternative.
Controlling unknowns for the long term
Today, most companies use expensive machines to calculate their construction takeoffs and automate their payroll systems. These technologies have reduced administration and eliminated unknowns. Many companies are looking for a similar way to manage and track their tool fleets.
“In the past five years, customers have asked us—either through our sales force or in our market surveys —for a way to manage their tool fleets,” says Nick Townsend, product manager for Hilti. “Customers expect and receive highly innovative products and now want highly innovative services to manage them.”
Townsend says that Hilti developed its Tool Fleet Management program at the request of its customers. “They wanted help with their overall tool management process,” he says. “They recognize the need to improve in this area, just as they have modernized most other parts of their business. They know that product remains important, but process improvement can significantly impact their bottom line. Our program was designed to help substantially reduce our customers' overall expenditures on tools.”
Research shows that up to 40 percent of a customer's overall expenditure on indirect materials (materials that help with the construction rather than direct materials such as concrete, steel and bricks) is tied up in costs for searching, placing orders, and paying invoices. “Effective tool fleet management programs are designed to reduce processing and administrative costs associated with tools and can have a huge impact on a company's productivity,” Townsend says.
Programs like Hilti's can substantially reduce a company's administrative work associated with managing a tool fleet. For example, for a set monthly fee, a customer acquires the tool along with all servicing and repair work. Because all tools are from one vendor, the repair process is clear. Hilti will arrange to pick up the tool free of charge and then restore it to its performance and safety standard. The tools get priority service and are back in the customer's hands in the shortest possible time.
Because the repair time is short, tool fleet management programs help eliminate the cost of renting a replacement tool.
An additional benefit to tool fleet management programs is the impact on a company's overall productivity. “When a Fleet Management Service agreement is signed, the company is sent brand new tools from Hilti,” Townsend says. “These tools have the latest safety and performance features. When a tool expires from the Tool Fleet Management Program, Hilti sends a brand new replacement tool, ensuring continuity of performance and safety. Some of our Fleet Management program customers have also noted an increase in worker morale because they enjoy using their brand new tool fleet.”
The program also helps preserve capital expenditures on tools. A reasonable monthly fee replaces a large upfront outlay of cash for a fleet of tools. This allows companies to accurately budget their yearly tool costs. There are no unscheduled, or surprise, repair bills, so any unknowns are eliminated.