Equipment

United Rentals Helps Customers Optimize Equipment Rental

The fourth episode in the Precision Construction series explores how United Rentals uses the internet of things to save customers time and money.
By A. Vincent Vasquez
March 14, 2019
Topics
Equipment

This is the fourth article in the Precision Construction series, which explores the application of the internet of things to digitally transform the construction industry, ultimately with the objective to improve labor productivity, reduce costs and enhance safety. The series began with Exploring Digital Transformation for Construction, followed by Simplifying Complex IoT SolutionsUnited Rentals Drives Efficiency & Excellence with IoTRobotic Masonry, Mixed Reality for Construction: Applicability and Reality, Taking Environmental Monitoring to a New Level and Digital Transformation – Enabling New Business Models for Construction. Articles generally follow a five-layer framework, described in Simplifying Complex IoT Solutions, that makes it easier to understand digital transformation solutions. To learn more about the various technologies described in this series, visit PrecisionStory.com.

In 2017, a large power company announced the winning contractor to run a solar energy project with a total capacity of approximately 300 MW. This was part of an extensive renewable energy program designed to provide enough electricity to serve about 100,000 homes with clean power. With capital costs estimated at less than $1,500/kW, these would be among the lowest cost solar installations built in the United States. In support of this contract, the awarded contractor rented machines from United Rentals.

To help the customer better optimize its equipment rental throughout the project, United Rentals Control focused the program on utilization measured through Key Performance Indicators (KPIs) based on data provided through United Rentals’ Total Control® solution.

Things

A variety of machines were rented by this contractor, including skid steers and utility vehicles. Data was retrieved from all machines using Total Control®, United Rentals’ telematics-enabled fleet and equipment management system that provides visibility into both rented and owned equipment with an objective of improving utilization, maintenance and uptime.

A focus of the program for the contractor was to provide visibility into rental utilization. Various pieces of general rental equipment were assigned their own utilization benchmark goals. For example, the customer had a benchmark goal for utility vehicles of 22 percent time utilization across all jobsites. For skid steers, the utilization goal in some cases was set at 200 percent of the industry norm because of the type of work being performed.

Connect

All machines had telematics edge devices installed for the retrieval of data from the field. Older rental machines were retrofitted with a device sourced from ZTR that provided run hours, location, battery level, fuel level, driver ID and external conditions. Newer machines that came telematics-enabled from the manufacturers had a custom ZTR device installed. This device provided the same data as the retrofit use case, plus equipment monitoring data such as error codes. Finally, for temporary situations, a portable “Slap Track” device was installed to provide machine location and an estimate of run hours based on vibrations.

Collect

Collected machine data was communicated to Total Control®’s backend systems running on AWS. Data was stored using many different technologies, such as SQL, NoSQL and flat file, in order to optimize the performance and data retention for all of the different customer use cases. Time-series data targeted operational needs by providing current values, recent history and real-time events for fleet tracking, equipment health management and system integrations.

Aggregated data was used to drive reports and business intelligence to support analysis for fleet optimization and contract management.

Learn

By connecting the machine and the customer, United Rentals was able to use data collected by Total Control® to learn how they could deliver a higher quality service to the contractor, as well as save them money. The four KPIs they focused on were: on-time delivery, service calls, exchanges and machine utilization.

Figure 1. On Time Delivery Example (Customer actual data changed for privacy reasons)

KPI: Lead Time and Delivery Performance

United Rentals started with measuring and reporting on-time delivery performance. This was important for two reasons. First, United Rentals gave the contractor an on-time delivery guarantee for orders placed with a minimum of 72 hours’ notice, so they needed to track if they were delivering equipment on time per this guarantee. They also wanted to know if failure to deliver equipment on time was due to short lead time requests by the customer.

United Rentals reported not only on its ability to deliver on time, but it also mapped this to the amount of notice, as shown in Figure 1. This transparency with the customer held United Rentals accountable for on-time deliveries while also showing the contractor how late-notice orders impacted the on-time delivery of the machines.

KPI: Service Calls
Service calls were also measured, as shown in Figure 2. Service calls included events such as engine issues, air conditioning not working and tire problems. One common service call was repair requests for air conditioners. This isn’t too surprising considering the weather at the sites was over 100+ degree heat and 90 percent humidity.

Upon further investigation, it was discovered that many of the repair requests for air conditioners came from cabbed equipment that was being used by workers solely for the purpose of cooling down. The high utilization data from the running vehicles along with the common issue of broken A/C units on those vehicles provided an opportunity for the contractor to better manage its process for helping employees deal with the elements while also avoiding unnecessary equipment service costs.

Figure 2: Equipment Exchanges Example (Customer actual data changed for privacy reasons)

KPI: Equipment Exchanges
Equipment exchange data was also collected as shown in Figure 2. In fact, the data showed an abnormally high level of exchanges in month 4. After the team investigated why and the root cause was determined, United Rentals and the customer worked together to identify equipment better suited to the customer’s needs.

KPI: Utilization Performance vs. Benchmark

Finally, the most important metric was utilization against agreed upon benchmark performance objectives. As a company that collects nearly 10 million lines of data per week, United Rentals is able to calculate statistically reliable benchmarks by industry and application, ultimately providing the customer with unique insights into how they perform against an anonymous peer set.

Utilization performance means actual hours used versus hours rented, while the benchmark represents an industry utilization benchmark. 0 percent reflects that actual utilization is at the benchmark value. To further elaborate, if the utilization data is above 0 percent, say at 20 percent, then this means utilization is 20 percent above the benchmark.

The significant dip in utilization that occurred around week 22 shown in Figure. 3 was a result of a temporary change in project management. Once this was identified to the customer, they were able to take steps to remedy the situation.

Figure 3: Example Utilization Performance versus Benchmark

(Customer actual data changed for privacy reasons)

One of the reasons the customer’s utilization was mostly good is that alerts were set up in Total Control® to send automated emails if a machine had sat underutilized for three days. This notified the contractor to investigate those machines and enabled them to decide whether to off-rent the underutilized equipment or start using them more.

Do

In the end, United Rentals helped the contractor save over 12 percent on rental costs for an approximately $7 million project. But it’s not only a story about saving money. It’s also a story about United Rentals helping the customer by using data and insights to deliver better service.

Weekly reports went out to the contractor’s executive staff and project managers that provided the customer with visibility—mid-month or mid-bill cycle—to fuel discussions. With a common view of the data, in the meetings, the United Rentals team discussed service issues, utilization, exchanges and upcoming rentals. They also talked about the opportunities to off-rent various machines based on their overall utilization for the last month. Project managers used the data from Total Control® to see outliers in the data and then investigate those on site in order to make better utilization decisions. Essentially, United Rentals and the customer focused on the issues rather than on what was going well, something United Rentals calls ‘management by exception.’

In the end, the relationship evolved from being transactional to one where United Rentals was invited to consult on opportunities for the customer to improve its operations. Of course, at the heart of enabling this program was access to the data.

The next Precision Construction episodes will apply this Precision IoT Framework—Things, Connect, Collect, Learn and Do—to help discuss real world digital transformation solutions being applied for construction.

by A. Vincent Vasquez

Vince Vasquez has more than 30 years of experience in enterprise sales, marketing and engineering. Working with 20 industry leaders, he is the co-author of Precision Construction, which teaches the fundamentals of IoT with a focus on the construction industry. He is also the co-founder and CEO of PrecisionStory, which brings Precision Storytelling—a new and innovative approach to enterprise storytelling—to market. Vince has an MBA from Stanford University, an MS in Computer Engineering from Carnegie-Mellon University and a BS in Electrical Engineering and Computer Science from the University of California, Berkeley. 

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