As we talk about measurement and monitoring performance within the fleet, I think it's very, very important for a rental manager to have good data. It's more or less like trying to fly an airplane without having good instrumentation. You don't know whether you're going up or down, and you don't know at what speed you're going up or down. So I would highly recommend that you try to organize the data within your computer system to organize classes, categories and classes of equipment so that you can do really good analysis work. Having just kind of a numerical listing of all your fleet does not allow you to get a good look at what's happening. So I suggest that you create an income report that looks something like this, that you've got categories and classes, and in this illustration, category 100 is talking about loader backhoes. So I can see this report in detail, or I can actually summarize this and roll all of this up into category 100 loader backhoes, and then as you can see on that bottom line, I can see that I've got six of them. My total investment is $602,000, and I can see what my month-to-date rental revenue, my year-to-date, my life-to-date, and I can see what my last 12 months financial utilization is of those machines. And so if that number is not suitable to me, and I'm trying to understand what the problem is, then I can easily click into the detail, and I can see the different classifications of backhoes, and most likely I can find the one or ones that aren't performing very well. So organizing your inventory into category classes, I think, is critically important as a rental manager. Another report you want to take a look at is the same thing with time. So I've got my category class up there, and then I want to be able to see the activity of this group of equipment. So if it was a summary report, I'd look down at my timeout utilization, and I'd be able to see in the current month, my time utilization on these machines is 70.2%. That's outstanding. I can see for the year that it's 58.9, so it suggests to me that there's a little bit of seasonality, and I must be doing better right now than I was doing. And then I can see life to date, that I've had a pretty high average. So a time utilization report in real simple terms, so that you're not having to do any calculations, the computer's doing it for you. You want to be able to see month-to-date activity, you want to see year-to-date, and life-to-date. And then, of course, it does matter when did these machines come into your fleet. And so that's the column that says age in months, because you wouldn't see a year's worth of activity if the machine's only been in your fleet for six months. So now that we've potentially got some reports to look at for income and time utilization, the key is we want to identify the winners and the losers. And so let's start with the winners. You'd be looking for machines that had high time utilization or higher financial utilization than you might have expected. And some of the questions you need to be asking yourself are, why are these machines doing so well? It's quite possible that you've got a machine that is out on a job that maybe is running two shifts, and maybe what's really happening is you're getting double revenue, because you're getting one and a half or two times your normal rate, because it's being used so much. Or it could be that if you're on a four-week billing cycle, that it happened that you billed it on the 1st and the 29th. And so that particular month, you actually got to bill twice in a 30-day period, which would skew your numbers. So you do need to think it through, dig down into the weeds a little bit to try to figure out why are we doing so well, and is this going to sustain? And then what about the competition? I mean, if you start to do well in an area, usually other competitors start to find out opportunities and they come after you. And then the question that you can ask yourself, actually two questions, any time that you have a particular category, group of equipment that's excelling, your question that you should be asking is, how do we know if we should add more units, or should we raise the rental rate? And a lot of that has to do with how you think about the future. So if you can look at the sustainability of that revenue, that might encourage you to put a few machines in your fleet. You may also start to look at the age of your machines, and you say, OK, I've got a few older machines here, and I'm going to add some newer ones, and now's a good time to do that. And if the market softens in any way, I can weed off some of the units, some of my older units, and I can get back to an inventory level that I'm comfortable with. So those are a couple of the things that you want to consider about potentially growing your fleet or raising the rate when things are good. Now let's look about the losers. Typically, what I'm going to try to do is determine, how is this category of products actually working? And I'm going to draw a line in the middle and determine what is average. And so then I want to look at all the machines that are performing less than the group average and try to figure out why. Why is this particular group underperforming, for instance? So why might the 80-horsepower backhoes be doing worse than the 100-horsepower backhoes? Maybe customer demand, they want the bigger units. This can happen, if you have skid-steer loaders, for instance, this can happen real easily because customers want production. So there was a time, 15, 18 years ago, that a 1,300 or 1,700-pound capacity skid-steer loader was pretty popular. Now the 2,300 class is very popular because people have really learned how to use those machines and they want productivity. So now the 1,300-pound class isn't very active. So in analyzing your fleet, you'd probably come to recognize this if you broke it down by category class. And then your decision you have to make is, should we get rid of a few machines? Or is this a temporary dip in the marketplace and it'll be back? Maybe for some reason, the dip has to do with seasonality. So don't be too quick to run out and try to liquidate your fleet. You really do need to go through a systematic approach to understanding, why are these machines not renting? To illustrate the idea of looking at averages, we'll take this same category class listing and we'll look at, what is the average? So I've created an average line, basically, and you could get this put into your report mechanism on your system. So then I can see the average cost of a backhoe in my fleet is about $100,000. I can see what my average month-to-date revenue is. And then I can look at my year-to-date and life-to-date. So I can easily look up and down those rows of machines and I can determine which of those units is under. So I could determine that if my year-to-date average income was $4,500, I could look at backhoe number five and see that it's only got $3,700 income. So that's not too bad off of $4,500. But if I look down at number three, 00903, I've got $2,685 income. I'm probably going to look at that machine and try to figure out what's going on with that machine because it is woefully under all the other machines. And so is there a problem? Has it been broken down for some reason? Has it got some type of functionality that people don't like? Is it just a matter of kind of the first in, last out type of thing? It's gotten stuck in the back and it just hasn't been part of the rotation. But that's how I'm going to look and determine where my low performers are. And I can also do this looking at time. So I can see that the days on rent, for instance, for year-to-date is 33 days and actually not doing too bad there. That's a pretty strong representation. So the worst one I've got is a backhoe number five, which is 26 actual days out on rent. My group average is 33. So if I look for low performers on this, if I look for my year-to-date, I've got one strong player number six that's 40 days against 33. And that's really the one that's pulling everybody else up. The rest of the averages are right around the 30 mark. So I wouldn't get too excited. I wouldn't see anything here that would alarm me other than I want to check the time utilization of a machine against the income earnings of a machine to see if there's anything going on there. In other words, if it's out 70% of the time, then it's reasonable to expect that I would have gotten 70% of the revenue opportunity. But if I discover it's been out 70% of the time and I've only got 50% of the money or the income opportunity, that may alert me that I've got some kind of heavily discounted rate going on, or maybe I had to make a concession to a customer that it was actually out and maybe they had problems with it and I had to write a big credit against it. But anyway, you need to dig into the weeds to figure out why did the timeout utilization not match up with the billing utilization.

rental manager

data analysis

fleet management

income report

time utilization report