To rehire or buy: have you reached the tipping point – and how would you know?

27 September 2012

To rehire or buy: have you reached the tipping point – and how would you know?

Rehire, sub hire, cross hire, outsourcing, hiring in... whatever you call it, in our prospect visits we find few managing directors of rental companies know just how much kit they are rehiring. Some of them are even unaware that they rehire atall, when they clearly do!

There are many positive reasons for hiring in equipment to fulfil demanding or complex rental contracts. You can provide your professional expertise to your clients without the additional cost and effort of purchasing and maintaining the equipment, especially if it is highly specialised. You can offer the customer a 'one-stop shop’ and concentrate on looking after their needs all under your own brand. Rehire also eliminates the problem of having to maintain expensive stock to accommodate peaks and troughs in demand or to cater for every possible customer scenario.

However, constantly hiring in additional kit will undoubtedly become expensive overtime. You need to keep a close watch on your outgoings and identify when it would make better business sense to add the equipment to your in-house equipment.

Your rental software should enable you to analyse the equipment you rehire to identify where a particular product line is always in demand. Armed with this information, you can then consider if it is worth investing in extra equipment to make good the consistent shortfall, having taken into account the true cost of a rehire against income.

Within our MCS-rm rental management software, there are a number of ways to view your rehires. You can see your costs incurred against each rehire and also track your stock issues at peak times. Our business intelligence management reports offer good visibility of your rehire volumes, with drill-down detail of the individual rehired items.

If you decide it’s better use of your budget to buy in equipment, there may still be cases when you rehire and it’s vital to minimise the cost. Here again MCS-rm can help.

Clear visibility of your re-hires will enable you to return rehire kit promptly at the end of the rental period or should your own stock become available. This ensures that invoicing stops and you don’t incur any unnecessary expenditure. The MCS-rm ‘Today’ screen shows you all non-terminated rehires for which you are still being invoiced. You’ll instantly spot which can be terminated to avoid costly overruns.

In short, with MCS-rm hire software, you should have a better understanding of the total costs of asset ownership overtime to determine what your correct rehire ratios should be and have closer management of rehires.

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