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SPECIAL REPORT 28 tackling the cost of owning power tools August 2010 Over the last eighteen months, there has been a rapid decline in the UK construction industry due to the global economic climate. During these challenging times, a number of companies within the construction industry have realigned their businesses to the ever-changing market place. The majority of construction companies have had to tighten their belts and monitor spend, in particular their power tools spend. Cost of ownership Most construction companies today have large tool fleets, which are a significant expense throughout the year. It is important therefore, for customers to ensure that their tool fleets are procured in the most effective way to keep additional costs to a minimum. Purchasing a fleet of power tools is generally straightforward, as a company simply specs out the job and then the purchaser gets the best deal. Although that all depends on how the ‘best deal’ is defined. It is useful to consider whether a ‘best deal’ is defined in terms of price or whether it is defined in terms of the cost of ownership. Cost of ownership is expensive; research shows that the costs for tool ownership are increased with multiple factors, including the frequency of re-purchase, the amount of downtime and the direct costs of repair bills. An independent questionnaire conducted by LW Associates, revealed that power tool owners have to put up with long delays when having their tools repaired, with many waiting over 5 days for a tool to be fixed and returned. Overall, 75% of those surveyed said that it was common for a tool to take over 1 week for repairs, with 60% citing downtime as the biggest problem during the delay. It is useful to remember that different tools have different lifetimes. In reality, construction companies often believe that tools have short lifetimes so therefore decide to replace not repair, which consequently adds to increased costs for ownership. The companies assume that the tools will last an average of 1 year and that they will have to replace them when in actual fact tools can often be repaired. Independent research shows that 64% of battery tools and 61% of grinders are replaced when they break versus extending the life with a repair. For further information on the Hilti Fleet Management programme, please visit www.hilti.co.uk/hfm or contact Hilti Customer Services on 0800 886 100
hilti fleet Management programme One UK leading tool and equipment manufacturer, Hilti has reinvented its business model by understanding that its customer’s needs are not ownership of power tools but are in their use to get jobs completed faster and safer, with tools that offer them true value. Hilti consequently created their ‘Hilti Fleet Management’ programme, changing the perception of their power tools from products to services, as well as assisting customers in the current challenging market place. Hilti Fleet Management is a service programme that offers customers brand new tools for a small monthly usage fee. This is an ideal programme for those companies who may have little cash outlay in these tough times but still require the best tools to complete projects productively. One low monthly usage fee replaces the upfront cash outlay on tools and the fee covers all tool related costs, including tool usage repairs, servicing, calibrations, unlimited battery exchanges, personalised labelling, online tracking and theft coverage – for up to 5 years. There are no unscheduled, or surprise repair bills, so any unknowns are eliminated. Tools supplied as part of the Hilti Fleet Management programme are each personalised with customised customer labels, which can incorporate the customer’s logo if requested. These labels can be used to deter theft, assign accountability and increase transparency. The element of theft SPECIAL REPORT coverage within the scheme limits financial exposure in the event of a theft and provides a cost effective tool replacement. Hilti provide a good example of a company which has made fundamental changes to align its business model and practices to customers’ requirements in today’s challenging market. The Hilti Fleet Management programme is a highly innovative service that will assist companies with the co-ordination of tool repairs, budgeting their yearly tool costs, managing their businesses more effectively and ultimately reducing their overall tool spend, which is increasingly more important in the current challenging climate. This innovative service is a proven programme that can reduce overall tool spend by between 30% and 50%. August 2010 29
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