TIME IS TODAY’S GREATEST CURRENCY Russell Down, chief executive at Speedy Hire, explores the modern trend of customers seeking prompt delivery, on their terms, and at their convenience – while assessing the importance of meeting this demand within the construction industry.
The Rental Economy
Don’t become the weakest link Living in a real-time era
The popularity of renting has permeated our whole society, from booking holidays through companies such as Airbnb, to the movement of infrastructure into the cloud. Buoyed by the move from a capital expenditure to an operating expenditureled funding model, we have truly entered a rental era. One of the other main benefits of renting, or ‘hiring’ – the term used in the construction industry – is, of course, speed. Projects increasingly require quick turnaround times to meet deadlines and impatient investor expectations. Companies hiring equipment depend on agreed timescales to be efficient, and when equipment and tools arrive, they have to be reliable, fully operational and safe. Significant levels of trust exist between the hiring company and supplier.
The introduction of technologies and methodologies such as building information modelling (BIM) and off-site construction, are gradually improving the industry’s track record. The transformation that these approaches bring, coupled with the ongoing drive to eliminate waste and delays, highlight the need for efficiency across the board. This pressure puts the spotlight firmly on the rest of the supply chain, to avoid becoming the weakest link. A late delivery at an early project stage can have a significant knock-on effect further downstream. Now more than ever, the availability of safe, fully operational equipment, and the speed of delivery and collection, has become a key requirement throughout the supply chain. This is especially critical when hiring equipment, as so many decisions are last minute, where the equipment is needed urgently. Delayed deliveries of equipment, or items that turn up damaged, can result in significant project delays and incur additional costs through highly-paid, skilled tradespeople being onsite ready and able to work, but unable to until the right tools and equipment arrive. Alternatively, if an excavator or other large plant arrives too early, there may be a lack of space onsite, subsequently causing an obstruction to the public and resulting in hefty fines on top of the unnecessary hire charges.
A cost only a few can carry In the construction industry, delays are generally regarded as inevitable. A recent poll by Cornerstone Projects shows that more than 85% of companies have experienced delays on recent construction projects, making a significant impact on company profitability. Missing deadlines can increase total costs by up to 20%. Surely, enough is enough? Whilst delays are commonplace, they are often not the fault of the construction company involved. Adverse weather conditions, such as those we saw from the ‘Beast from the East’, can wreak havoc and stop work for days. Sometimes, it is the architect or client wishing to make changes to the original design during the construction phase. However, whatever the reason for delay, the very fact that it is late is usually all that anyone remembers. This can unfairly damage the reputation of the construction company.
“As consumers, we’ve grown accustomed to being able to have our chosen item delivered on the same or next day, at the exact time of our choosing.”
As the construction industry adapts to tighter regulations, the demand for new housing and more efficient, eco-sensitive ways of working, suppliers need to up their game. It is not the first industry to be required to undertake such a transformation, but in contrast, it still has a number of traditional working processes. As consumers, we’ve grown accustomed to being able to have our chosen item delivered on the same or next day, at the exact time of our choosing. In fact, it has been well over two years since Amazon first offered its Prime members same-day delivery on one million items across certain areas of the UK. Our ‘want it now’ culture has translated from our personal and into our work lives too. Today, we are living in a real-time era, where urgent, accurate service is expected, as near to ‘real-time’ as possible. The Amazon model has set the bar high in terms of a perceived minimum requirement for customer service, an intuitive ordering system and fast, effective delivery at the promised time. Time is probably today’s greatest currency. Today, consumers won’t allow businesses to provide a wide delivery slot, rather demanding a window of an hour or less. This level of service is increasingly what construction companies are demanding from their hire equipment suppliers too. Approximate or delayed delivery times are no longer acceptable. Hire is, after all, driven by a specific, time-sensitive business need.
Getting up to speed The construction industry is under increasing pressure from all sides to become more efficient. From changing cultural perceptions born by the clickand-collect, want-it-now society, to eager investors wanting a return on their investments, the time is now to bring the whole surrounding ecosystem up to speed. Productivity, and its effect on project timelines, has always been an important issue for construction businesses. As margins tighten, there is less space for manoeuvre, and the need for near realtime service and reliability of equipment hire will become the cornerstone to good working practices in the future. Speedy Hire, speedyservices.com
26 | January 2019
Increasing Efficiency – Speedy Hire.indd 26