Rent? – Outsourcing equipment, to focus on the core business.
Buying versus renting machinery is an issue that often arises amongst mining and construction companies, as working to meet tight deadlines means that project managers are constantly seeking ways to increase productivity.
Buy? – Owning equipment, the company has assets.
Although the decision to rent or buy normally comes down to the company’s financial requirements, there may be many other considerations that should be assessed before making this decision.
It has been found that outsourcing equipment is beneficial as it allows companies to focus on their core business. Whether companies are looking at renting short-term or long-term, it is important to note that outsourcing machinery is the most cost effective way, as there is no major capital outlay required and companies may not have to waste time applying for finance.
Other benefits include that the hiring company does maintenance. So if any breakdowns arise they attend to these. Alternatively, buying machinery has appeal, as it is a once-off expense and could be considered a long-term investment.
Owning the equipment also means that it now forms part of the company’s assets and the company would carry the depreciation costs. There are, however, many challenges involved when procuring an asset that requires continuous maintenance and high upkeep costs.
Henry Fourie, business development manager for Industrial Plant Rental at Rand-Air, a compressor and generator company, advocates that renting offers greater benefits in the end.
“Not only are customers guaranteed quality machines when renting from a reputable company, but they also have peace of mind knowing that they are paying a fully inclusive rental price, which includes all the maintenance, parts, labour and traveling costs of the technician.
“…renting equipment from a company that does regular machine inspection and maintenance is important as this minimises the chances of breakdown, thus increasing productivity…”
In addition to this, the rental option offers back-up machines in case of a breakdown to ensure that productivity isn’t affected while the machine is being repaired. The rental option also offers an easy upgrade or downgrade path without additional capital outlay when compared to an outright purchase.”
Another significant factor to consider is hiring machinery from a company that offers 24-hour service. Industrial Plant Rental account manager at Rand-Air, Mpho Modjadji Ngamlane, advises that “renting equipment from a company that does regular machine inspection and maintenance is important as this minimises the chances of breakdown, thus increasing productivity”
“Time is crucial, and therefore it is essential to ensure that you are hiring from a company that makes it their business to understand your needs by offering the best advice and equipment”
An important consideration when outsourcing rental needs is that the hiring of machinery is done through a company that has experience in the rental industry.
“Rand-Air believes that exceeding customer expectation is a significant aspect in the service level agreement. Time is crucial, and therefore it is essential to ensure that you are hiring from a company that makes it their business to understand your needs by offering the best advice and equipment,” Fourie concludes.