The European Rental Association (ERA) has introduced a free online calculator designed to help users better assess the actual cost of equipment.
The ERA said the Total Cost of Ownership (TCO) Calculator, which was created in collaboration with the Solvay Brussels School of Economics and Management, was the first of its kind.
It said research conducted during the tool’s development exposed an industry-wide requirement for greater transparency, particularly as many businesses experience increased scrutiny over budgets in the wake of the financial crisis.
Interviews conducted with senior executives in organisations across Europe, which depend upon vital equipment to deliver their products, revealed an increased pressure to drive non-core assets out of balance sheets.
Their data and experiences have been used anonymously to help shape the model for the TCO Calculator, which was designed to make all direct and non-direct costs clearly visible and available publically on a simplified and user-friendly interface.
The TCO Calculator is available at: http://equipmentcalculator.org/
As an option, the ERA said the calculator also offered a completely unbiased view of buy versus rental analysis; to help equipment stakeholders draw comparisons and make informed decisions.
Available online, as well as on Android and Apple App versions, the ERA stressed that all data generated by using the TCO Calculator would be owned and stored by the user.
The ERA said it did not store such data, and had no access to such data – it said the calculator had been created purely as an industry aid to drive great operational and environmental efficiencies.
ERA secretary general Michel Petitjean said, “Working with a team at the Solvay Brussels School of Economics and Management, we set out to reach a comprehensive and objective analysis of the total cost of equipment ownership.
This ground-breaking tool is powered by one of the most sophisticated calculation models and can be applied to most compact and heavy equipment. It’s a great step in the right direction for our industry.”
After completing a simple registration process, users can create a total cost of ownership calculation for the following types of machine:
- Wheel loader > 15 tonnes
- Track loader > 15 tonnes
- Wheel excavator > 15 tonnes
- Crawler excavator > 15 tonnes
- General construction equipment machine < 15 tonnes
Once the machinery type has been selected, the user can add ‘suggested’ and ‘added’ values into fields under the categories of ‘Investment Related Inputs’, ‘Operations Related Inputs’ and ‘Divestment Related Inputs’ to calculate an annual, monthly and daily total cost of ownership.
As an option, a comparative rental cost can then be viewed by inputting data into rental inputs fields.