SmartEquip aims to revolutionise the aftermarket

US technology company SmartEquip wants to revolutionise the way that rental companies order their parts. They have made a good start in the US and now have their eyes set on Europe. Murray Pollok talks to SmartEquip CEO, Alex Schuessler.

Trying to sell another piece of software to rental companies can't be the easiest job in the world, especially when you first have to sell it to dozens of manufacturers. That has been the challenge for SmartEquip, the US-based company that since 2000 has been developing an online parts ordering and procurement system linking rental companies and their suppliers.

The aim of the system is to give rental companies a single web portal through which to identify and order parts (and other aftermarket items, such as manuals and safety bulletins) from all of their suppliers. Of course the key to success for SmartEquip is its ability to sign up these equipment suppliers, allowing them to digitise their parts lists, diagrams and manuals.

In this, they have been making some solid progress, with manufacturers including JLG, Wacker, Genie Industries, Sakae, Sullair, Multiquip, Deutz, PSI and Manitou North America all now onboard. This has been sufficient to persuade companies as significant as Sunbelt Rentals, United Rentals, Volvo Rents and 15 to 20 Cat dealers in the US to sign up.

If there is a US bias, then SmartEquip is now intent on making European manufacturers and rental companies its next members. "Two years ago it felt like it would take many years to get people [in Europe] interested", says Alex Schuessler, the Harvard-trained economist and one-time Cat Rental Store consultant who established SmartEquip in 2000, "but everybody has paid attention to what has happened in the US."

He says JLG's involvement in the system as well as the presence of Manitou have been two key factors in generating European interest; "But the third reason is that we're now rolling out the system at the largest Ashtead Group company, Sunbelt Rentals", says Mr Scheussler, "That's had a powerful impact in Europe."

Although SmartEquip first established a presence in Europe in 2005, it is in 2008 that it will start to establish a firmer foothold, with offices planned in France and the UK alongside a new European headquarters in Antwerp, Belgium, which it will share with US rental software firm Wynne Systems. "There is going to be a SmartEquip Europe", says Mr Scheussler.

Of course, for rental companies and big fleet owners, the key issues are what proportion of their fleet is covered by the SmartEquip system, and what savings they will make; "We're very very close to critical mass in Europe", says Mr Scheussler, with the recent addition of excavator manufacture Takeuchi helping give it a boost.

He says that its big rental customers in the US have found that they can save up US$7000-14000 per rental location, per month. Savings are generated in a number of ways, including a reduction in mis-ordering (by a claimed 90%) and an 80% cut in parts ordering time. More accurate parts ordering and the resulting increased efficiency in maintenance activities also have an impact on fleet utilisation, with SmartEquip claiming an upside of up to 3%.

Once the basic system is installed, says Mr Schuessler, there are add-on benefits, including smaller and smarter parts inventories; modules to cover warranties; preventive maintenance; and telematics, with the parts procurement system capable of being linked to machine hours and other diagnostic data to automatically trigger parts orders, inspections and so on.

United Rentals has invested in the system to the extent that it decided to use SmartEquip as its general e-procurement tool, not just to handle its aftermarket operations. "They started in parts, are moving out to equipment and contractors supplies, and pretty much everything", says Mr Schuessler.

"‘Corporate' has embraced it on an efficiency level" he says, "Companies are becoming much more sophisticated about operational efficiency".

The company is adding other strings to its bow. It has signed alliances with a number of other technology companies, including telematics specialists Qualcomm and Mastertrak and rental software providers Result Group and Wynne Systems. Also now available is a data and catalogue management system, as well as a ‘Vendor Portal' application that will give rental companies a single ‘aftermarket' portal to link with its suppliers, even if they are not part of the SmartEquip network.

The key element, though, is the aftermarket package, and getting more manufacturers on board, particularly in Europe. Mr Scheussler and his colleagues clearly have some more selling to do before they are finished.