Three months into a large data center construction project in Virginia, a national electrical contractor found itself well over its tool budget. It had based its rental fleet on the number of tools it would need at the peak of the job, as many contractors do, instead of plotting its needs against the craft bell curve. It wanted the extra tools on hand “just in case.” This strategy left a sizeable percentage of tools sitting idle.
United Rentals leveraged detailed utilization data collected through its managed tool trailer solution to convince the company to right-size its tool fleet using a lean model and get its spending back on track.
For the project, United Rentals provided a 53-foot managed tool trailer and stocked it with 266 types of tools. It also placed ProBoxes (gang boxes) in strategic locations around the site, each containing tools the crew in that area required, such as cable pullers. The ProBoxes improved jobsite efficiency by saving craft workers trips to the tool trailer.
Right-sized tool inventory
United Rentals reviewed the tool utilization metrics line by line with the customer, pointing out excess inventory. For example, the contractor had 48 cordless bandsaws on rent but was consistently using only 38.
The lean model based on actual labor demands resulted in a savings of 43% in total tool billing compared with what the customer would have spent if it had purchased the tools as it originally planned, and a savings of 28%, or $64,500, compared with the original rental tools budget.
We decreased their tool spend, decreased their cost per man hour, kept them ahead of the planned schedule and provided 100% transparency. We helped them make money where they would have otherwise lost money.
United Rentals helped the customer feel comfortable with the reduction in tool inventory. “Our local branch was a five-minute drive from the jobsite,” said Candice De Melo, United Rentals regional project development manager. “We told the customer that no matter what, we would support them with additional tools whenever they were needed.”
Reduced tool loss
United Rentals affixed all the tools with unique identifier barcodes. Supervisors were given keys to the ProBoxes in their area, and they assigned specific tools to each worker.
“Workers would lock up their tools in the ProBox each night. Then every Friday night, the United Rentals tool trailer coordinator would inventory the boxes and swap out any tools that needed repair. The coordinator also noted if any tools were missing,” said De Melo.
When workers arrived back at the site on Monday, all the tools were in good working order. If any tools were missing, crews were responsible for finding and returning them.
This system significantly reduced tool theft and loss. Because of the barcodes, workers couldn’t replace tools assigned to them with tools taken from somewhere else on the site. When a worker was dismissed from the jobsite, the system made it possible to identify the inventory assigned to that worker to proactively retrieve the tools.
“On jobs with managed tool trailers, we average around a 5% total loss, which is significantly below industry average,” said De Melo. “On this job, the tool loss was well under 5%.”
Expense data for random investor audit
Meticulous expense data compiled by United Rentals did more than save the contractor money; it also helped it pass an audit from the data center investor.
The contractor was able to prove, for example, that it had used the required NECA rates and factored cost per man hour into its invoicing. Providing this level of data insight differentiates United Rentals from its competitors.
“If we had not had the backup data, it would have created a very large headache for them,” said De Melo.
Flexible cost structuring for bids
Thanks in part to the overall success of the project, the contractor has been able to win more business in data center construction. If a future project calls for a different pricing approach, United Rentals will gladly comply.
“We can pivot our bids to accommodate the customers’ needs. On this data center bid, for example, they couldn’t show labor costs. If they need to stick within a specific cost per man hour on a particular bid, we can do that,” said De Melo.
With the reduced spending on tools, the contractor was able to come in on budget.
“We decreased their tool spend, decreased their cost per man hour, kept them ahead of the planned schedule and provided 100% transparency. We helped them make money where they would have otherwise lost money,” said De Melo.
The contractor’s data center superintendent was so pleased with the results that he insisted on having a United Rentals managed tool trailer on all of his subsequent projects.