The dilemma of buying versus renting machinery is a question 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. The decision to rent or buy normally comes down to the company’s financial requirements, however 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 the fact that maintenance is done by the hiring company, and if any breakdowns arise these would be quickly attended to.
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 the equipment now forms part of the company’s assets and the company would carry the depreciation costs. There are many challenges involved when procuring an asset that requires continuous maintenance and high upkeep costs.
Henry Fourie the Business Development Manager for Industrial Plant Rental at Rand-Air, a compressor and generator company, advocates that renting offers greater benefits in the long run. “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 comprises of all the maintenance, parts, labour and travelling costs of the technician. 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 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 “renting equipment from a company that does regular machine inspection and maintenance is important as this minimises the chances of breakdown, thus increasing productivity.”
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.