Right to rent

The decline in UK processing activity last September contributed to the European factory sector’s worst quarter since 2009, fuelling fears of a triple dip recession. Rising costs of chemicals, energy and materials such as metals, oil and plastics are continuing to impact on falling outputs, resulting in many companies downsizing.

This isn’t always the right solution. For companies operating in increasingly challenging conditions there are a number of viable methods for overhauling operations that will save costs. Energy efficiency is at the heart of this. As a primary financial outlay for any processing company, this remains a key area that can be overlooked. But how can a business ensure that the energy it is consuming is used as efficiently as possible?

The first thing that needs to be assessed is the age and condition of the equipment that is being used. Upgrading equipment in more prosperous times would of course ensure manufacturing remains efficient. But during difficult economic times, working capital needs to be better utilised to ensure it is not tied up in large purchases of items such as power or industrial cooling equipment.

Market uncertainty can often result in newly purchased equipment being either under or over-utilised as manufacturing demands fluctuate.  Equipment rental can offer both short and long term solutions to manufacturers wanting to strengthen their infrastructure with minimum expenditure.

In addition, forecasting the energy market and how both gas and electricity prices will fluctuate over the coming years may be difficult for companies in difficult times. By implementing a bespoke rental solution tailored for a specific project, energy consumption will remain at a minimum. The financial outlay for equipment rental can also be offset by savings in overall power consumption, wastage and maintenance.

Significantly, even where investment in new machinery is a viable option, the addition of rental equipment during seasonal periods can deliver even further efficiencies. Developing an understanding of peak periods in production will enable purchasing managers to procure the most appropriately sized machinery. For example, where chilling is concerned, capacity will need to be substantially greater in hot summer months than it will in winter.

Companies could acquire a smaller, less expensive cooling solution that is able to run effectively at lower ambient temperatures during colder periods for the majority of the year. Capacity can then be supplemented as and when required with the short term rental of additional chillers when it gets warmer.

For the foreseeable future however, while the economic mood remains cautious, it seems inevitable there will be some fundamental changes to the way that manufacturers handle their asset management in order to maintain cost efficiencies.

With many projects being placed on hold, one of the greatest advantages of rental solutions is the cushioning effect they can have on companies uncertain about the future. Reviewing these kinds of smart efficiency measures now could see more businesses reap long-term rewards.