Executive Hire News › Archives › January/February 2009 › Exhibitor Profile : Hilti’s “no brainer”
Exhibitor Profile: Hilti’s “no brainer”
At last year's Executive Hire Show, Hilti (Gt. Britain) Ltd introduced its new Fleet Management plan. One year on, we speak to four independent hirers about the scheme.
A year ago, judging by all the comments flying about, Hilti (Gt. Britain) Ltd seemed to be risking the reputation that it had built up over the previous 50 years. Having just launched its new business strategy, Hilti appeared to be telling hirers what they could and couldn’t do as it announced that it would no longer sell indirectly through dealers and other third party distributors. This certainly upset many hirers that had previously bought Hilti tools and accessories for re-sale and the manufacturer seemed to have put itself on a collision course with hire.
Its sales team had spent the second half of 2007 persuading hirers to sign a Selective Distribution System (SDS) contract under which each hirer can trade with Hilti by agreeing to buy products only for use in its own hire fleet and not to re-sell any tool or consumable that remains in the structure after its completion. From the start of last year, Hilti only dealt with hirers that signed this contract.
Recognising the potential damage that its action would cause, Hilti added a number of sweeteners to the bitter pill that it was asking hirers to swallow. The most important ingredient in the mix was the Fleet Management Usage plan, which extended the manufacturer’s original Two Year No Cost initiative, introduced in 2006. Under the Fleet Management Usage plan, hirers pay a monthly usage fee for its tools, with Hilti retaining ownership of the machines. Equipment is rotated on a regular basis, based on the economic life of the machine. Typically, for tools like the TE76-ATC combi-hammer and medium and heavy-duty breakers, the period is 48 months, although it can extend up to five years for diamond drilling equipment. At the end of the contract, Hilti would replace the kit with its latest models and the plan would start again.
Takes problems away
One year on, and in very different trading conditions to which the Fleet Management Usage plan was introduced, we spoke to a number of independent hirers to find out their views on Hilti’s strategy. For Phil Mason, MD of Hire One, which operates six outlets in south Wales, his company’s decision to support the plan was “a no-brainer. The Fleet Management Usage plan takes a lot of the problems away because you know, at the outset, what the costs will be throughout the entire 48 month period.
“Under the repair system, Hilti tells us immediately when any item needs servicing, collects it from any of our locations and returns it within 48 hours. We already operate a lot of Hilti equipment in our power tool fleet, predominantly TE 76-ATC and TE 905-AVR breakers, although we also offer other brands. However, in the coming months as a machine needs replacing, we will use the Hilti Fleet Management plan for all new items.”
Signed up at the Show
David Hare of Hares Hire Services Ltd in Upminster, Essex is similarly impressed. “It is ideal as it allows us to increase our fleet size and frees capital for other products. We signed up to the deal at the Executive Hire Show last year. We had experienced a demand for Hilti breakers from our customers and this plan has enabled us to meet this demand. We have since added a significant number of new machines without having to phase it into our cash flow projections. Purchases include a number of breakers, DD120 diamond drill rig, DC-SE wall chaser and dust extraction unit. The most recent purchase was the new DCH 300 electric disc cutter.
“Whilst we operate other brands of breakers, we will increase our fleet in the future with mainly Hilti, but will always maintain stocks of other brands. This increase will not all be through the Fleet Management plan, as we will purchase some machines outright. The 48-hour service turnaround is also an important benefit and this also applies to equipment that we own. There is also an option for Hilti to supply labels with our plant numbers and telephone number on each item. Overall, the quality of the equipment and service is excellent from a company, which is also a leader in HAV information.”
Shaun Armstrong, Director of Holbury Tool Hire Ltd, just outside Southampton on the edge of the New Forest, is another fan of the Fleet Management plan. Rather than adopt the Usage plan, Holbury buys – and therefore, owns – the equipment, under the so-called Lifetime Service Plus plan. This, basically, provides extended warranty throughout the four-year period.
“The first advantage to us is that Hilti’s range of drilling and breaking machines are good quality products. We also like the extended warranty period of up to four years and the speed with which Hilti undertakes repairs. We simply call its Customer Services Centre, a carrier collects the tool and it is repaired and returned to us within 48 hours. If you do carry out your own Hilti repairs, you will need a tremendous amount of specialist tools, so this plan effectively saves us twice. We started buying under the Fleet Management plan last August and the first tool we bought is still out on its first hire. We operate a fleet of about 40 breakers and rotary hammers, which comprises Hilti TE 905-AVR machines, plus TE 60-ATC and TE 80-ATC units, as well as other brands. Since then, all the new machines we have bought in these product categories have been Hilti tools. Low vibration has also become a key factor, as customers are increasingly demanding reduced vibration tools and keeping them on hire longer.
“We are also looking to use the scheme to replace drilling rigs to our fleet. The plan is too good to miss. The decision was a no-brainer, although, as we do a lot of work with fixings trades, we are not happy that Hilti no longer allows us to buy tools and accessories for re-sale. However, this annoyance is out-weighed by the advantages of the Fleet Management plan.”
Kougar Tool Hire Ltd has been established for 20 years and operates in Wandsworth, south London and Isleworth, west London. Paul Liffen, General Manager at Wandsworth, was unconcerned by Hilti’s re-sale restrictions “because, under the terms of the SDS contract, we are still able to sell DX nails and cartridges. Regarding the tools, we are more than pleased with the extended four-year warranty under the Lifetime Service Plus plan. We operate dozens of breakers, like the TE 106 and TE 905-AVR, and the extra cost of about £150/machine is worthwhile. It also really does happen that tools are repaired and returned within 48 hours.”
From this selection of independent hirers, the evidence is conclusive. Rather than become an outcast, Hilti has retained – and even strengthened - its position as a truly integrated supplier to our industry. Whilst most national hirers are still not prepared to support the Fleet Management plan, independent hirers, at a time of such economic uncertainty, are taking full advantage of the opportunity that Fleet Management offers to expand, or modernise, their power tool fleets. Indeed, they appear to be increasingly standardising on Hilti products in their fleet. The response of other power tool manufacturers to this now successful strategy will be of great interest in the year ahead. •
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