Demolition by subscription...?

Late last week I received a new report from the Association of Equipment Manufacturers in the US; and very good it is too.??The report – entitled The Future of Building – was produced by some of the keenest minds from companies including Volvo Construction Equipment and Trimble.??And it set out to explore how the construction and demolition equipment sector might look in the very near future.??(You can get a copy of the report here)

Some of the content was predictable: the electrification of compact equipment; jobsite connectivity; autonomous equipment development; and a gradual reduction in the number of people on site

But there was one area in particular that really caught my eye.??And that area made mention of a practice that the report calls Equipment as a Service or EaaS for short.

According to the report, “construction companies will gain new, innovative ways to access equipment and equipment technology, thereby diversifying risk and reducing capital outlays”.

And if that definition went over your head, what the report is actually talking about here is plant and equipment by subscription.

Although this practice is portrayed as futuristic and new-fangled, it is already in use in other industry sectors.??Rolls Royce, for example, now supplies its aircraft engines on a “power by the hour” basis in which airline companies pay for the output of those engines together with things like repairs and preventative maintenance.??

According to the AEM report, the manufacturing industry has seen similar shifts where companies can lease equipment for a specified period.??Payment is based on the output of that equipment and any other services that go along with it.

The authors of the report believe that the same rules could apply in the field of demolition and construction.?

Under this subscription model, companies can gain access to the newest, most technologically-advanced equipment without having to buy it outright.

As I have mentioned, the concept itself ?is not particularly new.??It is not too far removed from the “cost per tonne” equipment supply deals put in place by Caterpillar for its mining customers.

But there’s a difference now.??And that difference, which is mentioned elsewhere in the AEM report, is technology.??We now have at our disposal machine monitoring systems that would seamlessly facilitate a switch to this “pay as you go” model.

Every aspect of a machine’s operation can now be analysed remotely, allowing the equipment manufacturer to monitor equipment use hours just as easily as mobile phone providers monitor your data consumption and call minutes.

And there’s one of the other advantages of this subscription model.??While the technology behind it might be highly advanced, pay as you go and subscriptions are all familiar territory.??

There are two key advantages to this demolition equipment by subscription model that I can see immediately.

The first is that demolition equipment – a high reach excavator, for example – is highly specialised.??And because it is so specialised, utilisation levels can be frustratingly low.

Although it is less the case now with the advent of modular boom systems, there was a time when high reach booms spent more time in a cradle in the demolition company yard than they did on site.??By switching to a pay as you go model, that would no longer be the case.??Companies could call off equipment for the duration of a specific project.

The second area where I could see this making a difference is another subject that we have touched upon before.

There was a time - in the not too distant past – when a young person starting out on their own could buy an old dog of a machine just to get them started. That machine would be a bit noisy, a bit smoky and a bit smelly but it would suffice while the young person was getting some valuable experience under their belt.

With the advent of emissions regulations and the introduction of low emission zones, the old machine route into the sector is no longer open.?

But what if that young upstart could access the very latest, clean running equipment by using a subscription model?

That has the potential to level the playing field enormously and – quite possibly - forever.

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Mark Anthony is the founder of DemolitionNews.com.