Editor’s note: In mid-February, Vermeer, Pella, Iowa, announced a $1 million internal investment to support the rental market. The company already has used lean manufacturing to eliminate waste and reduce cost in order to maintain or lower the price of some of the company’s equipment, including stump cutters, brush chippers, pedestrian trenchers, ride-on trenchers, mini skid-steers, piercing tools and vacuum excavators, which led to the new investment. To find out more about the Vermeer initiative, Rental Management recently spoke with Jason Zylstra, Vermeer’s marketing manager, who offered more details and outlined the company plan. An edited version of the conversation follows.
RM: Why did Vermeer feel there was a need for an internal rental initiative and why now?
Jason Zylstra: We listened to our rental outlet asset owners. We found our reputation was for quality and performance-based equipment often described as “contractor grade.” However, that came at a premium price. We took that to the drawing board. We didn’t want to compromise on quality or performance, but we were able to rely on Vermeer’s lean manufacturing culture and eliminate waste in the manufacturing process to reduce our cost. As a result, we were able to maintain or lower the price of some of our equipment. As for why now, we’re viewing this as a continuous journey. We’re at the beginning stages and at a point where the mechanisms are in place and we can talk about it.
RM: What does Vermeer see as the specific needs of the rental customer that are different from other customer segments?
Zylstra: Like contractors, we view rental outlets as asset owners that are pursuing a return on their investment. We strive to help them do that by offering the right solutions and backing it all up locally with their Vermeer dealer down the street.
RM: What types of products will this initiative include?
Zylstra: The full lineup of Vermeer equipment that is specially configured for the needs of rental outlets is included — stump cutters, brush chippers, pedestrian trenchers, ride-on trenchers, mini skid-steers, piercing tools and vacuum excavators. We are not seeing a big drive from rental for our specialty equipment lines, such as horizontal directional drills, but we are seeing a lot of rental outlets stocking large industrial vacuums as contractors are now looking to rely on rental outlets for a lot of that type of equipment.
RM: What do you mean by a $1 million initiative? Is this just a price cut or what?
Zylstra: The $1 million investment figure does not incorporate any price cuts. The price cuts on select models and maintaining prices on others is facilitated by cost efficiencies around manufacturing. This figure represents sustained presence in the rental market through further investment across engineering, testing, manufacturing and support — including people, processes and equipment. We are dedicating individuals here at Vermeer as well as the design and manufacturing emphasis we’re adding. This has influenced positive engagement at the dealership level, too. Our biggest asset to offer the industry is the scale of our dealer network and the local support they can provide.
RM: How does rental fit into Vermeer’s overall strategy?
Zylstra: This initiative does not represent a major shift in our business strategy or affect other key markets. Rental is identified as a key market and Vermeer’s leadership has increased resources to sustain our growth and presence for the long term. We see the needs of the rental market growing and evolving, so we are investing in that.