What you do at DMG MORI?
I am the sales manager for DMG MORI Capital Rental Program. I oversee the sales of the rental contracts for the program here nationwide.
Tell us about the rental program.
The program is a pool of seven different models of machines — lathes, horizontals, vertical, and 5-axis — which is a sampling of some of our most popular models available to rent on a monthly basis. That allows our company, as a premier builder, to give our customers some flexibility and an opportunity to get our product on their floor making parts that they wouldn’t have had otherwise.
What are the program’s advantages for manufacturers?
They have the ability to get one of our machines at an obviously lower outlay of capital. The only barrier to getting one of our machines is simply the first month’s payment, signing a contract, and proof that your building is insured. It’s appealing for short-run jobs where somebody might not want to lay out a great amount of cash for a machine. They can simply rent it for a year or up to six.
We’re so flexible that we even have an aspect where they could rent by the hour. “Power by the Hour” is the program. As they use the machine, they’d be renting it rather than the machine sitting there perhaps for two weeks. They’re not paying for idle time. It’s just a more accurate way of billing them for the use of the machine, and there’s a myriad of advantages to that. There’s a minimum use on it, but the general aspect is, once they achieve the minimum usage monthly, they’re not paying for a machine that it isn’t making them money.
Usually, there’s a lot involved with leasing or financing a purchase or just simply buying a machine. With our program, again, there are simply three steps: We do a credit check; there has to be a guarantee of payment by the company, and they have to provide proof that their building is insured. Those three things are the only barrier to entry into this program. The two main types of users of our program have been companies that may be having a problem with cash flow or companies that have just started up. A company that a traditional finance institution would say no to, we say yes to.
What models of machines are available?
The models offered include the CMX 1100 V, DMU 50, NHX 4000, NHX 5000, NHX 5500, NHX 6300, and the LX 2500 SY.
Do you see more manufacturers opting to rent equipment instead of buying or outsourcing their manufacturing needs?
Yes. We launched the program officially in March, which was kind of an auspicious undertaking, considering COVID. We rented the majority of the machines in the pool through the course of this year. I think that was a combination of companies needing machines that they certainly didn’t think they were going to need due to COVID. The pandemic affected manufacturing, so some companies got sent off their traditional sources of work and said they needed a 5-axis machine for the first time, so they rented it instead of buying it.
I should add that when the rental is over, the advantage is, we take care of everything. They aren’t responsible for maintenance. We do a bi-annual check. The machine is covered by an insurance policy. And when they’re done, we come back and pack it up and ship it back to our facility. They don’t have to repair it to sell it, find a buyer, and move it. We eliminate the headache.
Could this program be used by companies to see if a piece of equipment is a good fit before they actually buy?
Certainly. In fact, there’s a rather large Midwest manufacturing company that is doing that, just to see if our 5-axis machines would be something they need — proving the ability to do the part to win the contract.
Is this a unique program or is it something that you’ve emulated?
It’s the only rental program by a builder in the country.
What’s been the market response? Has the pandemic actually boosted the program, or has it been a deterrent to it?
It’s boosted it. The response for the program, as far as inquiries, has been people are very curious about it. We’ve rented most of the machines in our set pool, which is wonderful.
But we see the program growing year to year. This isn’t something that’s going to be a short-lived program.
I think the big advantage, outside of the financial flexibility, is that the customer is responsible for nothing. We install it; we set the machine up, and we train the customer on the machine. Then, we maintain the machine, keep it within specs, and then take it all away, and they don’t have to resell it. They don’t have to worry about finding more work for it. They can extend the lease after the rent. We can change the contract as we go.
We’re a top high-end machine builder in the world. This is an opportunity for a small startup to get a DMG MORI Machine Tool on their floor making parts when they may not have known it was even possible prior to this program.
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