SMT Renting: A Trend for the Future?

Estimated reading time: 7 minutes

Ziehbrunner: We buy it, yes. Basically it's a normal process. We work very closely with suppliers and the distribution channels of the suppliers. So basically the customer defines what he needs, together with the supplier to activate the sales agent of the distributor, and if the configuration and everything fits for the customer then we basically buy this equipment according to their specifications and rent it out to the customer.

So we don't interfere with the existing sales channels and so on; we just complement that with the financing service. 

Shaughnessy: So if they already have existing machines, you make sure they all work well together.

Ziehbrunner: Exactly. Or if they have a preferred supplier, of course they want to get the next line with the same supplier. So then you'd just rent out the same machine from the same supplier to them. So it is really customer-dedicated.

Shaughnessy: Do you all set up the machines?

Ziehbrunner: This is all done by the standard distributors or the service organization of the suppliers. We offer purely the financial part. We're not offering any technical advice. So the customer and the supplier or its distributor is defining what they need. They provide the same procedure as if they would buy the machine. It's exactly the same. It's just in the bank. We are the owners of the machine and rent it out. But all the rest is the same, and we’re purely focused on this. 

Shaughnessy: How big is your company? 

Ziehbrunner: We're not that big, because we don't need so many people for doing this; it is a financial service, so we don't need a lot of people. We currently run about 40 contracts, with about 35 customers at the moment. We started about two years ago, and now we’re seeing, especially here at productronica, an overwhelming response. Big companies are showing up and are interested in renting in the future and not buying anymore. 

Shaughnessy: It almost seems like the bigger the company, the bigger the savings, in a way, especially when they have a relationship with you. If our machine is four or five years old, it’s time to rotate it out, basically.

Ziehbrunner: Exactly what you are saying. It enables the customers to rotate the machines quicker without having to invest, while keeping the level of the technology high. Especially for companies where they need to be at the edge of the technology, then it's a very good model, because they can always change and adapt towards changing the machines. So they are always producing on the latest equipment. 

Shaughnessy: When you first started, did you have any hurdles? What have you learned over the years?

Ziehbrunner:I think that one of the biggest hurdles was being the first mover. The idea was just not known in the industry. You know it from the car industry, but not for the machines. This was the biggest hurdle in the beginning, to basically teach the customers what we do. Now we have overcome this hurdle. Initially we focused on the small customers because we thought maybe they would be the first lead. We quickly learned that the small customers are still more old fashioned, where they save and then buy the equipment. Mid-sized and bigger companies know the financial models behind this, and they know how in the end it can generate more profit out of such a model. So the idea of having small customers first and building them up has changed, and it's really the mid-sized, big customers which we serve today. 

Shaughnessy: You all are almost kind of a bank unto yourself. You must have to do background checks on the companies, due diligence. You are basically giving them a loan.

Ziehbrunner: Yes. We do this with a third party, so we are not doing this ourselves. We check so that we really are sure that the company we're renting out is healthy. It's not meant for some who cannot afford machines and so on.

Shaughnessy: So you have somebody who audits and qualifies each company. 

Ziehbrunner: Yes.

Shaughnessy: Well, it sounds like a great idea. Best of luck, and thanks for speaking with me.

Ziehbrunner: Thank you, Andy.

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