World Power

Nov. 1, 2004
RER: Please explain how Caterpillar's power generation rental program functions. Shepard: Cat Rental Power and the worldwide Caterpillar dealer network

The power generation rental market is a fast-growing rental market throughout the world. RER recently spoke with Jim Shepard, manager Cat Rental Power, and Phil Wessels, rental and used sales manager, Ring Power Systems, about the Caterpillar rental power program.

RER: Please explain how Caterpillar's power generation rental program functions.

Shepard: Cat Rental Power and the worldwide Caterpillar dealer network have a combined mission: provide customer-focused energy rental solutions. We understand that customers' energy needs vary based on their particular business requirements and we have to model our services to meet those varying needs. We focus on the specific demands of the customer and engineer our solutions to provide maximum value. Based on that understanding, Caterpillar, our business partners, such as Solar Turbines, Sullair and others, and Cat dealers offer consultative services, rapid response, and a wide breadth of product — focusing on power generation, temperature control and compressed air. If a customer has additional needs, we can access products and services through Cat Rental Store operations. These capabilities allow us to service diverse industries such as utilities, manufacturing, industrial, construction and entertainment.

How large are Caterpillar generators and which size generators are targeted to which market?

Shepard: Caterpillar generator sets range in size from 15kW to 2,000kW, as well as natural gas-fired turbines at 5.2MW. Although utility projects tend to require the larger equipment, Caterpillar doesn't target specific sizes of equipment to a market. Again, the focus is on the customers' needs because even a large utility will rent a 100kW generator (or smaller) to satisfy a job specification.

Bear in mind that network-wide Cat Rental Power also has an exceptionally large fleet of temperature control equipment. This includes mobile air conditioners ranging in size from 1 to 90 tons as well as chillers from 30 to 1,000 tons. These can be used in many applications, from comfort cooling to process cooling. In addition, Cat Rental Power has also made a significant investment as a network in compressed air equipment, both oil-free up to 1,500 cfm and oil-flooded up to 1,600 cfm.

How do Caterpillar power generation specialists operate? Do they work in conjunction with Cat Rental staff, or with dealership staff?

Shepard: The relationship between Cat Rental Power and the dealer network is a unique one. The dealer network is made up of more than 50 independently owned dealerships in North America, of which many have multiple locations. As the manufacturer, Caterpillar has an obligation to respond to the dealer network with the right equipment to meet the needs of rental customers. The dealers, in turn, respond to their market demands by combining Caterpillar products and other energy rental products along with value-added services (i.e. solution engineering and process improvement consultation) to provide a single source for customer rental needs.

What kind of training and support does Caterpillar on the corporate level offer to the Caterpillar dealerships?

Shepard: In the past, Caterpillar has offered training and support primarily focused on product. However, as business has developed, there has been an increasing amount of training and support on the soft skills. The team focuses on the application, engineering a solution, and providing value to the customer. In addition to the support provided by Caterpillar, dealers have their own home grown experts, and extensive training departments. The team is further strengthened by the information shared from dealer to dealer.

What is unique about Cat Rental Power's services?

Shepard: Cat Rental Power is unique in its ability to combine the strength of local ownership backed by factory support. This gives Cat Rental Power the ability to provide a mixture of products and services on a global level through its partnership with the Cat dealer network.

Can you sum up what is involved in specifying and preparing rental projects?

Wessels: Different markets have varying needs when seeking a reliable source of rental power. Products and services must be bundled differently to meet individual customer needs. There are standard checklists available to ensure all the bases are covered. It is also important to have a mixture of good listening and questioning skills, supported by knowledge of the product, application and industry. This is often an example of “I think I know what I need, but what do I really need?”

Is the power-generation market a mature or emerging market?

Shepard: While certain geographic markets are mature in their development, other markets are just beginning to address their need for reliable on-demand power. Hit with rapidly growing industry and population increases, these markets represent a significant growth opportunity as they implement rental power solutions as a temporary fix until permanent facilities can be built to handle the demand.

Do you put together emergency response contracts with customers?

Wessels: Yes, in fact our dealers have an emergency response network in place to support a local dealer and its customers when needed. The local dealer will meet and discuss contingency planning for the temporary needs a customer may require during an unplanned outage. That could be due to weather, flooding, forest fires, or another form of natural or man-made disaster. Plans are tailored around the customer's specific need. Manufacturing, food processing or storage, temporary shelters, and hundreds more businesses or governmental agencies are targeted as candidates for this service.

Caterpillar and the dealer network are engaged with various local, state and federal agencies such as Federal Emergency Management Agency and Homeland Security. They participate in various conferences to keep abreast of changes and to learn how they can improve this service. Due to our prior planning, for example, we were successful in meeting the many needs of the recent hurricane season.

It seems that most players in the power-generation market package power rentals with oil-free air compressors and temperature-control equipment. Is that Caterpillar's approach as well?

Wessels: The Cat dealer network offers complete power generation, temperature control, oil-free and instrument-quality air products and services.

How big is Caterpillar's power generation division, how can you quantify its size? Do you offer power generation services around the world?

Shepard: The Cat Rental Power network and dealers service a global base of customers with 210 dealers and more than 3,000 locations worldwide.