Fleet Management Comes into Focus

Following the rapid development of fleet management solutions and a flurry of adoption, the lessons learned are informing a new vision of how best to optimize a fleet.

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Of all the investments a company could make to modernize warehouse operations, fleet management is the most unique. Unlike automation, infrastructure or software, lift truck usage has a huge behavioral component that makes measuring and defining success more difficult. Few other elements of materials handling equipment are mobile anywhere between eight and 24 hours a day, and few interact so frequently with as many stakeholders inside and outside the organization—from operators to managers to service providers.

When the futuristic concept of “fleet management” emerged a few years ago, it promised to leverage the Internet of Things, real-time data, and other buzzwords to bring all the pieces together to cut costs, streamline operations, improve safety and more. The sky was the limit, and the humble warehouse workhorse would finally get the treatment it deserved as such a fundamental component to productivity and profitability.

“We’re done with the hype,” says John Rosenberger, product manager for iWarehouse Gateway and global telematics for The Raymond Corp. “Everyone now accepts that there’s an advantage to fleet management, but it’s like a gym membership. If you don’t go, what value are you getting out of it?”

Like a gym, the umbrella of fleet management includes a lot of options, and few people need them all. Sure, January 1 could be the first day of your quest to become an Olympian, but it’s best to set more modest goals. The industry has spent the last few years learning this lesson—often the hard way—and the approach to forklift telematics and fleet optimization programs has adapted accordingly.

“OEMs and third parties that provide fleet management have all rushed to be able to offer everything,” says Greg Simmons, business development manager for Mitsubishi Caterpillar Forklift America’s national account fleet services team. “As we get a couple years into it and customers have tried some things, they’ve taken a half step back to return to the fundamentals. One size does not fit all, so we see a trend to apply small pieces of the fleet management solution set to one area that helps move the needle for one customer. That’s what matters most.”

Finding the needle in the payback
By some estimates, less than 30% of lift trucks are equipped with telematics, according to Steven LaFevers, director of aftermarket solutions for Yale Materials Handling Corp. The rest haven’t bought into fleet management solutions because they haven’t found one with the right balance between cost and immediate concerns.

Instead of a large initial investment in a base telematics solution followed by the added modules and functionality, LaFevers predicts more focused solutions that handle only battery management, or just operator checklists, or just technologies that target operator behavior. Although they might strike the balance of price and impact, all of these elements will require the same consistency of discipline as any fleet management solution.

“When someone purchases telematics, they have something wrong they want to fix,” says LaFevers, “but when the low-hanging fruit is picked and they’re happy to be better than the average user, there can be a tendency to settle.”

The difficult but rewarding next step is to roll all of the fleet data up into decisions about buying, replacing and repairing equipment. Telematics devices offer a lot of “aha!” moments, LaFevers says, and idle time is one of the first. “What’s more valuable? Cutting maintenance costs by 1% or increasing productivity by 1%? Maintenance doesn’t even come close.”

LaFevers defines idle time as total time the key is turned on, but the unit is not moving and the hydraulics are not engaged. The average new telematics customer, according to LaFevers, starts at above 45% idle time, classifies 33% as good and 25% as world class. Once a company understands idle time, they are then able to apply utilization matrixes to ask whether you really need a piece of equipment or if you need to purchase more.

When it comes time to add equipment, Lee Ignac, director of fleet management for Hyster Co., says smaller customers are looking for consistent pricing across the enterprise.

“A customer with 60 or 70 locations and 120 trucks has one here, five there, and none of those volumes are enough to drive any bargaining power,” Ignac says. “Telematics and a fleet program can unify that equipment and level the playing field to ensure that they get the same deals in one location as another.”

A customer without fleet management up to this point can expect to reduce the overall cost of fleet ownership by 15% within a year, Ignac says, especially once they retire aging equipment and rotate within the operation to balance usage. With a fleet right-sized, it’s time to maintain it properly, and at proper intervals.

“It amazes me how out of touch some customers can be with maintenance records,” says Kevin Fick, director of aftermarket for UniCarriers Americas. “Once we address those things, we can start talking about managing operator productivity with tools like operator access, automated checklists and even Breathalyzers.”

Identifying operator activities—how much time they spend lifting, moving and working—is relatively straightforward, Fick says. However, it is essential to use the data to establish and consistently reinforce ideal behaviors.

“To sustain the value of the data, you have to keep coaching,” says Fick. “Sensors will keep providing data, but if you don’t ask questions of operators and your operations, you won’t see any value. Should a given worker be doing this work? Maybe it’s a process error, maybe a safety issue or maybe an operator doesn’t know how to use the hydraulics very well.”

Rosenberger says that some telematics deployments have come across as threatening to the operator, drawing comparisons to Big Brother. But, more progressive companies take an “employee-centric view” and make the data more visible for the operator—instead of invisible.

“One customer showed how data collected by vehicles and equipment improved profitability, which in turn allowed salaries and benefits to be competitive. Their operators don’t fear for their jobs, they’re part of the team. The companies that are punitive, on the other hand, are feeling the pain,” Rosenberger says.

Communication is key
At the root of operator acceptance and behavior is communication, which is too often lacking among fleet management stakeholders. Jewell Brown, national manager of fleet management and telematics for Toyota Material Handling U.S.A., says it’s among the biggest obstacles for many customers.

“These systems don’t work by themselves,” Brown says. “There is no plug-and-play solution that will miraculously do something. Fleet management requires communication and collaboration, from the OEM to the service provider to the customer to the individual operator. That’s the only way it becomes practice and doesn’t fizzle out in a year.”

Traditionally, what fleet management practices were in place were decentralized, with various stakeholders tackling their slice of the whole, often in silos with competing interests. Brown says the three-way communication between OEM, service provider and customer will increasingly become a partnership geared toward achieving and maintaining four main pillars: awareness, accountability, optimization and uptime. 

“As we all become more involved, we’re building a team of fleet solutions experts able to consider all of the fleet technology in the facility,” Brown says. “Customers can partner with OEMs to determine which forklifts to use given business growth plans, other materials handling equipment needs, even opportunities for automatic guided vehicles. This goes back to effective communications, because decentralized job functions that overlap and don’t talk to one another will cost you money in the long term.”

Bigger data, bigger benefits
As individual stakeholders come together around fleet management, so, too, will fleet systems become more connected to other business processes. Jim Gaskell, director of global technology business development at Crown Equipment, says warehouse systems are already converging.

“Every piece of information in the warehouse needs to communicate with every other piece,” says Gaskell. “We see fleet data interfacing more with warehouse management systems (WMS), task management, and all data points in between. The customer can then remold themselves to take advantage of those conversations, but these kinds of business shifts take time.”

Consider the impact of daily or seasonal peaks on a fleet of 10 lift trucks, for example. Are all 10 only used for one hour in a given day? Is there a process adjustment that can level that utilization, perhaps by separating orders so that some are handled in the morning and some in the afternoon? Customers are starting to realize that they can use data not just to drive process improvement, but also to establish checks and balances.

Rosenberger offers the example of a customer whose manager elected to have three operators with overlapping shifts to avoid downtime. When the customer augmented data from the labor management system (LMS) with fleet data, they found that operators, having met their quotas, slowed down 30 minutes before the end of the overlapping shift, and the incoming workers didn’t get up to speed until 30 minutes after they started.

“When they aggregated telematics and LMS, they saw they were losing an hour of productivity,” Rosenberger says. “So they increased the shift overlap to two hours, and bumped up the quotas in the WMS. The fleet utilization data proved they accomplished more work.”

Leveraging fleet data in the WMS can inform slotting as well, Ignac says, whether by helping to place items in a way that is easier for operators to reach, or by helping to classify A-, B- and C-movers. “If you’re using telemetry with GPS, you could track the path of the lift truck as it moves through the facility and decide you need to change the placement of machine or set of racks to change paths and reduce travel by 30%,” he says. “That is a real benefit that can be determined by this technology.”

That said, few customers are inclined to mine the abundant data to identify these opportunities and prefer to have relevant insights delivered to them. When at all possible, Simmons says that they also prefer a unified interface for all the brands of telematics solutions, battery management devices, impact monitors and the like.

“Less than 2% of fleets in the United States are the same brand,” Simmons says, “so we must get to a point where every OEM or third-party system can talk to each other to provide one report in a usable format. This will take customers driving us to it, and not all of us will like it, but there’s a greater good—and that is the customer.”

Simmons says WMS providers will also have a role to play in the future of fleet management.

“In the end, in my opinion, WMS will rule fleet management,” he says. “In the meantime, we on the lift truck OEM side don’t need to be spending a lot of time on pick path optimization and a lot of those details, because they’re not our strengths. For the moment, fleet management and WMS will be two separate systems. Maybe five years from now, because it’s all about sending and collecting data, I think they will begin to converge.”

Companies mentioned in this article:


About the Author

Josh Bond, Senior Editor
Josh Bond is Senior Editor for Modern, and was formerly Modern’s lift truck columnist and associate editor. He has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce University.

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