Lift truck fleet management: Deploy, discover, decide
Optimizing a fleet is not an exact science. Although technology can help, it’s often the culture on the floor that makes or breaks a fleet management program.
Latest NewsThe State of the DC Voice Market Making the Case for FedEx Critical Inventory Logistics Panjiva says U.S.-bound waterborne shipments see gains in December and for 2017 LTL rates seen zooming in excess of 5 percent this year, veteran truckers say Retail sales finish 2017 with momentum, says Commerce and NRF More News
Latest ResourceMaking the Case for FedEx Critical Inventory Logistics FedEx Critical Inventory Logistics is designed to help companies streamline and drive costs out of their aftermarket service supply chains to meet customer service level agreements and grow their bottom-line revenues.
The role of the lift truck is in the midst of significant change. They’re increasingly fitted with onboard sensors, designed for integration with labor management and warehouse management systems (WMS), and supported by data-driven maintenance practices. The days when a lift truck simply moved product through a facility without capturing detailed information at every step could soon seem downright laughable.
The value of precisely controlling a fleet’s costs, operators, safety and performance has been proven. But the creation of a successful fleet management program is an entirely different animal when compared to other improvement projects. Upgraded conveyors will produce a consistent and immediately measurable increase in speed. A redesigned workstation will result in a specific space savings. But, an effective fleet management program is a process of constant discovery with little ability to pinpoint a precise goal. Elaborate hardware and software might not be necessary to make some progress, but a substantial cultural shift almost certainly is.
To further complicate matters, the technology for accessing and analyzing lift truck data is evolving at a rapid pace. From mobile computers to cloud-enabled Web portals to onboard telematics, the available tools for fleet optimization can be a bit overwhelming—especially when the return on investment is hard to define.
In an effort to take some of the mystery out of fleet management, we spoke to suppliers of lift trucks and third-party fleet management products to get a sense of what pitfalls and success stories their customers have experienced. Whether you’re still paper-based or looking to stay on the bleeding edge, these insights might provide food for thought.
Blocking and tackling
Before any investment in hardware or software, a fleet manager should begin steering the operator culture toward accountability and consistent processes. There are some preliminary questions that might expose shortcomings, according to Mike McKean, fleet management sales and marketing manager for Toyota Material Handling USA. Are you being reactive or proactive? How are you charging batteries? Are operators allowed to do that? What’s your process? Is there damage to lift trucks, product or racking? Is operator training needed?
McKean suggests that a bulletin board be installed to outline the status of the fleet and any avoidable damage each month. “Create an awareness that operators are being monitored,” says McKean. “It’s a matter of communication. Maybe you need to have periodic operator meetings to set those expectations around compliance or consequence. This should be a part of a manager’s job description, and does not require any hardware or software.”
From there, an entry-level investment in impact monitoring equipment or remote hour meters will supply some basic data points. It may take some time to establish a baseline or begin any improvements, but this process cannot be rushed.
“For the people who go from no fleet management to an all-encompassing data collection methodology, it becomes too much information and they end up not doing anything,” says Brian Markison, director of North American sales for UniCarriers. “Take those minor steps and get the basics down. It might lead you down paths you couldn’t have predicted as you learn things about your specific application, fleets and operators.”
Phil Van Wormer, executive vice president of TotalTrax, a third-party provider of fleet management hardware and software for lift trucks, emphasizes the importance of change management throughout the process of improving fleet management. “A lot of customers ask themselves if they are ready to deploy these technologies,” he says. “You need to be prepared to invest in that change, sponsor it and support it. Don’t expect instant gratification.”
Eventually, the answers to McKean’s questions will help answer some even bigger questions. Should I have electric or internal combustion lift trucks? Should I lease or own? How many years should I lease?
“Those questions will become easier,” says Nick Adams, business development manager for the Mitsubishi Caterpillar Forklift America fleet services group. “You’ll have the courage to go to electric knowing you will have higher up front costs, but with data proving that in the long term it will cost less.”
The same data could inform any number of fleet-related decisions, says Adams. “You might prove you can install a multi-pallet handler attachment and reduce the size of the fleet while moving the same amount of product,” he says. “It’s the same with storage density models if you’re looking at standard, narrow or very narrow aisles. Before any project, you will have data that shows a reduced fleet or higher throughput.”
Adams sees big advances coming in the telemetry needed to reach that level of certainty, but he again stresses the basics. “You have to have the blocking and tackling down first,” Adams says. “A beautiful Web portal is one thing, but if you don’t have basic processes, it’s not going to add value.”
Taking it to the next level
With the basics in check, it might be time to invest in the next layer of data collection technology. Having established an understanding and commitment to continuous improvement will increase the likelihood that this data can be used to inform sustainable change.
Given the rapid evolution of fleet management technologies, cloud-based or hosted software solutions are gaining popularity, according to Scott Craver, product manager of business and information solutions for The Raymond Corp. This option helps the customer avoid information technology costs associated with an on-site deployment, such as server maintenance, outages and backups.
A remote system can also simplify the installation of telemetry equipment because a service technician does not need to be on site to access each lift truck’s computer. Otherwise, it could take five to eight weeks of going live to collect information, load information, scan an operator’s access badges and configure the system, says Craver. Now it can be done remotely over a weekend.
From there, it’s a matter of identifying priorities and targeting them. Some might choose to address battery management issues, an emerging capability of fleet management technologies.
“Typically, fleet management is about lift trucks and operators,” says Craver. “We’re starting to see the next big customer pain point and that’s the battery.”
Associates are often responsible for the management of, for instance, a $6,000 reach truck battery. They might be running the batteries until dry or never equalizing them. A battery sensor can monitor its temperature, water level and currents in or out. A lift truck left in the freezer could even send an e-mail or text alert before the battery is damaged. Battery data could then be coupled with lift truck and operator data through a single portal.
Other operations might focus on the cost, duration and details of service transactions. In retail, for instance, there is increased interest in dissecting this information, according to Pat DeSutter, director of fleet management for Yale Materials Handling. “Customers are adopting independent solutions to hold all service providers accountable, whether for lift trucks or HVAC,” he says. “They are banking a lot on their service levels to their stores and these technologies allow them to evaluate service providers in terms of actual cost as well as intangibles in service levels.”
A straight line between customer service levels and lift truck downtime is a concept that effective fleet management can highlight. As DeSutter puts it: “Fleet maintenance is not just a means to an end, but an integral part of their business.”
Modern systems can generate a service call, know when the work order was entered, when someone is on site, when the work order is closed, as well as parts availability. This granularity helps a fleet manager define and monitor the ideal speed and efficiency of a service transaction.
The labor management connection
The initial acquisition cost of a lift truck accounts for as little as 20% of the costs associated with its use over time. Most of the rest is spent on the operator. A lift truck might cost $10,000 to $40,000, but the operator costs $45,000 per year for three shifts, according to TotalTrax’s Van Wormer. “That’s $135,000 per year of labor for one lift truck,” he says. “If fleet optimization can trim a fleet by just one unit, you’ve got a return on investment within a year for that alone.”
The ability to track real-time data about the movement of the vehicle, the performance of the operator and the position of inventory is of growing interest to fleet managers and equipment suppliers. “I see fleet and labor management converging into a common platform using the same type of mobile computer device,” says UniCarriers’ Markison. “We’ll soon be able to overlay the fleet performance layer with the operator performance layer, which will in turn be overlaid on the WMS, whose understanding of the facility will be vastly improved.”
In the past, visibility into operator performance was based primarily on hourly rates. “But if we can see that an operator was only on the lift truck 50% of the time, well there’s an easy way to improve that individual’s productivity,” says Jim Gaskell, director of Global Insite Products for Crown Equipment.
Aside from more detailed monitoring of individual performance, fleet management can lead to better overall labor standards. “Right now, the WMS only tells an operator to perform a move and only collects the amount of time between command and completion,” says Gaskell. “If that’s 10 minutes, that’s a big visibility gap. How would you know why one operator takes 10 minutes, and another 15?”
Instead of an engineer with a stopwatch, labor standards can derive from real data as opposed to averages. Add them all up, and a picture of the optimal fleet begins to emerge. Customers are often able to reduce their fleets by 5% or 8%, says Gaskell, and one customer cut 15%.
Whether or not reductions are possible, combined fleet and labor data can reveal some surprising dynamics. “When I see operations who pay lift truck operators on an incentive basis, I see a facility that is missing the big picture and not measuring the whole process,” says Toyota’s McKean. “It’s the wrong signal to send. Operators will be harder on the lift truck itself, won’t charge effectively, and often accelerate and brake heavily. You find an array of dysfunctions while operators are incentivized to make more money.”
Instead, some facilities with strong fleet management programs are applying 75% of the savings to the bottom line and giving 25% to the employees, as much as $300 a month. “A lift truck operator now has a car payment just for being an average performer,” says Craver, “as opposed to incentives based on production that encourage the abandonment of good habits.”
Good habits, solid data and the type and quantity of equipment will always have room for improvement. Throughout the establishment of a fleet management program, Gaskell offers a piece of advice: “Expect to see an improvement every month until you reach the lowest possible level. And then, take it even further.”
Companies mentioned in this article
Crown Equipment, crown.com
Mitsubishi Caterpillar Forklift America, mcfa.com
The Raymond Corp., raymondcorp.com
Toyota Material Handling USA, toyotaforklift.com
Yale Materials Handling, yale.com
About the AuthorJosh 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.
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
2018 Customs & Regulations Update:10 observations on the “digital trade transformation” Moore on Pricing: Freight settlement and your TMS View More From this Issue