Lift Truck Maintenance: Real time is real money
Once seen as a necessary evil, lift truck maintenance costs prove ripe for efficiencies that save money and boost productivity. We look into new best practices and technologies that help introduce discipline into fleet management.
in the NewsJuly U.S-bound shipments are solid, and August looks better, reports Panjiva July Cass Freight Index Report points to annual gains and sequential declines Truckload spot and contract rates seeing a summer bounce, says DAT Schneider Electric names Carlos Villa VP of U.S. industry business Transplace announces TPG is new equity partner More News
Traditional thinking about lift truck maintenance is rapidly breaking down. In the face of readily available data and proven techniques for cutting waste from costs once assumed to be unavoidable, fleet managers and service providers are working to introduce discipline to fleet maintenance practices.
The transition is evident in the popularity of outsourced maintenance arrangements. According to the 2014 Lift Truck User Survey, conducted by sister publication Modern Materials Handling, only a third of fleet maintenance is handled by in-house staff, 42 percent is outsourced to lift truck dealers, and another 21 percent is outsourced to third-party contractors.
The appeal of outsourcing includes the customer’s ability to focus on core competencies as opposed to managing its own parts, technician training, and service events. However, it’s not as simple as signing a contract and walking away.
“To wash your hands of fleet maintenance is to say you want to ignore waste,” says Mike McKean, fleet management sales and marketing manager for Toyota Material Handling USA. “You’ve got 40 other things to do that don’t involve what it takes to run a fleet. There are operations where they are so busy and so lean that they are very grateful just to have a forklift or a technician to do repairs.”
Some companies with in-house technicians like knowing someone is on hand to address a forklift when it goes down. “These are the kind of companies who typically don’t track utilization in the first place,” says McKean, who adds that this approach is typically based on reactionary rather than planned maintenance (PM). “They think they have some sort of PM plan, but they probably tend to run equipment to death and repair as needed.”
The industry is moving to a point where data and well-coordinated service allows predictive maintenance. Jerry Sytsma, general manager at Rapidparts, an affiliate of Mitsubishi Caterpillar Forklift America, says the goal is to move from diagnostics to prognostics.
Quality of service, cost of service, and downtime are the three key concerns, says Sytsma, adding that they are weighted fairly evenly. But while many fleet expenses are understood as little more than top-level budget lines, it’s visibility into individual events that highlights the best opportunities for improvement.
Accounting for accountability
Outsourcing maintenance is not a guaranteed fix for a fleet’s maintenance shortcomings, nor is it a guaranteed cash cow for the dealer or third party. The structure of an agreement should promote accountability—and subsequent changes in behavior—for both stakeholders.
Sytsma offered the example of a large customer who regularly battled with its lift truck dealer over warranty claims related to transmission failures. After installing sensors that enabled remote monitoring, the dealer was able to collect data about each instance that a lift truck operator switched from forward to reverse without coming to a full stop.
The system logged more than 2,000 events on an operator-by-operator basis each time they switched gears at 3 miles per hour or more. Within 30 days, Sytsma says, virtually all transmission failures halted.
This story illustrates how data can take the guesswork out of identifying costs and their root causes, in turn benefiting the customer and service provider. In years past, it was difficult to get a sense of the true cost of maintenance, if identifying that cost was even a priority.
It was also a challenge to vet and verify the performance of a service provider. Although a lift truck dealer is most likely to have technicians with up-to-date training, these sorts of capabilities should not be assumed.
One of the best performance indicators, says Sytsma, is first-time repair rate, or the ratio of service events that are successfully resolved on the technician’s first visit. “It’s a great way to measure either the technician’s capabilities or the dealer’s commitment to parts inventory,” he says. “If a technician has to come back between travel, setup, and downtime, that can create 20 percent to 50 percent inefficiency right off the bat. One in five times is not bad, but if it takes two trips 75 percent of the time…that’s a problem.”
Pairing lift truck operators with a dedicated piece of equipment is an effective way of boosting accountability while addressing preventable damage, according to Russell Wells, senior national accounts manager at Kenco Fleet Services.
Some fleet management technologies enable immediate coupling of service work orders with pre-shift checklists to track damage back to an individual. “Any fleet should rely on operators to keep a keen eye for torn seats, hydraulic leaks, bent forks, you name it,” says Wells. “This can drastically reduce abuse. We have seen sites reduce these costs by nearly 100 percent.”
To take accountability a step further, some who have outsourced lift truck maintenance, HVAC maintenance, or other services are looking to unite all services and related metrics under a single third party.
Pat DeSutter, director of fleet management for Hyster, notes a proliferation of third parties aimed at organizing service providers. “Large customers with many locations like working with a single partner who can provide a system solution to oversee all of these categories,” says DeSutter. “Available technology makes it possible to bring all the data together, and we’ve even seen previously specialized service providers working to manage it all.”
An overarching third-party maintenance provider might also make life easier for purchasers, but just as with the connection between operators and technicians, purchasers can’t be too removed from the impacts of their decisions.
“Often they make one decision for an asset and then they are no longer involved,” says Toyota’s McKean. “A customer might lease a forklift with a full maintenance plan and walk away. They enjoy locked-in payments with the only other expenses being variable and avoidable damage not covered in the contract. That’s old school.”
According to McKean, a better way to manage a fleet is through a PM program based on utilization. “This will provide data to lean the fleet and understand peak or seasonal periods where short-term rentals make more sense than a long-term, under-utilized lease.”
Based on accurate utilization data, McKean says that most companies will find their fleets are larger than needed. “There’s probably an easy 10 percent fleet reduction once you start measuring,” he says. “But you can never prove that until you get data in front of management.”
A proactive, real-time approach to fleet costs can help address small problems before they become big issues. Over time, trends can help inform budgets based on consumption, not calendars. “How can you budget for your fleet when you don’t know what your real costs are?” asks Wells. “That might not be a ‘real’ number, but is instead based on something you did before.”
Uptime and cost-per-hour used to be the main metrics for maintenance, according to Steven LaFevers, telematics solutions manager for Yale Materials Handling. “That’s not nearly enough now,” he says.
That approach will suggest that during slow times a fleet enjoys a better cost per hour, which worsens during busy times. According to LaFevers, when looking at cost drivers, it’s important to find the root cause—and there is value in drilling down into the operation by operator, by utilization across units for like activities, and other key details.
“Fleet management is not just about the cost of the lift truck, but its use as well,” says LaFevers. “There’s a pitch and a swing; data gives you the pitch, but you better be ready to swing.”
By collecting and analyzing data, a business can make more informed decisions on the way to breaking everything down to cost per hour—which is not a matter of dividing annual maintenance spend by the hours on a lease. Instead, each part should be accounted for.
“Customers can get to the point where they have the OEM recommended parts stock list that allows them to not have as much capital investment or space tied up in inventory,” Wells says. “With only needed parts on hand, we’ve seen inventories cut by as much as half.”
First, Hyster’s DeSutter recommends the creation of a good, clean inventory of assets by department and usage. “Sit down with the controller, maintenance management, or facilities management and make them all part of the process,” he says. “What do you want to manage? Is it possible to know how long an asset is down, the repair time associated with that event and the parts consumed? The goal is to improve uptime, thus productivity and throughput. It can be a different kind of conversation than execution and procurement are used to, but common ground for a huge spend should not be hard to establish.”
Diagnosing the problem, seeking care
With common ground defined within an organization, the process of securing the right service provider can be greatly simplified. While it’s not necessary for either the customer or the dealer to use technology and telematics, any data collected will help prevent waste and downtime.
“A lot of the time, downtime is just waiting on approvals for service,” LaFevers says. “With detailed information, you can make those decisions quickly and optimally. The business justification now takes seconds. Otherwise, it might be a series of weekly gut-level decisions to see if you have the money or if the lift truck is worth it.”
Clark Simpson, product marketing engineer for Clark Material Handling, warns that even with visibility and a capable partner, outsourced maintenance agreements still present the opportunity for pitfalls.
“A customer might contract fleet maintenance by the month, but the worry is they are giving the service provider a blank check,” Simpson says. “Instead, some will accept the lowest bid and then it’s in the third party’s best interest to do the least amount of work. This can be kind of an ugly deal.”
Within each service event, the issue of proper diagnosis is another key hurdle. “Often a service provider doesn’t get paid to diagnose,” says Simpson. “For instance, a wiring issue can eat up several hours of a technician’s time, resulting in a big cost the provider hadn’t planned for.”
The increasing complexity of lift trucks compounds the problem. In years past, checking the spark plug or fuel would be enough to get a lift truck back up and running. “Just within one OEM it has changed from a simple carburetor to four different fuel systems,” Simpson adds. “You have crank sensors, map sensors, O2 sensors. Each can cause a no-go and there might not be easy ways to spot them.”
When bundled with leases, fleet maintenance programs can include some very troublesome fine print. For example, some lessees have suffered at the end of a lease when a unit needs $2,000 of repairs to reach the agreed-upon residual. A 10-truck user could be looking at $10,000 to $15,000 at end of lease, which the dealer might forgive in exchange for renewing a deal.
“Both customers and dealers should understand transparency as a way to gain trust,” says MCFA’s Sytsma. “This profession, whether automotive or for lift trucks, has a public perception that customers can never really know if they’re paying too much.”
McKean suggests three initial steps to improve the likelihood of success. First, check an existing maintenance plan for efficiency and quantify the maintenance spend. Second, analyze if dedicated in-house labor is cost effective as compared to as-needed labor. Third, look to demo a telematics system to see what additional data reveals.
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!
BMW Takes the Inland Road to Efficiency Global Logistics: No Shortcuts to Security View More From this Issue