How lift truck fleet managers can improve efficiencies and reduce costs
May 01, 2012 - LM Editorial
There are plenty of usual suspects when hunting for improved efficiencies in any lift truck fleet. For example, aging equipment, truck abuse, and under-utilized assets are all key sources of unanticipated maintenance costs. But are breakdowns, excessive damage, and unnecessary trucks really unanticipated?
According to Allen Polk, national accounts manager for Kenco Fleet Services, there is a big difference between being well prepared to react and taking steps early to prevent inadvertent costs. Simply suspecting a problem is not the solution, says Polk; instead, it’s the first step in what he calls the “awareness curve.”
“Suspicion, data, recognition, change,” Polk explains. “Companies that don’t go through the curve will tend to have higher costs. Awareness is the easiest and least expensive way to fix a problem.”
However, the current paradigm of fleet maintenance defines success as quick reaction to unplanned events—uptime at any cost. This is understandable. Because most fleet owners’ core business is about moving product, few have time to ask, for example, how many lift truck tires they go through on an annual basis. Instead, Polk urges his customers to consider the benefits of a strong partnership with a service provider, the judicious use of technology for data capture, and a culture of prevention, not reaction.
To help fleet managers identify and preempt “unanticipated” costs, we compiled a survey of best practices in fleet maintenance with some of the leading experts in the market. With some simple adjustments, most fleet managers will find that they can plan for the unplanned, improving productivity and safety while reducing costs.
Challenge assumptions, act on suspicions
Jim Gaskell, director of Global Insite products for Crown Equipment Corp., has a hypothesis: “If I gathered 10 customers in one room, all 10 would tell me that their warehouse is run better than all the rest, and they’d have plenty of examples to back up the claim. The thing is, they can’t all be right.”
The chances are that simply asking the right questions can expose their mistaken confidence. Gaskell says he once visited a customer who claimed to know every penny of their spend, but had not accounted for $40,000 in unusable inventory. Another customer had more than 100 trucks and, at most, used 80 percent of the fleet at a time—some of those were only used for a few minutes.
“I told them that they could remove nearly a third of their fleet and save that number times $30,000, right off the bat,” says Gaskell. The problem, says Gaskell, is that the planning model the customer used to determine fleet size could not be adjusted for actual utilization, especially since the fleet’s use was not being monitored.
“Some people base their business on the wrong model,” says Gaskell. “I always encourage people to look at the actual situation.”
This involves looking at metrics to determine actual cost per hour, but it can also be as simple as looking at the actual facility in which the lift trucks operate. That ramp between floor levels might look harmless, but it could be causing premature tire failure and lots of unnecessary costs.
“People don’t have an idea of what abuse is and assume it’s based only on what the operator is doing,” says Polk. “Abuse not only includes truck impacts, but can also be things like not coming to a full stop before shifting, going up ramps, or a crack in the floor of a facility. These things will cause excessive damage to a lift truck no matter what the operator does.”
Abuse in all its forms can make up as much as 30 percent of a customer’s fleet maintenance spend, according to Nick Adams, business development manager for the Mitsubishi Caterpillar Forklift America Inc. (MCFA) fleet services group. For some fleet managers, assumptions about abuse collapse when data is compared between facilities.
One facility manager in Chicago might assume that his fleet’s costs for unanticipated damages are excellent. If he learns a facility in St. Louis is spending less, he might be driven to improve even further. This site-to-site visibility establishes benchmarks and spurs an exchange of best practices that has reduced damage costs by as much as 7 percent for some customers, says Adams.
Another example of a wasteful assumption is the shift overlap, according to Polk. Say a customer runs two shifts, five days a week, with 30 operators on each shift. A two-hour overlap of 15 operators automatically requires them to have 45 lift trucks. If there’s no overlap, they can cut that by 15 trucks. In year one, you could see 10 percent to 20 percent, or even 40 percent to 45 percent decreases in cost.
“Overlap can be a necessary evil, but it forces costs way up,” says Polk.
Gather data from fleet, operators, and service providers
A clearer picture of true costs and systemic problems often suggests that outsourcing fleet maintenance is the best choice. More and more customers are outsourcing maintenance, according to Adams.
“Customers are finding it just isn’t a good use of resources. It’s the same reason you or I don’t work on our own cars, because we don’t have the training and diagnostic tools available.”
Before choosing a service provider, however, customers should ask how often the provider’s techs are trained, what the parts and labor rates are, and establish a consistent performance expectation, says Michael McKean, fleet management sales and marketing manager for Toyota Material Handling.
Adams says customers should also inquire about potential costs for a service technician’s time in transit. Assuming a customer does not have the roughly 60 units needed to justify a full-time, on-site technician, the challenge is to find out how to optimize the travel time for an off-site tech.
Customers should also ask whether their service provider’s technicians have GPS, Adams suggests. A good service provider knows exactly where each technician is and can dispatch the closest one to save their customer money and time.
A bad service provider, adds Gaskell, is typically characterized by a lack of training. Gaskell says that he has very large customers with as many as 20 percent of their sites’ fleets serviced by “a buddy from high school” or a comparably untrained source. “You’d be shocked. Some of them are auto mechanics who try their hand at forklift repair.”
When a customer has a great service provider, it’s very challenging to make the case that they should change OEMs, says McKean. On the other hand, it’s very easy to lose business if defendable data is not available.
“Perception becomes reality, so even a service provider that is doing a good job but doesn’t have the data to prove it is at risk of replacement,” says McKean. “A strong partnership equals a lifetime customer.”
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