LIFT TRUCK FLEET MANAGEMENT.
Is your business the same as it was five years ago? Last year? Even six months ago?
Probably not. Materials still need to be moved and handled, but load sizes, weights and storage
systems are constantly changing. So are products, customers and customer expectations. In fact, the very way of
doing business is in continuous flux.
If you haven't evaluated your lift truck applications and usage in the past couple of years,
it is time to assess them again. In some cases you may only need to adapt your materials handling practices; in
others, you may have to modify, augment, or replace your forklifts to deal with changed demands.
That could be relatively simple. But this reassessment must go beyond just upgrading your fleet.
You need to look at the complex bundle of issues surrounding powered industrial trucks ­ choosing the right
machine, power source, tire options, etc.; buying vs. leasing; maintenance; the pros and cons of outsourcing fleet
management; finding the right service supplier; training issues; safety regulations; and, of course, new developments.
Let's start with those first. Most of the new developments are in the areas of increasingly sophisticated
electronic controls, ergonomic cab designs to reduce operator stress, and safety devices to comply with ever more
stringent industrial truck regulations.
How much it costs to keep an industrial truck in good and safe operating condition depends a
lot on your approach. Here are a few tips:
- Measure your operating cost-per-hour against a benchmark based on the replacement cost-per-hour
of a new unit. The older a lift truck gets, the more it costs to maintain it. Eventually, there comes a point when
you cannot afford to run your trucks beyond their economic life. The trick is knowing when you reach that point.
Track maintenance costs-perhour (total parts and labour divided by utilization hours) and ownership
cost-per-year (purchase price less resale or scrap value). Where the two lines cross when plotted is the best time
for replacement.
In general, there are three approaches to equipment maintenance:
- Do it yourself in your own repair shops. Make sure you factor in the investment for tools, parts
inventory, shop space, fringe benefits, training, supervision, and unproductive time.
- Share the load by using your skilled mechanics for routine maintenance but purchase all other
service work from your dealer. This lowers maintenance costs and raises efficiency.
- Leave fleet maintenance to a competent service company that will do the job fast, right the
first time, and usually at a reasonable cost. This saves you both headaches and money.
- Buying, leasing or renting used to be a simple choice. Most people bought a forklift outright
or with a loan. Now, about half of all industrial trucks are leased or rented.
Selecting the best financing arrangement for your business requires a close examination of the
options available. They are:
- Purchase outright. You own the machine, you can take advantage of depreciation write-offs, and
possibly benefit from capital investment tax credits.
- Conditional sales contract. You make a downpayment and regular payments with interest over a
specified period of time. At the end you own the unit.
- Lease. You acquire the forklift for an agreed-upon time period and make regular payments. At
the end of the lease period you can either return the unit or buy it for a pre-determined price.
- Rent. You pay a regular fee, which also covers maintenance costs.
Long Term
Long-term leasing may well become the financing method of the future. It simply makes good economic
sense: it's worry-free, it reduces administrative burden, and you can benefit from using state-of-the-art equipment
without immediate capital outlay. Short-term rental lets you cope with temporary materials handling log-jams ­­
test orders, seasonal peaks, inventory time, etc.
Driving a car doesn't qualify you to be a productive, safety-conscious lift truck
operator.
You must be trained in the basic principles of industrial truck operation: understanding the
components, knowing how loads affect balance and stability, comprehending capacity ratings and attachments, understanding
the stability triangle.
Effective training programs can improve operator safety performance by up to 70 percent, and
a safe, trained operator is a productive one.
Arthur Brook is general manager of Fork Truck Training Limited in Scarborough, ON. He says clients
often confuse certification with licensing, do not understand who is reponsible for what, and are not aware of
the three legislative bodies governing the use and operation of powered industrial trucks.
The law requires that the operator knows correct procedures and be able to organize the work,
apply the legislation, and be aware of hazards while operating materials handling equipment. F.T.T. provides training
at your facility, resulting in reduced maintenance costs, fewer product damage incidents and improved productivity,
with a faster return on your investment than off-site training can deliver.
The comprehensive program encompasses training not only for equipment operators, but also for
supervisors and managers, and goes far beyond just training the staff for compliance. Brook says it starts with
the trainers visiting the client's company and familiarizing themselves with site conditions and particulars, making
sure that all safety requirements are in place.
The bottom line is this: do you have properly trained operators? Does your mobile handling equipment
operate safely and efficiently? And do you get a good return for your investment? If so, you are managing change
correctly.
Core Strength
Over the last few years, outsourcing of non-core business activities has really caught on. Handing
over these jobs to experts, who can do them more effectively, cuts costs and reduces inefficiencies.
So, why do some companies still insist on owning their powered industrial trucks? Is a forklift
a tangible asset? Is it to avoid finance charges? Is it pride of ownership?
The basic economics are really quite simple: own what maintains its value or appreciates, and
rent or lease what depreciates. And industrial trucks certainly do depreciate in value ­ very quickly in
multiple-shift heavy operations.
Mark McFadyen is president of Yale Industrial Trucks Ontario Limited in Woodbridge. He and sales
manager George Gola attest that there are very few valid fiscal reasons to justify an equity-ownership position,
when a company replaces its fleet every three to four years because of increasing maintenance costs and nonproductive
downtime. On the other hand, it is economical to own when you use a truck only for single shifts, for light applications,
and less than 1,500 hours per year. As a rule of thumb, the cost-effective replacement life of an IC-powerd truck
is 8,000 to 9,000 hours, and for an electric truck it is 10,000 to 12,000 hours.
McFadyen and Gola stress the importance of realizing that successful fleet management consists
of "integrated and interdependent factors," and cost-effective fleet operation depends on:
- Quality-built materials handling equipment.
- Job-matched batteries and chargers in the case of electric vehicles.
- Selecting fuel-efficient IC/LPG equipment.
Studies show that annual fuel cost savings of up to $1,500 per truck in three-shift operations
are possible.
Choosing the right number of trucks. Be realistic. Base your needs analysis on empirical evidence
and benchmarking.
- Sticking to service intervals and maintenance dates. Operations must give maintenance custody
of the equipment when PM schedules call for it.
- Acknowledging the need for competence in electronics. Today's machines have many sophisticated
and complex electronic components, making factory training and specialized diagnostic equipment, such as PC-based
software, a pre-requisite for being able to properly adjust them to maximize their performance potential. With
microprocessor circuitry on board, it may take a factory-trained OEM mechanic mere minutes to diagnose what may
take a non-trained trades person hours. And time really is money.
FORKLIFT OPERATION AND
SERVICE.
BE SURE TO VISIT THE HOME PAGE FOR INFORMATION ON LIFT TRUCKS REPAIR, SERVICE,
TROUBLESHOOTING, AND EVERYTHING YOU NEED TO KNOW ABOUT FORKLIFTS AND THEIR USE.
