Don't even think about buying equipment until you've defined your short- and long-term requirements, using historical data and anticipated applications. Ask yourself: How do we want our operations to perform? What does our order profile look like? How will it change over time?

Your checklist should also include considerations such as severity and variety of applications, uniformity of loads, condition of operating surfaces, government restrictions, additional equipment required for safeguarding and level of operator supervision.

And, before you decide on equipment based on your current operation, explore less-expensive alternatives.

As for how to determine what some of your needs might be, keep in mind that participants in the WERC study said their investment decisions are primarily justified by return-on-investment (ROI) criteria, and that equipment supporting growth and customer requirements gets highest priority.

Finally, be sure to include operators and supervisors on your equipment-selection team.

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You need to convert your requirements into a bid specification that communicates what you need from suppliers and expect from equipment. Though it seems simplistic, making your specs as clear as possible is critical, but is something many managers fail to consider seriously.

The bid specifications may include:

site description
functional information such as unit load, clearances, tolerances, safety issues and installation conditions (including time frames and union considerations)
instructions to bidders on pricing structures, deviations and schedules
contract-approval and administration details
financing and warranty requirements
acceptance-test conditions
planned-maintenance schedules
training expectations
availability of spare parts

Once you have a clear plan that includes specifications, implementation and investment schedules--along with an ROI analysis--you have the clout needed to justify your purchasing requests to top-level executives.

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When it comes to systems integration, the most appropriate vendor should provide each piece of equipment.

Waddle cautions, though, against purchasing some items from different companies, such as electronic conveyor-control systems from one company and the conveyor itself from another. This situation can lead to difficulty in diagnosing trouble and other problems, like finding compatible components. Waddle adds that for reliable equipment that is easily serviced, seek well-known manufacturers that use off-the-shelf parts and an open architecture that allows the parts to be used. If you choose a company that employs a proprietary so-called black-box system, your mechanics may not be able to fix breakdowns without ripping out the whole system. Also, look for vendors who will help configure your installation to allow fast access when you need it.

Once you've narrowed your search, get operating procedures in writing and ask to see the equipment in action--but make sure it's a comparable application.

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If you're purchasing complex automated equipment, or your staff isn't qualified to perform high-end maintenance, you should consider buying an extended warranty. As for maintenance, it's common for warehouses to outsource maintenance contracts, so make sure you get solid references from the third party, and from other warehousers, if possible. Also, clarify what regular and emergency maintenance will be available from the third party.

Before signing a contract, specify types of training offered at purchase and in the future. With lift trucks in particular, you must know what kind of remedial or reinforcement training will be available and customary, especially since the Occupational Safety and Health Administration (OSHA) is expected soon to tighten its existing requirements on forklift-operator safety-training programs. You need to ask the vendor: How will training be accomplished--self-paced, on the floor, in the classroom? How will shifts and peak periods be accommodated? You don't want so many workers being trained that your facility's productivity suffers. Keep seasonal productivity peaks in mind, too, when planning training. Mechanics should be involved from installation on and given a dedicated period of time to understand the system.

Savvy managers know they must make the case for appropriate investments in training from the standpoints of safety and cost. Training should be considered a capital investment rather than a capital expenditure, because if you don't invest the money on the front end, you end up paying it in worker's comp and low employee morale.

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Leasing is generally as attractive as buying, if you're likely to replace the equipment at the end of the lease term. A typical lease runs for five years.

When evaluating equipment purchases, look at more than performance rates. By conducting an in-depth audit and soliciting user feedback, you can confirm whether your ROI is attainable and thus obtain management buy-in for future purchase requests.

The more sophisticated the system, the longer you'll need to wait to do an evaluation. Experts recommend installing new equipment during slow periods, starting with a soft load, and then gradually working up to pace so that you can debug the equipment before hitting full capacity.

Different warehouses use different evaluation methods, too. At Michel Distribution Services in Belcamp, MD, the operations group uses a daily diagnostic checklist and monitors performance monthly. If your initial evaluation yields red flags, work with your employees and vendor representatives to refine your equipment specifications. And don't forget to double-check for proper warranty coverage.

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You're shortchanging yourself if you look only for the lowest-cost vendor. Sure, it's good to get a bargain--but in the long run, you're getting a bargain if you pay the right price for dependable equipment and service. Other considerations are important, too.
They include:
Flexibility
Commitment to safety and training
Proximity
Reputation
Ability to understand your needs

And don't stick with a vendor merely out of loyalty. Expect your regular provider to bid periodically for your business with two or three other vendors. That might keep your vendor competitive and you on your toes as a negotiator.

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And don't define your needs from thin air. Look at data from your operation and consider what applications you'll demand of equipment.

Nail your definition down by asking yourself:

How you want your operation to perform
What your order profile looks like
How your operation changes over time
What the severity and variety of applications may be
What your uniformity of loads may be
About the condition of operating surfaces
What government restrictions you face
What equipment may be needed to ensure safety and proper operator supervision
Whether you can find less-expensive alternatives

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When should you bring in a consultant to help with the equipment-buying process?

In a nutshell: When you decide you can't do it yourself. The time needed to plan, draw up specifications, bid, implement and evaluate material-handling equipment often makes managers seek consultants.

Of course, that outside expertise often comes at a hefty price. Whether you can account for the expense of a consultant depends on your ability to effectively manage the equipment-buying process without losing a grip on your other immediate responsibilities. Think of it this way: if handling the purchase properly by using your employees will cause a significant loss of productivity (and dollars), you can more readily justify the cost of hiring a consultant.

You're better off NOT using a consultant--as long as you're willing to invest the time and effort in doing it the right way.

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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.

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