Fork lift fleet management

Owning and maintaining might not be the wisest financial approach

Every day, you make decisions that determine the future of your company. No doubt your job gets tougher when
you're continually being asked for new ways to boost your company's bottom line. Developing and implementing a comprehensive fleet management program may very well be the solution to part of the problem.

Corporate managers look at every aspect of their business to determine if activities and assets are adding value o r have ceased to be cost-effective. Recent capabilities allow businesses to measure
these items to determine their value.

One of these capabilities is fleet management. It allows a manager to measure the life cycle cost of an asset to determine when it is no longer a cost-effective asset. For those interested in moving dollars to the bottom line, maybe you should consider fleet management.

$1 billion goes to waste
For years corporations held the view that they should own and maintain their lift truck fleet and keep machine turnover low. This, unfortunately, led to higher maintenance costs because the age of many machines exceeded the optimum economic life for the asset. One estimate indicates that North American businesses spend $1 billion annually in excess maintenance for non-productive lift trucks.

Many companies now realize that lift trucks are like other capital equipment. As the asset ages, maintenance costs escalate. So, these companies took action. They found that once they provide for fleet management with maintenance programs and planned replacement criteria, they save thousands to millions of dollars. In addition, they gain greater productivity from their newer fleet for three reasons--less downtime, newer technology, and better fuel efficiency. Also, in many cases, they find that with these efficiencies, their operations now require fewer lift trucks.

A lift truck reaches its optimum economic life when the combined costs of ownership and maintenance reach a minimum.

The second of the three steps is to compile a fleet history. Do this by conducting a thorough analysis of your mobile power equipment. The history report should include the age of the equipment, its condition, and its cumulative operating hours. This report is the initial step by which companies get an accurate view of their fleet's productivity.

An independent survey revealed that only six percent of 500 top companies were aware of the maintenance cost-per-hour of each lift truck in their fleet. Only 25 percent of those surveyed reported they had an information system that even tracked labor and parts expense by truck.

In setting up a fleet monitoring system in your company, make sure it answers the following questions.

• Which department is costing the most within your overall fleet or operation?
• What model in your lift truck fleet is costing you the most? The least?
• What lift truck application is costing you the most? The least?
• Which brand of lift truck is costing you the most? The least?
• How many hours are each of your service technicians actually billing to a fork lift repair work order?
• What are your total fleet costs?
• Can you report and analyze the costs monthly? Quarterly? Annually?
• Which of the units are being heavily utilized? Least utilized?
• What is the per-hour maintenance cost for each of the units in the fleet?
• How many and how often are PM procedures being done on each of the units?
• What percentage of the total repairs and dollars are attributable to abuse, by unit?

A lift truck reaches its optimum economic life when the combined costs of ownership and maintenance reach a minimum. In the long term, replacing lift trucks at their point of lowest cost saves dollars for your company.

Determining a truck's optimum economic life is reliant upon your understanding of this philosophy. In the truck's infancy, maintenance costs are small, while efficiency and productivity are at their greatest. At the end of your lift truck's optimum economic life, it will have reached its lowest point in combined ownership and maintenance. Replacing your lift trucks at their lowest point of cost saves profit dollars for your company in the long term. Waiting too long to replace them means that maintenance costs increase while productivity decreases. Use these charts to indicate when it's time for a change (see Figure 1, and 2). The charts apply to electric or internal combustion lift trucks. Further, to maximize the economic life cycle, select a lift truck with a history of highest resale value for a given model. The higher the resale value, the longer you can mintain a lift truck cost-effectively.

An independent survey revealed that only six percent of 500 top companies were aware of the maintenance cost-per-hour of each lift truck in their fleet.

Eighty-five percent of lift truck acquisitions are completed using some form of financing arrangement. Your lift truck dealer will provide consultation regarding the specific equipment available and various types of financing such as leasing.

Under a leasing arrangement, companies lease lift trucks for two to seven years. At the end of the term, they exchange the old lift trucks for new ones. This program consistently replaces aging lift trucks.

Your dealer can also devise a purchase schedule. Using this approach permits your company to plan on replacing lift trucks at a specific time period. Both leasing and a purchase schedule are excellent methods that enable you to plan and budget for replacement equipment.

If you have an in-plant maintenance team, your local lift truck dealer can provide crucial support for:

• developing a scheduled maintenance program based on specific operating conditions,
• providing training for your service team, and
• providing just-in-time parts support and service.