Lift Truck Fleet Management and Optimization Programs (M&O) have been embraced on an increasing level to accomplish this goal.
To understand how an effective Fleet M&O Program can work for your company, we must first explore and understand all the components that go into the total cost of lift truck ownership, such as purchase price, interest expense, electricity, maintenance and labor.
The two components that most all companies focus on as they are the most obvious are purchase price and interest expense. However, these two items make up only about 14% of the total cost of ownership. Additionally, due to forces out of your control, there is little that can be done to affect these costs, and when that is possible, it can only be minimally impactful.
However, the remaining 86%, electricity, maintenance and labor, are costs that you can control through the use of an effective Fleet M&O Program.
Given the increased awareness regarding the importance of sustainability, many companies are placing increased focus on reducing energy costs and electricity, which contribute to 5% of the total cost of ownership. As electric lift trucks draw more amps they require more frequent battery changes which increase electrical costs as well as decrease labor productivity.
The traditional component of any Fleet M&O Program is maintenance tracking, as repair costs make up about 9% of the total cost of ownership. Although this is an area of significant opportunities, many companies focus solely on the accumulation of this data and not what to do with it, therefore missing areas of potential cost reduction.
Finally, the largest percentage of your total lift truck cost of ownership also happens to be the most overlooked, leaving the best opportunities to significantly impact your bottom line on the table. Labor costs make up about 72% of your total cost of ownership but often go unnoticed because they tend to be hidden costs or are assumed to be uncontrollable.
By simplifying processes, reducing touches, combining tasks, shortening travel and eliminating steps, labor and cost can be further reduced in the warehouse operation.
As lift trucks exist to move product, factors impeding the optimization of throughput should be analyzed. These include dispatching, inventory slotting and order packaging. t is important to note the efficiency of these functions not only impacts productivity but labor costs as well. Once the utilization is analyzed, forklift fleets can be right-sized for the application which often is the most important benefit of a Fleet M&O Program. For reference, conservative estimates have $52,000 of labor and operational costs being saved annually for every lift truck reduced from the fleet.
Although gathering all of this information can seem like a daunting task, there are software tools available on the market today that can compile various data points by using data capture technology embedded on the lift truck. Accordingly, material handling operations have the ability to immediately evaluate electricity, maintenance and labor metrics and act upon the information that directly shapes their bottom line.