DC Velocity - February 2009

equipment&applications LIFT TRUCKS

to determine what the fleet should look like and how to get there. Part of that process is deciding what equipment needs to be replaced and establishing a schedule for that. Bratton advises fleet managers to determine a metric for cost per operating hour specific to their own operation to help guide future equipment replacement decisions. The goal, he says, is to develop a plan to ensure that the fleet is operating at the lowest possible cost with the highest possible equipment utilization.

As for what the optimal cost might be, Bratton says there is no “magic cost per hour.” The nature of an operation, the condition of the facility, and other factors create great variability.

LaFergola agrees that the type of operation has a big effect on the cost per deadman hour. “Grocery operations will be higher than pharmaceuticals,” he says. “Pharma operations are clean, they have an immaculate product, and the product is light. Grocery products are heavy, the warehouses are not as clean and the floors are not as smooth, and throughput is running full bore, so the cost per hour is going to be higher.”

The end result of the analysis should be a comprehensive plan that includes details on retiring and replacing lift trucks in the fleet. In some cases, Russian adds, the plan might also call for redeploying trucks. “The best use may not be in that given facility,” he explains.

.O B OND FAILUR ES

GUARANTEED

4(% .%84 '%.% 2! 4)/. /& ,/!$ 7(%%, 3 &2/- 350% 2)/2 4)2% 25""% 2

4(% 02/",%- 3/,6% 2 4HE #USHOTHANE 8, TAKES THE WORRY OUT OF HANDLING

HEAVY LOADS HIGH SPEEDS AND LONG RUNS WITH AN INDUSTRY EXCLUSIVE .O "OND &AILURE 'UARANTEE

Put it to work

Once a plan has been drawn up, the all-important implementation stage follows. “The customer can begin right sizing the fleet based on the operation and any finance options that may be available,” says Russian. For example, one fleet manager may choose to outsource maintenance at a fixed monthly cost, while another may opt to have maintenance billed on an hourly usage basis, and a third may elect to handle maintenance in house. Each of those has cost implications that must be clear at the outset. And the decision must fit with the DC management’s comfort level.

A thorough fleet evaluation, development of a plan for change, and implementing that plan can take several months. And the plan could have some upfront costs of its own for such things as fleet management software or electronics to keep detailed records on truck use.

Implementation steps may also be limited by financial factors, such as time remaining on the leased vehicles’ contracts or depreciation remaining on owned vehicles. And it requires a commitment by management at all levels. “The key piece to that is the customer actively responding to recommendations,” says Aitcheson. “That can be very difficult.” Often, he says, managers have grown accustomed to having more backup equipment available than is strictly necessary. So implementing a successful program may require a shift in attitudes as well—likely driven by executive management insistence.

Still, the rewards can be substantial. Aitcheson estimates that customers on average save about 15 percent on overall fleet costs within the first year. And that should be just the beginning.

All of the fleet management specialists interviewed for this article stress that fleet managers have to build into their operations a way to perpetually evaluate and improve their fleets. “You can get the fleet right sized, then it can get fat over time,” says McKean. “What are you going to do to retain, retire, and redeploy equipment on a consistent basis?”

The ongoing monitoring should include regular tracking of truck utilization, maintenance costs, and operational issues such as lift truck accidents and their causes. “It is important to have the tools to segment where the money is going—tire expenses, rack damages, and so on—to make intelligent decisions,” Russian says.

Aitcheson adds that nowadays, fleet managers can obtain reports that break down spending by facility, by vehicle, even by specific components. Managers can also get reports that compare facilities or that break out top component issues or damage issues, he says. “That’s where fleet management really takes off.”

Ongoing improvements are the key to long-term gains, Aitcheson says. And long-term gains are what smart managers should be aiming for. “Everyone is tightening their belt this year,” he says. “But you want benefits for the next three, five, seven years.”