The acquisition cost of a forklift is only one factor in the overall cost of ownership. The majority of costs involve operating and maintenance expenses. While fleet management is widely known in the trucking industry, it is also a big advantage to companies using it for their forklifts and other material handling assets. Oftentimes, implementing a fleet management program results in a significant cost savings and a longer equipment life cycle.
Fleet management is not a small project. Without a dedicated resource to manage the project, knowing the real cost of your forklift fleet is nearly impossible. While a vendor specializing in fleet management can be secured, understanding the program and justifying the costs can be daunting.
Benefits of Fleet Management
Once implementing a fleet management program for your forklifts and other equipment, you will be able to answer more questions about your production, including:
Do you operate the right equipment?
Equipment must be suited for the weight and size of the transported product as well as the available warehouse space and racking.
Is every forklift in use?
Based on the hour meter and the number of warehouse shifts, it is important to determine if every forklift is optimized. Every forklift will be located in the warehouse and analyzed for how often it is operated. A forklift used in a lower usage area may be periodically swapped with a forklift used in a high production area.
Do you have too many or too few units?
After determining the usage of each forklift, it will be decided if the size of your fleet is appropriate for your production.
Are forklift operators driving safely?
Unsafe operation results in damage and needed repairs of the equipment. Incidents found to be abuse are not covered under warranty, generating unexpected maintenance costs. Regular forklift training classes and consistent safety messages can be implemented to decrease the amount of incidents.
Are repair and maintenance invoices consistent and accurate?
Determining the budget for repair and maintenance can be difficult. Many administrative hours can be spent processing purchases orders and invoices for the equipment. A thorough review of each invoice for consistency and accuracy will answer if your company spends additional dollars for a lift having the same repair as another lift at a different cost. Analysis of the planned maintenance (PM) frequency can also point to inefficiencies and additional cost. Planned maintenance done too frequently or not often enough can both have negative cost implications.
Do you know why downtime occurs?
Research of downtime may show how the issue originated. Reviewing trends by department, operator and type of equipment can point to areas of opportunity.
When is it time to replace equipment?
Understanding the true cost of ownership is the key to determining whether it is in the best financial interests of the organization to keep or replace existing equipment. A fleet management program will help track the cost per hour of existing equipment while simultaneously running a comparison of the costs associated with acquiring a new unit with comparable specifications. The guess work is eliminated and replaced with concrete data to aid in the decision making process.
Considering a fleet management program for your facility? Our equipment specialists are available to evaluate your equipment fleet and answer questions.