As an owner or operations manager dealing with material handling equipment, where do you go for answers in these scenarios?
Scenario 1: Orders are up, trends are in the company’s favor, the product is positioned right for steady growth and you are ready to take the leap; more space, more production lines, new docks for shipping and receiving, racking adjustments, etc. You think you need more and maybe different equipment, but what type and how much is the question. What is the right size of a fleet to ensure we don’t siphon our new cash flow directly to our local forklift dealer?
Scenario 2: Supply costs are suddenly through the roof and show no signs of coming down, orders are on a prolonged slow down, and the macro-environment has changed putting your product on the outside of a trend looking in. You need to right-size your business to focus on your core products while you adjust your strategic focus. How do you discern the appropriate size of your fleet in your new world? Which machines do you currently use to full capacity? What is the right size for your fleet after volume changes?
In either scenario, the stakes are high. Maybe higher than you think. The equipment itself isn’t chump change, but 80% of the cost of each piece of equipment is in the personnel it takes to run it and repairs it will need. If you are off by as little as a couple standard forklifts, you could be overspending hundreds of thousands of dollars when accounting for over staffing and the costs of operating too many lifts. Whether shrinking or bulging at the seams, there is never a good time for wasting profit on unnecessary expenses. So where do you get your information to answer these questions in an informed way?
Ways We Answer Material Handling Fleet Questions
In House – The 17th Century Weatherman
Usually management information systems (MIS) don’t extend to measuring utilization of equipment, tracking cost per hour of operation, etc. So when decision points arrive we ask our operational staff questions like “Can we use this piece of equipment for this new task?” or “Is there anything we can get rid of in our material handling fleet?” In the absence of objective data, we are asking our well-intended staff to be 17th century weathermen. Picture the moment of silence, the index finger going up in the air as if to check the wind, and then a series of statements that amount to SWAG’s (Scientific Wild #$% Guesses). To no fault of our own, it’s human nature that we remember the last and most expensive repairs on a machine. Consequently, we will probably guess in error which machine has overall lowest cost of ownership. Our operators also might say we can get rid of one or two of our machines because the rest are “almost always” busy. This approach likely leaves us “almost” accurate…and if accurate, we still don’t know if it’s one or two. Can you see that index finger up in the air?
Local Equipment Dealer – The Umbrella Salesman
There’s nobody better to help answer questions about material handling equipment than people who sell material handling equipment, right? Your salesperson arrives from your local equipment dealer and gives his or her recommendations based on MHE expertise. Guess what? What a coincidence! What you need is exactly what they sell! It was obviously meant to be, right? You were brilliant to call the right people and they were so concerned about helping you in your business (and about getting that P.O. done asap). In this scenario, you might end up having a couple more machines than you need. Just maybe. More often than not, if you ask an umbrella salesman about the weather, rain is in the forecast.
Brand Independent Fleet Manager – The Meteorologist
You can only make decisions with precision if the right information is available and measured precisely. And the person making your recommendations on those decisions should not have any bias as to the brand of equipment you might need. These are the qualities that make a meteorologist different from an umbrella salesman and a 17th Century Weatherman. It is also what separates a Fleet Manager from a salesman. By Fleet Manager, I don’t mean black boxes strapped to your MHE that spew data at your MIS system like a wood-chipper leaving you waste deep in data, trying to make sense of it. I mean a person – living and breathing – partnering with you and your business and using state of the art measurement tools as a part of a strategy of helping you manage your material handling operation as efficiently as possible. The result is data-informed decisions, efficient operations, and peace of mind knowing if a storm brews, you have Doppler radar available versus a waggling finger.
At Fleet Team, Inc. we strive to be a long-term partner with our clients by taking a consultative approach to every service we provide. We want to stand beside you with our collective eyes on the horizon, forecasting with you as best we can so a storm never catches you unprepared.