Other Voices: The Power of Data
March 29, 2011 - MMH Editorial
Editor’s Note: The following column by Joe LaFergola, manager of business and information solutions, The Raymond Corporation, is part of Modern’s new Other Voices column. The series, published on Wednesdays, will feature ideas, opinions and insights from end users, analysts, systems integraters and OEMs. Click on the link to learn about submitting a column for consideration.
How many lift trucks do I need? Do I have the correct models for the jobs I need to do? When do I replace a lift truck? How do I efficiently track what is happening across my entire enterprise in terms of productivity and costs? Can I reduce administrative overhead?
Is your head spinning yet? These questions — and many more — are being asked daily by warehouse managers and their supervisors, who are encouraging them to increase productivity and reduce costs. Whether managers oversee a single fleet or have regional oversight, visibility to key metrics is vital to optimizing a lift truck fleet and meeting productivity and cost-reduction goals.
There are several vehicle management systems (VMS) on the market. By leveraging the data available from these systems, managers can determine the answers their questions.
Recent survey statistics show that most warehouses have between 10 and 20 percent more lift trucks than they need. In addition, many companies have multiple facilities. Between the excess lift trucks and the overhead for processing related invoices (such as those generated by maintenance needs), warehouses can rack up tens of thousands of dollars in administrative fees.
? Scheduled and unscheduled maintenance related to the average lift truck can lead to as many as 20 work orders in one year. At a processing fee of $50 per work order, a fleet of 25 trucks generates an annual administrative burden of $25,000. By consolidating these orders into a single monthly invoice, there is a savings of $24,400 annually.
VMS systems can provide data that breaks down key hours (the number of hours the lift truck is turned on), deadman hours (the number of hours the truck is engaged in operation), and travel and lift time. Simple analysis of these data points can be very beneficial to optimizing a fleet by providing the opportunity to uncover areas for efficiencies within the facility.
? Examining the ratio of deadman hours to lift time can help a manager determine if the right truck is being used for an application. For example, a ratio for reach trucks and stand-up counterbalanced trucks should be 7:1, meaning there should be one hour of lift time for every 7 hours deadman. If the ratio is greater than 7:1, then these trucks are being used for horizontal transport and could be replaced by a less costly model.
? Data also can be used to determine inactivity time (time the truck is turned on minus deadman hours) or idle time (add up travel and lift hours, and subtract that number from deadman hours) by operator. Operators who are moving product will have a higher number of deadman, travel and lift hours, and lower inactivity or idle times.
OSHA-required preoperation checklists also represent an area of opportunity to be more sustainable and increase productivity. A recent time study indicated that, after completing the checklist, it took an average of 17 minutes to file the paper. By completing the checklist electronically, a savings of 15 unproductive minutes per checklist was achieved in the study. This translates to $54,687 savings in unproductive time for a 25-truck single-shift fleet ($35/hour times .25 hrs times 250 days times 25 trucks).
These are just a couple of examples of the power of data. But where is it all located? Look for a VMS that allows access to the data via a secure Web interface. A good system should remove the need to perform calculations, but graphically display the results that point facility managers in the right direction, enabling better management and facilitating the ability to meet those productivity and cost-reduction goals.