How to Reduce Total Cost of Ownership With Forklift Fleet Management
Successful entrepreneurs have many things in common. Besides an excellent work ethic, being willing to take risks and learning how to be persistent, the prosperous business owner knows how to make the best use of a buck. These people are not necessarily book smart, but they make it a goal to learn and understand new things, as well as integrating tried and true business practices into their model. One thing that most people won’t argue about is how smart it is to be on the constant lookout for ways to reduce total cost of ownership (TCO).
What is TCO? TCO is what you pay from the time you acquire an asset to the time it leaves your books – because you sold it, traded it in or it simply reached the end of its useful life. Included in TCO is:
- Original purchase price, plus tax
- Employee training
- Ongoing maintenance
- Upgrades and additions
And let’s not kid ourselves – in the material handling industry, the equipment you need to purchase is not cheap. Of course, your cost will vary depending on what exactly you buy and whether it is new or used, but when looking at just the workhorse of the warehouse, the forklift, you will be investing plenty. Forklifts are the ubiquitous equipment in the material handling and DC space because a good lift truck can perform a lot of different functions.
So, being open to new ideas as they come into view and learning how to reduce your TCO on your material handling and DC warehouse fleet should be paramount when you look at ways to run your business efficiently and prosperously. But what are some ways you can accomplish this? Let’s take a look at some of the more important ones when assessing your forklift fleet.
As we mentioned before, the forklift is the workhorse of the warehouse. This valuable piece of equipment comes in so many forms and variations that there is sure to be something for every application. Whether your operation is indoors, outdoors or both, whether you are consistently moving the same material all the time or your loads vary and whether you are picking product and pallets or working in very narrow aisles and tight spaces, there’s a forklift for the job.
Because the forklift is an expensive investment, it’s tempting to sometimes ask your forklift to do something it just wasn’t built to do. Did you know that misuse of equipment is the number one reason why you aren’t realizing a low TCO? It’s also a big fuel waster and, if that’s not enough, using your forklift in a way it wasn’t meant to be used will significantly reduce its useful life span.
The takeaway here is that if you are willing to invest a substantial amount of money in a piece of equipment like a forklift, you need to commit to using it correctly in order to come away with a lower TCO.
As with any piece of equipment that has running parts, you are going to see friction, wear and tear. Depending on the size of your operation, you may be asking your material handling and DC warehouse forklift to work around the clock. And even if your forklift gets to take some time off every day, in all cases you need to perform preventative maintenance and repairs as needed.
You wouldn’t dream of running your car through the years without performing the necessary oil changes, tire rotations and filter replacements. Your forklift fleet is a much bigger investment than your car. And yes, maintaining a forklift fleet costs much more than an oil change in the family vehicle. But having a good maintenance program not only promises a lower TCO score, it can stave off expensive and time-consuming repairs. You can customize your planned maintenance to fit your schedule and your budget.
Taking care of your forklift fleet with a solid plan for sustaining its life through a good maintenance program makes sense when it comes to the bottom line. Letting an asset die young is not how you get a low TCO.
Fleet management is not necessarily a new idea. Most material handling industries have practiced some form of fleet management for a while now. Maybe it used to be with a pencil and stacks of crumpled, stained paper but it was a form of managing when equipment was used, for what, with whom and for how long. Maintenance and repair used to be – and still is in some cases – recorded manually, as well.
As we discussed earlier, one of the strengths of successful entrepreneurs is their willingness to look at innovative ideas as they come down the pike, as well as taking the risk of implementing something new that may better accomplish the trifecta of successful business: increased efficiency, higher productivity and faster throughput.
Today’s fleet management systems take advantage of new computer and web-based technology that’s not really new anymore. But it may be new to you! When you initiate a software-based fleet management system, you are taking proactive steps to lower your TCO and it’s simpler and much more accurate than keeping up with reams of paper. And as we’ve pointed out, taking care of your fleet is the name of the game when you want a low TCO.
Today’s software systems are capable of keeping you in the loop 24/7/365 in real time about numerous items related to the health of your fleet. These systems can deliver the important information you need in customizable ways that make sense to you. You’ll be able to make the right decisions with comprehensive analysis reports, plus have daily, monthly and annual comparisons for the small and big pictures.
In addition to receiving priceless data-driven information to help you make important business decisions, a forklift fleet management system will:
- Track expenses related to the equipment
- Show you when, where and for how long a piece of equipment is being used
- Alert you if equipment is being misused or is in an accident
- Keep track of planned maintenance
- And more!
When you evaluate what this type of information can do for you, you’ll find that you’ll be able to make decisions regarding equipment acquisition, equipment utilization, employee issues and solid overall business conclusions about your operation. And maybe most importantly, contribute substantially to that lower TCO you are after!
At Darr Equipment Co., you can contact us for more information about forklift fleet management systems and how they can help you achieve a low TCO.