How long would a coffee filter last in a modern forklift? That's a question that might occur to you if you looked to your company's general ledger account to find out how much you're spending on maintenance. According to Jim Gaskell, director of global Insite products for lift truck provider Crown Equipment, the general ledger account is a dumping ground of data for many companies. Apparently their accounting departments feel there's not much difference between air filters and coffee filters—so you may see both of them there.
Jim made this observation during a Crown webcast on fleet maintenance last week. It might seem like a ploy to grab the audience's attention—but it was backed up by his co-presenter on the program, Sean Bennett, director of financial operations for MBM Corp.—a Crown fleet maintenance customer. MBM also happens to be one of the nation's largest customized foodservice distributors for national restaurant chains. If anyone would know the difference between a coffee filter and an air filter you'd think it would be him.
But even Bennett admitted that eight years ago, looking at his company's general ledger was not a good way to find out what lift truck maintenance was costing him. And according to Gaskell, that's not unusual. In fact he's heard customers complain that they spend more than a million dollars on lift truck maintenance every year. But when Gaskell asks how many lift trucks are in their fleet, he's often answered with silence. They haven't a clue. His retort is, “So how do you know a million dollars is a bad number? It might be a good number.”
Bennett could relate to his fellow stumped maintenance managers.
“We knew how much we spent on material handling equipment but when we asked ourselves how many pieces of equipment we had and whether that was a good amount, we didn't know the answer,” he said.
Bennett worked with Crown to find out, implementing Crown's InfoLink wireless fleet and operator management system. Today every piece of MBM lift truck equipment is identified at the serial number level, and they know every type, make and model in their 1,000-vehicle fleet.
“We paid 15,000 invoices annually for material handling maintenance before,” Bennett said. “With this system we pay one invoice a month and we have information on each serial number. We know how much we spent by DC, by truck type, make and model, how much on parts and how much on labor. Knowing that has allowed us to extend our fleet's material handling life cycle by two or three times.”
By upgrading their maintenance operations and getting better equipment utilization, Bennett says his company has reduced its fleet by as much as 22% in some of its facilities, while at others it was more like 8%, translating to about a 10% fleet reduction overall. But equally important, Bennett knows more about his fleet than he did before.
“We went into this wanting to know one or two things about our equipment and once we got into it we realized there were 10 or 15 things we needed to know,” he said. “The idea that we would know how much we spent on parts and labor at the serial number level is something we never thought would be important to us. But now we know how often we use parts, how often a part or a truck fails in our environment and whether or not there's something we need to do differently within our operation that would change that.”
Today lift truck fleet analysis can give a manager hard and soft costs to better understand return on investment. Soft costs used to be ignored when it came to ROI, according to Bennett.
“But soft costs are real, they're just hard to measure,” he concluded. “That doesn't mean they don't exist.”
Unlike the Mr. Forklift coffee filter.