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As warehouses wrestle with defining core competencies — whether or not to turn management of all or part of their lift truck fleets and maintenance over to third-party providers — the range of available models and mechanical abilities has never been greater. To offer some clarity to the range of choices available, we talked to four major suppliers of lift trucks and asked them to weigh in on the evolving needs of warehouse managers.
Participants in our lift truck roundtable are:
- Jeff Meyer, manager, Hyster Fleet Services
- Edgar Warriner, director of national and major account services, The Raymond Corp.
- Larry Sanders, rental and remarketing manager, Toyota Material Handling
- Warren Eck, vice president, Yale Fleet & Financial Services.
Logistics Today: How do you identify your customers' specific needs?
Yale: The first step is to survey current customer applications — where are you today? Then we work with the customer to determine future business needs, where the customer wants to go and how they are going to get there. The plan includes everything from right-sizing the fleet — making sure they don't have too many trucks or not enough trucks or the right type of trucks — as well as the proper length of time to keep those trucks in service.
Raymond: We visit the customer and work with them to understand their operations — what fleets they have, what equipment is being utilized and where, how much inventory they have on the books. We add up all of the costs for material handling, then we set a base line.
Hyster: Some customers view lift trucks as a key component in the production or shipment of product, while others view them as a necessary evil. Part of the challenge for fleet management is understanding and identifying a company's core competencies and determining what can be offered to supplement or improve their current situation. There is no “out-of-the-box” fleet management solution.
Toyota: We start by analyzing a customer's operation, and then offer a specific plan on a plant-by-plant basis. A customer may issue an RFP or RFI, a bid package they might send to all manufacturers asking for guaranteed savings, or on-going savings percentages. Those matters are only made specific after an analysis is completed and we've looked at their operations.
LT: What specific capabilities do you offer?
Hyster: We provide outsourced service and maintenance programs. A comprehensive leasing program can be implemented by working with our captive finance company, Hyster Capital. Our SMART (Service Maintenance And Repair Tracking) program allows customers to further reduce costs and provide fleet oversight through centralized account invoicing and reporting. The SMART program also provides the customer with an audit of every fleet-related expense for accuracy.
Raymond: We offer the full realm from scheduled routine maintenance to outsourcing their ownership of lift trucks and their maintenance. One of the most difficult parts of fleet management is data collection — interpreting the data, turning it into knowledge and then leveraging that knowledge to improve operations and contain or lower costs. We assist customers in developing benchmarks, baselines and annual budget and operations goals.
Toyota: We offer a two-tier process. Our first tier is made up of our 73 dealers and 185 branch locations throughout the U.S. Tier two is for larger national and global accounts, which are handled through our central office. We offer a cafeteria-style menu for fleet management. We've got the ability to do anything from a leasing program with reports on how customers are doing on the equipment leasing — hours of expectation versus hours of actual use — to that same program with a fleet metrics reporting system.
Yale: We establish where the customer is in their program. We have developed a software tool that serves as our base cost analysis calculator. It helps identify all areas of cost associated with running a fleet of equipment. The tool shows actual costs today — by year, month, piece of equipment, whatever the customer chooses. That tells us where we are. The next step is to establish the metrics we want to hit. Then we implement and provide reports to monitor how we are doing.
LT: Do you offer guaranteed savings?
Raymond: Yes. Depending on what the customer is trying to accomplish and how sophisticated they are in their material handling, guarantees could be anywhere from cost containment — that could be made contractual over a time period — to when they outsource fully to guarantee uptime.
Toyota: What we offer is not necessarily a broadcast, across-the-board savings percentage because that's difficult to maintain without having the full analysis of their operations. We are quite comfortable with doing a survey and an analysis and offering a specific savings on a plant-by-plant basis.
Yale: We offer a 15% savings and we guarantee that or the entire study is on us. Conducting a study involves flying around the country, taking time measurements and so forth. It is time-consuming and expensive, but the end result is a tool that's worth quite a bit of money. For us, it's a safe guarantee because we've found in many cases that there is a lot more than 15% to be had in savings.
Hyster: One of the first goals of any fleet management program should be to develop the procedures and processes needed to capture true and accurate operating costs, which establishes the initial baseline cost against which all future savings are measured. As a general rule, we are confident that we can help customers realize 15-20% savings during the first year and then 10-15% annual savings thereafter.
LT: How does a shipper differentiate one lift truck manufacturer from another?
Yale: I feel our equipment is superior, but I don't care what brand of equipment you're talking about — they are still machines that will wear out and break down, so the real differentiator between any lift truck manufacturer is how fast they can get them running again. When customers buy lift trucks, they don't really buy a lift truck, they buy tools to get a job done. It's a question of how efficiently you can get a job done for the customer.
Raymond: We differentiate ourselves through our people, particularly at the local level with top-notch, trained experts in material handling applications. It's not simply selling a forklift or a mast bolted onto a tractor, but it's understanding the customer's product flow and their strategy and how we can assist them in getting the pallet in the door and out the door.
Hyster: Our dealer network is what differentiates us from our competition. We can offer over 240 service locations with 2,500 service technicians. Our dealer organization can provide service and parts for non-Hyster lift trucks, which allows us to offer a “one-stop” service solution to our customers.
Toyota: You've got to involve a lot of the plant management to make sure the recommendations are right on. But beyond that, whether it's our program or somebody else's, if you're reporting on utilization, on cost per hour of operation, and if you're truly doing the analysis at the end of a fixed period — whether monthly, quarterly or semi-annually — then our process probably isn't a lot different than other manufacturers. What makes us stand out from the competition is the quality of the product. LT
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