August 16, 2010
strategic insight | Lift Truck Fleet Management

Survey: Forklift fleet management programs still a work in progress

Survey: Forklift fleet management programs still a work in progress

Our exclusive survey shows that lift truck fleet managers are making a stab at gathering performance data on their vehicles. But they're not always making good use of the info they collect.

By James A. Cooke

This fall, hardware distributor Emery-Waterhouse plans to abandon paper-record keeping on the forklifts at its Portland, Maine, warehouse in favor of outfitting the trucks with electronic data recorders. The reason? The distributor wants to take a more scientific approach to vehicle replacement in its fleet of 20 or so electric forklifts. "The data recorders will give us statistics on usage and engine performance," says Mark Maloney, Emery-Waterhouse's director of operations. "The software will tell us when the cost per usage is rising and you should replace the truck."

While the benefits of a data-driven approach might seem obvious, it turns out that Emery-Waterhouse is more the exception than the rule when it comes to the way it manages its fleet. A recent DC Velocity reader survey found that only a quarter of the respondents have adopted a formal fleet management program. Formal fleet management programs typically track key data, such as hours of use and repair records, for each vehicle in a fleet. This information allows managers to optimize truck usage and to determine the economic tipping point at which it becomes more cost effective to buy a new truck than repair the old one.

The respondents' go-slow approach runs counter to the advice of lift-truck dealers and independent third parties, both of which advocate the use of fleet management programs. With a formal fleet management program, they contend, users have immediate access to detailed data on all of the vehicles they oversee. Not only can that information help streamline daily operations, they say, but it's also useful for strategic decision-making. For example, data on a vehicle's operating history could prove invaluable to a manager who's trying to determine whether a vehicle has reached the end of its useful life.

All over the map
The spotty use of fleet management programs in North American DCs was just one of the key findings of DC Velocity's lift truck survey, which was conducted earlier this summer. In all, 362 readers representing a broad cross section of industries completed the online questionnaire, which looked at how companies manage the lift trucks in their warehouses and DCs. The largest share of respondents—41 percent—worked in wholesale or industrial distribution, followed by 17 percent from consumer goods manufacturing and 14 percent from the retail sector.

The fleets run by the survey respondents range from the very small—10 or fewer trucks—to the very large (more than 100 vehicles). However, most fell somewhere in between. The majority (57 percent) of the respondents operate fleets with fewer than 25 units, and another 31 percent oversee fleets of between 26 and 100 trucks. Only 12 percent had a fleet of more than 100 trucks.

As for the type of trucks these operations use, electric vehicles topped the list. A full 88 percent of the respondents said their fleet included electric models. Other vehicles mentioned included internal combustion units (used by 26 percent of the respondents) and liquid petroleum-powered vehicles (25 percent). In a sign of the times, 2 percent reported using trucks powered by fuel cells.

Roughly three-fifths of the survey respondents (59 percent) own the trucks they operate, while another 11 percent lease or rent their vehicles. Thirty percent reported using some combination of buying and leasing.

When it comes to maintaining and repairing their trucks, most of the survey respondents have chosen the outsourcing route. Nearly half the respondents (44 percent) have their vehicles serviced by dealers, while 27 percent use third parties. Another 27 percent reported that they used some combination of dealers, in-house operations, and third parties. Only 9 percent—typically those with the largest fleets—said they handled all of their maintenance and repairs in house.

Tracking the trucks
While their approaches to data collection may vary, the majority of respondents do keep some kind of records on the vehicles they use. Eighty-one percent track repair costs for each truck, 80 percent keep tabs on the hours each vehicle is used, and 78 percent maintain logs on the repairs made to each vehicle. In addition, 64 percent keep records on routine maintenance work, like tire and battery replacements. Only 25 percent track equipment utilization by specific drivers. (See Exhibit 1.)

Notably, while four out of five respondents keep some type of records, they don't necessarily pull out these records when they go to make vehicle replacement decisions. Just 59 percent of the survey respondents said that they used the data they collected to determine when to replace a truck.

As for how respondents go about collecting vehicle performance data, methods range from the strictly manual to the highly automated. Predictably, the research found a strong correlation between fleet size and the use of electronic recorders, with the large fleets far more likely to use automated systems than their smaller counterparts (see Exhibit 2). For instance, while two-thirds of operations with 100 or more vehicles had formal fleet management programs in place, only 13 percent of operations with 10 or fewer trucks had adopted such programs.

That's not surprising, says Chris Roy, a national accounts manager at Kenco Material Handling Solutions LLC, a Toyota forklift dealer that also offers a fleet management program. Companies that only operate a few forklifts don't see a need for a formal program because they tend to keep track of their equipment themselves, he says.

For operations with hundreds of trucks to track, however, an automated data collection system can take a lot of the pain out of the process. Better yet, these systems contain report-generation and data crunching capabilities that make analysis a breeze, users say. "Our fleet management program keeps all the data in a format that we can manipulate to gather specific data upon request," wrote one respondent, a vice president of distribution for a retail industry company. "It identifies trucks with high repair costs," said another reader, a warehouse manager in the wholesale distribution sector with a fleet of 100-plus units.

Fleet management experts say the survey findings jibe with their experience. "Owners of large fleets are more apt to have a formal data collection process and outsource maintenance to achieve that objective," says Greg Martin, president of Anaheim, Calif.-based Challenger Enterprises, a third-party provider of fleet management services. He adds that large companies use this service to ensure compliance with Occupational Safety and Health Administration (OSHA) rules that require them to maintain a work-order history for each lift truck.

Matt Logan, director of marketing and product management at Crown Equipment, agrees with Martin that businesses with larger fleets are more apt to invest in fleet optimization tools. "To realize a return, you have to be in a position to make an investment," he says, "and we've been in a period when expenditures for new projects have been significantly limited—if not eliminated. When customers have made this investment, they've told us that our system has increased the profitability of their operation and provided a return on investment."

[Exhibit 1] What fleet managers monitor
Metric % of users
Repair costs for individual trucks 81
Hours of equipment utilization (by individual truck) 80
Equipment repairs for individual trucks 78
Standard maintenance 64
Equipment utilization by driver 25
Fuel or power usage for individual trucks 12
When it comes to the type of records fleet managers keep, repair costs topped the list.
[Exhibit 2] Who's using fleet management programs?
Size of fleet Has program Does not have program
One to 10 trucks 13% 13%
11 to 25 trucks 22% 78%
26 to 50 trucks 23% 77%
51 to 100 trucks 46% 54%
More than 100 trucks 67% 33%
Operators of large forklift fleets are more likely to have formal fleet management programs in place than their smaller counterparts.

About the Author

James A. Cooke
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP’s Supply Chain Quarterly and a staff writer for DC Velocity.

More articles by James A. Cooke

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