(Courtesy: Wayne S. Grazio at flickr.com)
Like it or not, this is the time of “big data.” Analytic software is helping businesses streamline their operations resulting in more profits and more efficient operation.
Warehouse managers are already taking advantage of management systems including lift truck fleet management and labor management. These systems have been used separately to make forklift fleets and employees work more efficiently. However, by integrating the two systems a warehouse manager can get a fuller understanding of a warehouse’s entire operation leading to more cost savings and better use of equipment.
It permits warehouse managers to:
· Measure Performance
· Eliminate Avoidable Costs
· Ensure Efficient Equipment Use
Peter Drucker, a famous business consultant, once said, “What gets measured gets managed.” Analytic software does that and it allows managers to see where improvements can be made so that they can make them. Warehouse managers who have been using labor management systems and lift truck fleet management systems have found a way to combine the data from both to better evaluate tasks within their warehouses to measure the affect on profitability.
By itself a lift truck fleet management system permits a fleet manager to obtain, study and then act upon data about their forklift fleet operations. This permits them to control and reduce costs involving the fleet.
Meanwhile, a labor management system (LMS) gathers data about worker activity including inventory handling, equipment use and traveled routes. This data brings to light operational activity that was not measured in the past and permits the manager to take steps to improve operations related to material flow and use of labor.
Used separately, each system offers reports specific to its discipline. So a fleet manager can know what is going on with his forklift fleet and the operations manager can know what is going on with his employees. Each can then make improvements in their particular departments.
Reports generated by an integration of the systems will allow all managers in the warehouse to know such things as what is driving costs within the warehouse, departments, process and categories. Managers know on a daily basis what is going on, so they can make changes and increase profits.
Moreover, the data from a combined report can help the operational manager assign forklift drivers by productivity and equipment use. It permits a facility manger to track individual performance against projected budget for each task. This will help the manager to contemplate possible improvements and make changes before the month is over.
The integration of labor data with equipment data permits managers to analyze costs through a method known as activity-based costing (ABC). It is a strategy that encourages managers to analyze costs by tasks. It assigns costs based on performed activities and it emphasizes actual costs, not averages. So data concerning the cost of putting away products can assist managers to make informed improvements concerning such things as trailer placement and slotting.
Managers can improve productivity by discovering inefficiencies of employees, material flow or use of the equipment.
Integrating systems can assist in eliminating avoidable costs. Consider this: experts say that 30 percent to 40 percent of forklift maintenance costs are avoidable. Managers will be able to identify them with the monitoring achieved by the integration of fleet and labor management systems.
A fleet manager can make cost cuts based on generated data concerning battery functions, impact issues and fleet health. The data achieved from a fleet management system can help managers evaluate ongoing maintenance costs for each forklift. The manager will know when an older forklift’s maintenance costs are beyond its usefulness and will alert the manager that it is more cost-effective to replace the older lift with a new one.
The integrated systems will help to ensure efficient use of equipment because it offers data that shows how productive the forklift operator is and whether the correct lift is being used for an assigned task.
Here’s another statistic to consider. About 72 percent of the average equipment costs goes to labor. An integration of labor and forklift management systems can help managers determine how productive the forklift driver is and whether he is using the proper equipment for the assigned task. It will also identify information concerning a forklift operator’s productive versus nonproductive tasks. The integration of these systems focuses in on how much time the driver is actually using the lift, how long it is being used and how long the lifts are idle. The data can be compared with labor data generated by the labor management system to show how productive the driver is per task. It is not surprising that a manager might find that the labor management system’s report shows that the driver is performing 100 percent of the time while the forklift management system’s report shows that the equipment is used less than 50 percent of the time. A manager who realizes this can make improvements to assure greater productivity.
Finally, the data can also identify when a forklift is being used for the wrong job. For example, data can show that a reach truck is being used for long horizontal transportation causing unnecessary wear and tear on the lift. Knowing this, a manager can assign a more appropriate lift to the task.