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Daniel Guiderathe companies out there.”To help readers gain some ground,we’ve created a set of guidelines fornavigating the adoption of an effectivefleet management program with thehelp of a panel of consultants, suppliersand end users. No off-the-shelf solutionwill work for everyone, but thesepractices will help fleet managers avoidwasting time and money as they reconnectto their fleet’s true costs.1) Understand what it isAccording to Nick Adams, businessdevelopment manager for theMitshubishi Caterpillar Forklift America(MCFA) fleet services group, fleet managersshould not fixate on assuming fleetmanagement has a single definition. “Alot of people will tell you that fleet managementmeans a full maintenance contract.That’s not necessarily true. Theyalso say fleet management will alwaysproduce cost savings. That’s also not true.Like any product, it’s a set of tools thatyou have to use correctly to get savings.”Michael McKean, fleet managementsales and marketing manager for ToyotaMaterial Handling, says it’s imperativethat fleet management not be confusedwith other capital expenses. “The companymight have five projects on theagenda, like a new roof or a new dock,”says McKean. “But those are just projects.Materials handling equipment isnot a project, it’s an essential part of awell-run business.”2) Know your needsA well-run business will pay attentionboth to its customers and to its statusas a customer, according to Adams.“You have to understand your requirementsrelative to your assets,” he says.“Two people may order different thingsfrom the same menu based on budgetand tastes, and both are good meals.”Before pursuing a third-party maintenanceagreement or new equipment,McLeod advises customers take stockof what they have and what it’s cost-mmh.com MODERN MATERIALS HANDLING / F E B R U A R Y 2 0 1 2 45
MODERN special reporting them. “I’ve seen operations with15-year-old trucks so well maintainedthat it makes sense not to upgrade,” hesays. “Other places have trucks that arethree years old and are a disaster.”Jason Bratton is vice presidentof business development for BEBIndustrial Asset Management, a thirdpartyforklift fleet management company.Bratton says that each customermight have its own preferences for howto do business. “Third-party invoiceconsolidation works for some but notfor others,” says Bratton. “End userseither find they need that service orwould rather keep control over it forother reasons.”According to Patrick DeSutter,director of fleet management forNAACO Materials Handling Group,customers need to understand theirasset mix—especially short-term rentalsthat have overstayed their welcome.“You need an enterprise-wide mindset,”says DeSutter. “A series of separate programsmight not be working toward thecommon good.”3) Communicate, communicate,communicateCommunication is often the single bestway to ensure progress toward the commongood. And it’s important to communicatenot just with your fleet managementpartner, says Bratton, but alsowithin your organization. “It’s criticalfor the success of a rollout,” he says. “Ifwe’re calling a site to begin a preliminaryfleet assessment and the first timethey’ve heard about us is from us, that’sa problem.”Effective communication is aboutmore than memos. A discussion ofmotives and objectives with a fleetmanagement partner will help a customerlater evaluate the service. Andcommunication within a companygenerates enterprise-wide buy-in thatcan be essential for the success of theprogram. A new fleet managementprogram is unlikely to succeed if it’sas fractured and disconnected as theproblem.4) Don’t change too quicklyInitial communications can brace anorganization for change. But as fleetmanagers work to identify costs, it’sessential to collect data at a manageablepace and to react to the data with incrementalsteps, not sweeping change.“In fact, some clients should notchange anything in the first threemonths,” says Bratton. “It allows yourfleet management partner to establisha baseline. Let’s not go in guns blazing,saying we need to change this, firethem, buy these trucks.”Depending on how well-capitalizeda customer is, rapid change might notbe a problem, says McLeod. A customermight instead plan to evolve overfive or more years if it doesn’t have thecapital to swap an entire or partial fleet.“Take things in bites, with a methodicalapproach and frequent pauses to reviewgoals and progress,” says DeSutter.Once a customer has established abaseline it can then address things likeavoidable damage caused by either theoperator or the facility design. “Thesecan be significant costs,” says DeSutter,“as high as 25% to 35% of the lift truckmaintenance spend.”5) Put a maintenanceprogram in placeToyota’s McKean says that he understandswhy lift truck retirements,replacements and rotations often getshuffled to the bottom of the prioritylist. “For facility managers, their priorityis not managing lift trucks—it’s movingproduct,” he says. “So, as long as the lifttrucks are getting that done, that’s goodenough for many people.”However, this can lead to a reactiveinstead of proactive approach to thingslike maintenance costs. “The problemis that many people only recognize adowntime problem if they happen tohave a half dozen lift trucks in the shopat one time,” says Jim Gaskell, directorof Global Insite products for CrownEquipment. “All trucks need maintenance,all of which must be managed,not just when it becomes a big enoughproblem to be visible.”By that time, the negative impactwill become visible elsewhere as well, asproductivity and throughput suffer. “Anyimprovement in maintenance efficiencywill also improve the main goal of productmovement,” says McKean. “Fleetmanagement should be employed at alllocations, but it’s not. More customersneed to rely upon a fleet managementtool to manage their fleet.”6) Control costsTo budget effectively you need to lookat maintenance costs and lock them in,says Fleetman’s McLeod. “The worstsituation any lift truck user can get intois a pay-as-you-go maintenance program.As soon as you do, you can beheld hostage by the dealer.”McLeod also recommends thatcustomers negotiate fuel contractsand lock in those costs as well, eitherat a fixed rate or by tying costs to a46 F E B R U A R Y 2 0 1 2 / MODERN MATERIALS HANDLING mmh.com
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