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North American business loses $1 billion dollars of profit annually in
over-maintaining their materials handling equipment alone. Your company may
contribute to this total, through the approvals given to spend $100, $500,
even $1000 on maintenance for your lift trucks or other equipment types, because smaller amounts
are easily appropriated. When you utilize this method of maintenance,
you can ultimately replace a lift truck piece by piece, and in many cases, exceed the
cost of acquiring a brand new unit.
The solution to
this over-maintenance dilemma is to compile a "fleet history." Only
when you know where you've been can you move forward on reducing costs
while extending the productive life of your capital equipment.
The best place to start is by doing a complete survey of your materials
handling equipment. This would include knowing the age of the lift truck,
the application you run it in, all the associated maintenance costs, and
your operators productivity. These elements provide you with the information
to know when to fix, scrap or replace units in your current fleet of lift
trucks.
Each willing unit is costing your company money whether or not
it is running, and knowing when to replace those lift trucks will make
a difference in your bottom line profits. Every lift truck has an optimum
economic life, where in the beginning, maintenance costs are small, and efficiency
and productivity are at their greatest.
At the end of your lift trucks
optimum economic life, it will have reached its lowest point of cost
in combination ownership and maintenance expenses. As the chart shows,
replacing your lift trucks at their lowest point of cost will save profit
dollars for your company in the long term.
As a result of replacing a lift truck, you are trading the future expensive
component replacement and maintenance of the old unit, for the inexpensive
preventative of the new lift truck. To examine this cost relationship,
the following example of a 10-unit fleet has some units that were kept
beyond their optimum economic life and the second chart depicts the same
fleet that follows the suggested optimum economic life replacement plan.
|
COST OF RETAINING LIFT TRUCKS BEYOND
- OPTIMUM ECONOMIC LIFE |
|
Year |
Model |
Hours |
Avg. Maint. |
Term |
|
1986 |
truck#1 |
1464 |
4873 |
60 |
|
1990 |
truck#2 |
1600 |
0 |
60 |
|
1987 |
truck#3 |
1843 |
4887 |
60 |
|
1987 |
truck#4 |
3405 |
6975 |
48 |
|
1990 |
truck#5 |
1929 |
0 |
60 |
|
1987 |
truck#6 |
4189 |
9451 |
36 |
|
1982 |
truck#7 |
805 |
2033 |
60 |
|
1976 |
truck#8 |
690 |
1697 |
60 |
|
1977 |
truck#9 |
1274 |
2483 |
60 |
|
1977 |
truck#10 |
300 |
1927 |
60 |
|
|
MAINTENANCE TOTALS |
For the owner of this 10-truck fleet, maintenance costs grow progressively
worse each year beyond Optimum Economic Life. Total expenditures could
easily pay for a number of new lift trucks. The chart below illustrates
what this customer's projected savings could be if they replaced those
lifts.
View Chart
The savings you receive in a maintenance program can justify the reinvestment
into newer lift trucks when the older units reach the end of their optimum
Economic Life. If you compare the two charts, the amount of savings you'll
find is a progressive increase, for example in the 1st year - $28,496,
2nd year - $28,631, 3rd year - $51,771, for a total savings of $177,453.
This customer's yearly average cost savings for the next five years is
$33,994, he has also decreased the number of lift trucks requiring extensive
maintenance for 8 units.
But now you're saying, "I can't afford to purchase a new fleet of
lift trucks - what are my choices?" There are any number of
options available to you based on your needs and business situation. For
example, many more businesses than ever before are considering various leasing options,
in part due to very attractive tax advantages. In many instances, the tax benefits, such as a possible complete tax deductibility
as an expense of doing business, has tremendous appeal.
The leasing approach gives you the use of a lift truck when maintenance costs
are minimal and productivity is at its greatest. Leasing also frees up
your companies capital for other ventures, plus your ability to forecast
future costs becomes more accurate.
These are just a
few of the benefits of Fleet Management... a service Liftech has provided
for literally hundreds of companies throughout the NY and Vermont
territories we serve. For answers about productivity, controlling your
costs and getting the most out of your lift trucks, talk to your nearest
Liftech
Equipment Companies branch manager
about Fleet Management. Every Liftech branch location is full service, and can deliver any of
a host of Fleet Management services...
regardless of
the make or models of vehicles you currently deploy. |
