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Distribution & Fulfillment
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Material Handling Equipment

How MHE Impacts Speed of Fulfillment

Posted by Jeff Burns

 

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Today’s world is driven by a culture of demand, with constantly increasing customer expectations that leave no margin of error when it comes to fulfillment. Manufacturers and warehouses that bear these loads must ensure air-tight operational efficiency in order to keep pace with these demands and can only do so with the right material handling equipment (MHE) in place.

Finding the right mix of MHE to optimize operations is different for each customer based on how they plan to use it and the environment in which it will operate, so partnering with the right vendor for purchasing, renting, and maintenance needs can make a huge difference in costs and productivity. Operations that employ the right levels of MHE, invest in innovative technologies, and closely manage their fleets, will optimize their speed of fulfillment and gain valuable insights to improve overall efficiency, costs, and safety.

Optimizing levels of MHE

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When evaluating a customer’s needs, and how to help them optimize their operations, we find most companies have more MHE than they typically need. This is because most engineers err on the side of caution when determining the optimal number of units and typically use a safety factor, which may add more units than necessary to ensure compliance. For example, if an engineer calculates that a specific distribution operation requires 20.2 units, often the tendency is to purchase 21 units.  A better approach could be purchasing 20, and the 0.2 could be covered by a short-term rental agreement.

Companies should consider utilizing short-term rentals in their fleets to overcome peaks in their operations verses sizing their fleet for high points. Rentals can make a big difference when used strategically, but unfortunately, many customers forget about their rental units once the high point has passed. Having someone who oversees the equipment and understands the benefits is crucial to making the most of short-term rentals.

Additionally, most MHE users react strongly and negotiate aggressively on the initial purchase price of MHE, not considering the total cost of ownership over the life of the equipment. We always tell customers our rule of thumb for purchasing MHE is– 20% of the cost is at purchase, and 80% is over the life of the vehicle for maintenance. Companies that sacrifice quality by purchasing cheaper MHE often end up paying more in the long run.

Setbacks of insufficient MHE

Having the wrong, or insufficient MHE for your facility can result in thousands, if not hundreds of thousands of dollars in losses, particularly when it comes to larger companies with fleets of 500+ vehicles. Specifying the wrong lift for your operation can have a domino effect, leading to numerous costly and time-consuming issues.

If MHE models aren’t spec’d properly, workforce productivity suffers and may lead to unsafe working environments as well. Safety is everything – many customers don’t emphasize this necessity when buying equipment. Not knowing exactly what your operation needs can cost you more than time and money.

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Unlocking efficiencies

In order to keep up with today’s high expectations and real-time customer demands across supply chains, companies need to be forward-thinking when it comes to their technology and equipment. Cutting operational costs is a never-ending battle, but there are ways to go about it without falling behind. We are seeing more warehouses using electric pallet jacks, electric riders, and tuggers, which are cost effective ways of optimizing operations as opposed to purchasing traditional sit-down trucks, which are much more expensive.

Investing in emerging technologies will be vital for companies to remain competitive in the next few years. Telemetry, which allows MHE to utilize the IoT is the next step in getting intelligent data and insights that will increase innovation, efficiency, visibility, and compliance for warehouses and DC’s. Not only will companies’ bottom lines improve by having updated MHE infused with these powerful tools, but workforces will also enjoy benefits of safety, increased productivity, and stronger morale.

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Along with innovative technologies, investing in fleet management is arguably the best way to minimize costs, maximize the output of equipment and workforce, and collect valuable data for overall optimization. It may not sound as cool as telemetry but having a team that oversees your fleet and understands the actual cost of each unit is a sure way to avoid unnecessary costs and downtime. Effective fleet management should answer the following questions:

  • How should I finance this equipment?
  • How many pieces of equipment should I have?
  • How am I utilizing each piece of equipment?
  • What is the downtime on each unit?

If you do not have someone overseeing your fleet and collecting data on it, you can bet there are significant dollars at stake. Knowing the ins and outs of your fleet and having the proper checks and balances in place to ensure accountability and visibility is the best way to maximize warehouse operations, increase productivity, and ensure you are meeting and exceeding customer fulfillment expectations.

Jeff Burns

Written by Jeff Burns

President at Kenco Material Handling Solutions

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Kenco provides integrated logistics solutions that include distribution and fulfillment, comprehensive transportation management, material handling services, real estate management, and information technology—all engineered for Operational Excellence.