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MHE Budgeting Best Practices for Your 2021 Solution

With Q4 underway and 2021 fast approaching, most shippers have already begun finalizing next year’s budget. If you’ve read our recent blog, “How 3PLs Can Help Shippers Implement the Best MHE Maintenance Plan,” then you know how big of a role MHE plays in a supply chain’s total operating costs (nearly 20%) and overall budget plan. To ensure you have adequate MHE to handle your operations effectively and your cost efficiently, follow these MHE budgeting best practices.

Establish key metrics to evaluate

Before shippers can begin to accurately budget for an MHE solution, they must establish key metrics to evaluate their costs. A key metric that many shippers have adopted is the cost per unit of production. This allows you to directly measure what you spend on equipment against your production output and it can be done by an individual unit of MHE or across the overall fleet.

Another key metric that should be established is the hourly cost to run a piece of equipment based on expected utilization for next year. As equipment ages, it consumes more parts and service, increasing its hourly cost – the older the equipment, the more room you need to make in your budget for both planned and emergency repairs.

Partnering with a trusted 3PL immediately streamlines the metric creation process. Kenco can look at MHE utilization levels applied to productivity for a given year and identify the associated spend as well as the amount of MHE needed to continue to hit that level of productivity.

Maximize data collection and analysis

Establishing key metrics for evaluation – a necessary first step to effectively and efficiently budget for your MHE solution – is rendered meaningless if these metrics are not being calculated with comprehensive data. Shippers using dated, manual data-capturing processes to glean insights from their MHE fleet are at an immediate disadvantage to those with access to today’s autonomous, self-learning systems.

Kenco has proprietary software, systems, and tools built to collect, aggregate, and analyze all data produced from MHE, giving shippers complete visibility into their daily activities. This holistic data analysis and reporting gives shippers the necessary tools to accurately build budgets.

Focus on fleet awareness

All MHE budgeting best practices point toward a single end goal – total fleet awareness. Fleet managers are tasked with reevaluating their current MHE solution for opportunities to reduce spend every year; having complete fleet awareness is the only way to know right away whether you can cut budget or not. Unless you have a dedicated fleet-management team overseeing all your equipment and daily activity – production, utilization, maintenance schedules, etc. – complete visibility is a moonshot for most shippers.

Kenco Fleet Services adds an engineered, consultative approach to MHE solutions, immediately adding high levels of support and confidence to the budgeting process and leveraging built-in resources that continuously and automatically make improvements and recommendations for process optimizations.

Budgeting is all about getting the most bang for your buck, and by implementing the above MHE budgeting best practices, shippers and fleet managers can position themselves to minimize their spend while maximizing their output. To learn more about beginning the process of more accurately and efficiently budgeting for your MHE solution, click here.



We'd like to hear about your supply chain and discuss ways Kenco can help address your business needs.

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Kenco Logistics

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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. 

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