How Understanding Forklift TCO Will Reduce Your Material Handling Costs
Discover how your forklift fleet is really contributing to your material handling costs — and how to reduce them.
- Reduce fuel expenses
- Improve operator productivity
- Increase warehousing efficiency
- Complete the energy solutions questionnaire
- Tyres suited for your applications
- Better utilisation of space
- Reduce material handling costs through fleet management
- Regular vehicle maintenance
If your material handling costs are rising, you’re challenged with making cuts, or you simply want to improve operational efficiency, reducing your forklift spend could be the place to start.
But can you honestly and objectively say how much your forklift fleet is costing? If you’re basing this figure on hardware alone, the real number (or total cost of ownership) might be higher than you think.
Total cost of ownership (TCO) is usually considered when purchasing assets or making investments into capital projects. It can be calculated by taking into account the initial purchase price of machinery and other hardware, as well as any direct and indirect expenses likely to be incurred over a prolonged period of time.
These expenses are often overlooked when calculating costs. But by factoring them into your calculations, you’ll have a much clearer, more accurate idea of how much your forklift fleet is really costing you — and how to reduce those costs.
So what are these indirect expenses, and how can you minimise them?
Reduce fuel expenses
It’s likely that fuel efficiency is one of your business’ top priorities—but are you doing enough to support this? An efficient operation reduces fuel costs and downtime, not to mention your environmental impact, so it’s essential that your operation is well managed.
To improve your operation’s efficiency, our TCO calculator is a great place to start. This web-based application converts information about your equipment into a prediction about your business’ TCO, revealing gaps in efficiencies that could be optimised.
The calculator contains up to date fuel and energy consumption figures, fuel figures, and fuel tank sizes — so there’s no need for you to look this up yourself. The app will also display your local currency type.
In addition to revealing inefficiencies, the TCO calculator can help you identify further gaps in your operation that could be affecting your TCO, for example your use of fuel vs. electric trucks. This excellent visual tool allows you to compare statistics on LPG and electric trucks. From there on, your local dealer can help you choose the right battery for your operation.
The calculator goes into further detail about areas that can affect your TCO, including:
- Charger efficiency
- Battery choice
- Topping frequency
- Water cost
From the app, your local dealer will be able to provide you with a hard copy of your results so that you can start taking steps to reduce your TCO immediately.
With the help of our TCO calculator, together we can identify areas to optimise as well as any efficiency gaps in your operation, before providing innovative and cost effective solutions that suit your business’ needs and budget.
Including a TCO report in your quotation is an integral part of this process.
Improve operator productivity
Although personnel costs can be difficult to control to a certain extent, operators can be trained to be more efficient and therefore more cost effective for your business.
Driver training in areas such as refuelling vehicles correctly, checking the electrolyte levels of a battery, and changing gas bottles and traction batteries can help to reduce operator time spent and in turn improve operator efficiency.
Downtime can contribute a significant percentage towards your TCO, commonly due to drained batteries and operator sickness or injury. However, there are a number of measures you can take to optimise battery charging and operator efficiency. For example, by carrying out regular opportunity charging during tea breaks, this will limit the number of unavailable trucks.
Preventative measures can also be especially beneficial for combating operator sickness or injury. Carrying out regular safety checks and planned maintenance will prevent accidents from occurring and ensure operators remain efficient.
To protect operators’ safety and therefore maintain your operation’s productivity, prevention is ultimately better than cure. With the correct safety measures in place, downtime caused by accident or injury can become a thing of the past.
Increase warehousing efficiency
Warehouse optimisation techniques are equally as essential in maximising productivity, and inventory accuracy is a key aspect of warehouse optimisation. The first step in this process is to check your inventory. Are product areas clearly labelled and easy to find? Do your stock numbers match what’s present in the warehouse? Incorrect figures can result in incorrect sales and unaccounted for revenue loss. Not only does this affect your business, but it damages the customer experience and makes operators’ jobs more difficult.
Tackle your inventory process and tackle most warehouse inefficiencies. An accurate inventory record and a clearly defined, standardised process will significantly improve packing operations for optimum warehouse productivity. By learning how to improve warehouse productivity, there will be no more incomplete orders or time wasted searching for misplaced or lost items.
Standardisation needn’t stop at your inventory. Processes such as loading and unloading can also be standardised to regain lost efficiencies. Defining a centralised location for these processes can also reduce the time it takes to carry out a task, thus boosting productivity.
Use the right engine type
Having the right type of engine for your business’ needs can make or break your operation. If your truck’s engine isn’t well suited to its application, its fuel consumption will be inefficient and expensive to run.
Switching to a more suitable engine has the potential to save you thousands in fuel costs and regain lost efficiencies.
Most significantly, these savings can contribute towards a significant reduction in TCO.
Although the 2040 ban on diesel engines might seem a long way off, it’s worth considering the implications now, especially if your forklift fleet is comprised of mainly diesel or LPG machines.
There are several things you’ll need to consider to make the transition as smooth as possible:
- You’ll need to consider the cost of replacing your existing forklifts when they reach the end of their working lives, or when their lease is up with their electrical counterparts. This is likely to involve a slightly higher initial cost for the machine itself and the charger, however ongoing maintenance costs will be much lower, reducing your TCO.
- Moving from LPG machines will require a rethink of how your operation runs. Time to charge will need to be factored in. Factoring downtime into your operations schedule is also important to ensure you’re working as efficiently as possible to manage your TCO.
- With the additional equipment required, you’ll also need to find space for designated charging stations, which could impact the layout of your warehouse. However, if you’re looking to become more efficient overall, this could actually improve your operations by giving you the opportunity to evaluate and optimise your warehouse structure.
- Electric forklifts tend to perform much better on flat, smooth surfaces, and aren’t so suitable for being used for prolonged periods outside. If your operations are mostly yard based with varying surface materials at different gradients, you may find the battery drains faster. There is also some speculation around how safe an electrical vehicle is when used in wet weather, and forklift manufacturers must take this into consideration before the new regulation is enforced.
All of our engines have been designed to maximise efficiency, and you can speak to us today if you would like to find out about how we can make your forklift fleet more efficient and reduce your TCO.
Ensure vehicles and equipment are fit for purpose
To improve warehouse efficiency, it’s crucial that your forklift trucks and other material handling equipment are fit for purpose.
If the size of your forklifts aren’t suitable for the weight they are transporting, this can create inefficiencies such as a slower operation, not to mention a greater risk of incidents occurring. The cost of forklift accidents can be exponential for businesses, so taking steps to minimise risk is essential.
Ensuring operators have the correct equipment to safely and efficiently carry out their daily duties will not only improve your business’ overall productivity, but save a significant amount of money in the long run.
At TCM, we take the time to fully understand your operation, business goals, and equipment requirements. By learning your business inside out and thoroughly assessing your needs, we can then recommend the most suitable equipment for your environment and application.
Getting your equipment right and in order will save you time, money, and headaches in the long run. We can help to facilitate this. The energy and financial resources saved in the process can then be redirected into your business efforts, paving the way for future growth.
Complete the energy solutions questionnaire
To help your business reduce its TCO, we first recommend completing our energy solutions questionnaire, available through your local dealer.
This will provide real insight into your application’s requirements and identify any gaps in your operation where there are efficiencies to be gained. In particular, we will review your shift patterns to identify optimal charging times.
Paired with an on-site survey carried out by a member of our expert dealer network, we can then recommend appropriate equipment and fleet management solutions to save you time, money, and headaches in the long run.
Our energy solutions questionnaire takes the mystery out of fleet optimisation to ensure we provide a solution that meets your business’ needs, budget and objectives.
Tyres suited for your applications
Forklift tyres can make up around 12%-15% of the total cost of owning a truck, so it’s crucial to ensure your tyres are fit for purpose to guarantee longevity.
No single tyre fits all applications, and each forklift tyre plays a different role in resistance. That’s why it’s essential that you choose the right one for your business’ needs.
We use a variety of tyres for our forklifts, including Xtreme and Magnum tyres. These tyres are extremely resilient and ideal for long runs and medium to high intensity applications. Softer tyres are best for high maneuverability, while harder tyres are more suitable for high-intensity applications that require more resilience.
Your working environment also plays a large part in identifying which tyres are best for your forklift fleet. An indoor environment requires something clean, which typically means a silicone based compound. For outdoor usage, solid rubber tyres are more suitable and used for our counterbalance truck range.
If your wheels aren’t genuine, there’s no guarantee they’re fit for purpose. Poorly fitted or lower quality tyres could cause heat, friction and increased vibration, which can shorten the life span of many component parts. The increased vibration could also cause discomfort to the operator and potential damage to the load, so it’s vital to get this right.
By purchasing forklift tyres directly from one of our local dealers, you can ensure they’re 100% compliant with current regulations. The dealer will manage all tyre applications and fittings with a 3-5 day turnaround, maximising uptime and ensuring your fleet remains efficient.
Better utilisation of space
When identifying ways to improve warehouse efficiency, reducing operator travel time is a key factor in optimising your fleet and ultimately reducing your TCO.
Although having as many racking or palette spaces as possible might seem like an easy way to increase efficiency, in fact the opposite can also be true. Overcrowded areas disrupt the flow of machinery, resulting in a slower operation. When products are not distributed correctly, this also creates inefficiencies.
When operators are forced to search up and down the warehouse for a misplaced item, this makes their pick and replenishment duties slower. By reassessing your warehouse layout and optimising it based on easy accessibility and reduced travel time, your operation will experience drastic improvements in efficiency and a reduction in TCO.
Reduce material handling costs through fleet management
At TCM, we continue to innovate and change as technologies advance. By equipping your business with the latest tools and technologies to improve visibility on the TCO of your operations, your business can reap the benefits of reduced costs, improved safety, and enhanced efficiency firsthand. Harnessing the power of fleet management analytics will have a knock-on effect on your operations, and can reduce expenditure elsewhere in your business.
Since fuel costs are a growing challenge for material handling businesses, we remain committed to assessing each operation to determine whether the types of engines used suit their application. In doing so, we can equip your business with the fleet management solutions necessary to enhance your fleet’s long-term efficiency.
We help you to discover which battery system is right for you. When paired with the Fork Truck Control’s Optafleet advanced fleet management system—available through our nationwide dealer network—businesses can remotely see the state of change, how the battery is performing, batteries available to charge, and when the battery requires maintenance.
In remaining committed to the safety of all operators, we offer a variety of solutions which put this into practice. Being notified about damage remotely using managed fleet services prevents further damage from occurring due to late or even unreported incidents. Not only does impact detection enhance safety in the workplace, but it can significantly reduce accident related costs. Regular forklift training opportunities are another excellent way to ensure operators understand how to operate equipment safely.
The acquisition cost of a forklift is only one factor in the overall cost of ownership. What steps are you taking to reduce fleet management costs?
Regular vehicle maintenance
Regular forklift truck maintenance should be an essential aspect of operations for any material handling business wanting to reduce downtime and improve operator safety.
Equipment can break for a variety of reasons. However, incorrect charging procedures are a common reason for electric trucks to fail. This can be extremely costly for businesses. For this reason, it’s crucial to invest in operator training to ensure there are no gaps in efficiencies that could be creating unnecessary downtime and unforeseen costs (such as common charging mistakes).
Both downtime and accidents—especially those that result in operator injury—contribute significantly towards businesses’ TCO. By getting to grips with regular, scheduled equipment maintenance, your business can make some considerable savings which can then be reallocated for use elsewhere.