The Case for Telematics. How real-time tracking drives warehouse productivity

Transcription

1 The Case for Telematics How real-time tracking drives warehouse productivity

2 TABLE OF CONTENTS TABLE OF CONTENTS...2 INTRODUCTION...3 LABOR MANAGEMENT...4 FLEET UTILIZATION...5 SAFETY...7 INVENTORY ACCURACY...8 PRODUCTIVITY...9 HOW TOTALTRAX CAN HELP...9 CONCLUSION ABOUT TOTALTRAX P a g e 2

3 INTRODUCTION If you are not in full control of your operation, you are not using telematics. Test your knowledge by trying to answer the following questions: How much time does each operator spend active with load? How many pallets does each operator move per hour? Which operators are more productive than others? Who is the least accident prone? What is the exact position of your forklifts at all times? Do you know with absolute certainty that operators complete the safety checklist prior to operating the equipment? Are your forklifts operating at capacity? Could you answer the questions with confidence? Without real-time insights, you will find yourself challenged to make operational adjustments. Telematics the integration of wireless telecommunications and computers for the purpose of improving business functions turns each member of your fleet into a hub of communication. Equipped with sensors that collect and transmit data in real time on everything from location and impacts to battery usage and driver behavior, your forklift no longer plays a merely supportive role, but serves to drive productivity improvements throughout your operation. As busy as your facility may seem, looks alone are deceiving and wasted time adds up fast. With telematics on your side, you can dramatically improve: Labor management Fleet utilization Forklift safety Inventory accuracy Warehouse productivity This whitepaper will explore each of these aspects in more detail. P a g e 3

4 LABOR MANAGEMENT Consider the following percentages: The operator makes up about 70 percent of the total cost of ownership of any lift truck. The cost of labor for a standard materials handling operation is approximately 70 to 90 percent of operating expenses. The conclusion is obvious: If you want to make a dent in your budget, you need to tackle warehouse labor costs. Even small improvements in labor beats large improvements in other cost areas. And bringing down costs goes hand in hand with increasing warehouse productivity. The key is operational insight into the performance of individual drivers. Simply do not assume that there is nothing you can do to improve upon your lift truck utilization rate. If you want to make a dent in your budget, you need to tackle warehouse labor costs. Even small improvements in labor beat large improvements in other cost areas. The key is operational insight into the performance of individual drivers. Defining labor standards To measure productivity improvements in your warehouse, you need to define and set labor standards as benchmarks. But many operations lack the tools to gain a detailed understanding of how much work can be done in a period of time in order to plan labor by day, shift, job, and zone. You may rely on basic observational data (8-hour shift, 800 pallets moved, 8 trucks = 10 pallets/hour/truck) or use a predetermined time standard that is not only cumbersome and time consuming, but also does not capture what is truly happening in the warehouse. Using a Labor Management System (LMS) can provide enhanced functionality, but although it allows operations to break down steps in very fine detail, it is (1) expensive and (2) relies on humans to measure and input data and (3) only captures a specific period of time. In essence, traditional LMS only track users and scans. Telematics help you plug in the missing piece: the powered equipment data. Receiving undisputable proof For benchmarks grounded in reality, you need real-time visibility, an ability to see work in progress, from speed and location of forklifts to status of forklifts (loaded, unloaded), drivers, and inventory, and much more. You will know who is the most efficient, safe, and productive, and to plan incentivized pay accordingly. Operators themselves can also see the expected time for a specific task and how they compare to their peers. The undisputable proof that telematics solutions provide help you get to the root cause of issues and put you on a solid track to lowering warehouse labor costs. P a g e 4

5 FLEET UTILIZATION You may be surprised to learn it is not uncommon for managers to be unaware of how many lift trucks are being used simultaneously or whether the fleet is really used at capacity. Some simply assume their fleet is being fully utilized throughout the shift and are surprised to discover that is often far from the case. In fact, telematics will frequently reveal that your typical fleet is working at 50 percent or so of capacity. In one extreme, a user who had expressed a need for more lift trucks found out two trucks in his fleet were never being used. That is, needless to say, a costly strategy. The workhorse of your warehouse or DC operations could also be the biggest drain on your bottom line. Given the cost of lift truck ownership, you need fact-based insights to right size your fleet and save thousands if not hundreds of thousands of dollars. A well-run business should never have to rely on assumptions of fleet utilization. The lack of maintenance tracking alone increases the risk of vehicles being sidelined for costly emergency repairs and downtime is one of the biggest productivity killers in the warehouse. The answer is telematics. So how can telematics make an impact when it comes to fleet utilization? Take interleaving, for example. By knowing the real-time movement of each truck, driver, and load with inch accuracy, you can target a real productivity killer in your facility the frequency by which your materials handling vehicles travel without a load. If you identify interleaving opportunities for empty inbound vehicles to pick up loads, you may discover you have more vehicles than you really need. Real-time tracking also automatically collects data, eliminating the need for hand scanning. If your drivers are hand scanning bar codes, they are costing you more money than they should. Hand scanning - although it may take only seconds per pallet - drags down the productivity of your entire fleet. By deploying a telematics solution to automatically collect the data, the need for hand scanning is eliminated. When drivers no longer need to collect data, they are able to move more pallets per hour, leaving you with an opportunity to redeploy labor or cut back on the number of vehicles. COST OF OWNERSHIP A quick look at the cost of running a single lift truck underscores the importance of knowing exactly what each member of your fleet is doing at all times: A $10,000 forklift truck can cost $145,000 a year to operate. Forklift trucks and drivers account for 80 percent of operating expenses. There are more than 40 separate costs associated with a lift truck. Lift truck maintenance ranks second or third behind operational cost with the cost of new batteries ranging from $3,000 to $7,000. P a g e 5

6 To illustrate the point further, take a look at the following image. It shows the battle that many of you face in your operations. The small percentage of green (8-20 percent) signifies when the reach trucks of this particular company are actually doing what is good for the bottom line the rest are essentially productivity killers. In this case, the company was able to use the newfound insights to improve slotting opportunities, eliminate hand scanning and reduce the number of reach trucks from three to two, allowing drivers to be deployed elsewhere in the operation. Six months after the overhaul, the number of pallet moves executed by each reach truck had increased by 86 percent. P a g e 6

7 SAFETY As many as 70 percent of all accidents caused by forklifts are preventable by standardized training and safety procedures, according to OSHA. Yet the epidemic of forklift accidents persists, costing businesses, besides the obvious human suffering, an estimated $135 million a year. The losses are counted in damages to facilities, goods, and equipment as well as reduced productivity. A few years ago, forklift-related accidents topped at 11,000 hours the list of reported lost work time, according to the National Institute of Standards and Technology (NIST). The deployment of telematics, however, has proven, time and time again, to dramatically cut forklift accidents by tackling their underlying causes. One TotalTrax client, for example, reduced impacts by 73 percent in six months and maintenance costs by $32,000, covering the cost of the investment twice over. Telematics in the shape of equipment monitoring will serve to: Stop unauthorized driving The risk of letting an untrained or unauthorized drivers operate your forklifts should not be worth taking. Even of unauthorized driving is strictly prohibited, you cannot prevent someone from making a poor spur-of-the-moment decision to do it anyway unless you have the technological tools to do so. Take the uncertainty out of the equation and apply a telematics solution that prohibits unauthorized driving altogether. Ensure OSHA compliance Electronic Safety Checklists (SCL) ensure regulations compliance, automate the more time consuming paperbased process, and eliminate the risk of human error that otherwise would leave the company vulnerable during an OSHA audit. Unless the checks have been performed, the equipment simply cannot be operated. Automated notifications of checklist failures also serve to highlight safety issues, equipment repairs, and maintenance needs. When there is never a question about expired certifications or lagging upkeep of the forklift fleet, safety consequently improves. With electronic safety checklists, you also get immediate visibility into the safety record of each truck without sifting through boxes of papers, again ensuring you have everything in order for an audit. Drive behavioral change Based on the Hawthorne effect, drivers who know their every turn is being monitored are automatically less likely to make or repeat any mistakes. With real-time impact detection, you know the exact time, location, and operator of every impact, large and small. As managers are notified of incidents in real time, they can enter the floor immediately to speak to the operator rather than waiting until after the shift or even weeks later when the context is long forgotten. Not only is the approach key to fostering behavioral change, drivers also tend to appreciate there is no false blame. Improve asset protection By being able to map all accidents, you can take action to eliminate accident-prone areas and reduce damages to your equipment and facility. The technology also allows you to take a proactive rather than reactive approach to scheduling lift maintenance as facts, not guesswork, will tell you when the equipment should be serviced. P a g e 7

8 INVENTORY ACCURACY An inefficient warehouse will cost your business. For example, a recent UK-based survey of 250 suppliers found that distribution centers lose approximately 3,000 hours every year due to unproductive workflows. That is an average of 15 minutes of productivity lost per worker, per eight-hour shift. Although there can be many different reasons for inefficiencies occurring in a warehouse, some of the main factors include: Misplaced stock Incorrect picking Unexpected stock-outs or back-orders Lost orders Badly planned MHE routing and warehouse layout Misplaced pallets lead to unwanted costs and so does a poorly planned warehouse. Monitoring and measuring the movement of assets, including inventory and forklift trucks, is vital to identifying and then eliminating the source of inefficiencies. You should already be able to track and record every activity and pallet move. However, automating this process dramatically increases the reliability and accuracy of the data that you are gathering, while eliminating the errors associated with manual data collection. When it comes to tracking pallets, there are several sets of data that you need to capture. These include the X, Y and Z coordinates of each forklift truck and pallet location. The X and Y coordinates work much like grid references on a map, showing you the position in two dimensions. They can be determined using the latest TotalTrax optical technology, mounted on each forklift. The Z coordinate is provided by a height sensor fitted to each truck. Monitoring and measuring the movement of assets, including inventory and forklift trucks, is vital to identifying and then eliminating the source of inefficiencies. When these two simple technologies are combined with an automatic bar code reader and integrated load sensor it is possible to establish and record the exact position of every forklift and pallet with almost 100 percent accuracy. The result is far greater warehouse efficiency with real-time monitoring of all assets. In practice, it becomes possible to move every pallet up to 15 seconds faster. Over time, the analysis of the data captured also allows you to rationalize truck movements and plan the most effective locations for fast moving pallets. In a busy warehouse these gains can soon add up to a considerable productivity improvement with a corresponding reduction in operating costs. P a g e 8

9 PRODUCTIVITY As the old adage goes, you can t improve what you can t measure. As the previous sections demonstrate, real-time visibility goes hand in hand with productivity improvements whether it is more effective use of the fleet or reduced forklift impacts. The lack of real-time visibility is the bane of many struggling warehouse operations. By removing the blind spots in your warehouse or distribution center, you create opportunities for productivity growth. HOW TOTALTRAX CAN HELP TotalTrax is the leading provider of vehicle, driver, impact, and inventory tracking technologies. The SX/VX Advanced Telematics Platform launched in 2015 was designed to take advantage of current cloud-hosting technology. The innovative SX200 software, developed specifically for the material handling industry, is at the core of the platform. It enables new safety, productivity, remote diagnostic, and data management functionality in a more intuitive, yet scalable user interface. The modular the design of the VX hardware makes it simpler to install and service and easy to upgrade, delivering the longest useful life in the industry. Developed with an open architecture that is easily upgradeable and evolves with changing needs, the SX/VX platform is also compatible with existing TotalTrax ID, RF and EM equipment monitoring product. The platform includes industry leading data, reporting, and analytic management tools from Logi Analytics so you can extract more value from your operating data. P a g e 9

10 CONCLUSION Telematics gives you the real-time insights that you need to make fact-based decisions to improve every aspect of your operation. The technology has a well-documented track record of increasing productivity by reducing impacts, optimizing fleet utilization, ensuring inventory accuracy, facilitating proactive maintenance, and improving labor management. The undisputable proof that telematics solutions provide help you get to the root cause of issues and put you on a solid track to lowering warehouse costs. P a g e 10

11 ABOUT TOTALTRAX TotalTrax, Inc. is the leading provider of real time vehicle, driver and inventory tracking technologies and fleet management solutions for manufacturing and warehouse operations. Offering a complete technology platform that transforms traditional material handling vehicles into smart trucks, TotalTrax provides solutions that automate data collection and reporting for materials handling operations. With patented hardware, software, reporting and business intelligence tools, TotalTrax delivers substantial value in safety, fleet utilization, labor productivity and inventory accuracy. By automating vehicle usage, maintenance, impacts and lift truck load and location visibility data, customers are able to reduce or eliminate the inaccuracies normally associated with operator input. The resulting business intelligence provides the insight needed to implement immediate improvements resulting in documented productivity gains. Corporate Headquarters 500 Water Street Newport, DE T: F: info@totaltraxinc.com P a g e 11