MATERIAL HANDLING EQUIPMENT

Material Handling Equipment

Material Handling Equipment

Three Signs It's Time To Invest In Your Material Handling Equipment

The "Great Recession" and the precipitous drop in consumer spending were game-changing for the material handling industry. Warehouse and distribution centre managers and purchasing officers were challenged by management to cut spending and operating costs. For many companies, this meant planned material handling equipment (MHE) upgrades were suddenly off the table.

While abandoning a commitment to lifecycle maintenance and upgrade programs offered short-term capital preservation, the unexpected severity and duration of the recession multiplied the impact of these decisions.

Now, DC decision-makers are presented with the choice of continuing to draw out the life of their MHE or investing in new or rebuilt equipment. Three key signs that indicate it is time to invest in your handling equipment include rising maintenance costs, excessive downtime and significant business plan changes (Ashley, 1999).

Trigger 1 : Maintenance Costs Exceed Cost-Per-Units-Shipped Threshold

During the recession life-cycle maintenance budgets were hit hard, with staffing levels slashed, large capital equipment investments delayed, preventative maintenance contracts abandoned and spare parts inventory diminished. Skeleton maintenance crews were forced into a reactionary maintenance mode of emergency repairs (often cannibalizing spare parts from idle equipment), causing low levels of overall equipment readiness and increased vulnerability to failure.

One of the first signs investment in MHE is necessary is when maintenance costs have risen even though programs were cut. Without the parts on hand, rush delivery charges and replacement costs for non-repairable components increase. Overtime hours increase as staff struggle to maintain equipment that likely needed more than a tune-up to continue (Eastop, 2006).

The key indicator for the tipping point that it is time to reassess maintenance scenarios is the cost of downtime versus costs of reinstating a solid maintenance plan.

Trigger 2: Downtime Hurts Productivity And Customer Satisfaction

Lost productivity, reduced customer satisfaction and labour considerations make downtime one of the most dangerous and costly indicators of MHE effectiveness. Downtime can happen for a number of reasons, including improper maintenance, different product mixes, product jams or lack of operator experience.

On the IT side, if a DC has been active for more than even a few years without regular upgrades to software, controls, servers, platforms and hardware, a system can quickly reach the point of obsolescence and failure.

A less obvious consequence to downtime is the cost of customer dissatisfaction and lost business due to late, incorrect and missing orders. Check with sales and MHE teams for an accurate assessment of impact.

Consider the amount of downtime the system is experiencing and find the source of the breakdown. Operational changes or adjustments to the equipment may be a valid solution. However, if a machine is worn and unable to stand up to the volumes required, it may be time to consider upgrades or new equipment (Plenderleith, 1956).

Trigger 3: Changes Force Equipment Obsolescence And System Redundancy

The material handling industry is experiencing large-scale DC consolidations and makeovers. DC managers are faced with the challenge of making do with legacy MHE and systems designed for out-of-date distribution ...