August

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

mmh.com

® August 2013

Lift Truck Issue

Braun Corporation:

Mobility in motion 22

Ken Morgel, purchasing and supply chain manager for Braun Corporation

SPECIAL REPORT

Top 20 lift truck suppliers 35 BEST PRACTICES

DSC Logistics’ innovative approach to lift trucks 44 READER SURVEY

Lift trucks are back 54 + Webcast : 2013 Lift Truck User Survey Tuesday, August 27, 2 p.m. ET www.mmh.com/lifttruck13

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September 8 –11 | Park City, Utah www.mhlc.com

UP FRONT

BREAKING NEWS YOU SHOULD KNOW

Pack Expo and Anuga FoodTec organizers announce partnership PMMI, The Association for Packaging & Processing Technologies, which owns and produces the Pack Expo family of trade shows, and Koelnmesse GmbH, organizer of trade fairs including Anuga FoodTec, are joining forces to promote their packaging and processing industry events. “By working with Koelnmesse, PMMI will help our exhibitors and attendees fully realize the possibilities that are available globally,” says Charles

D. Yuska, president and CEO of PMMI. The agreement allows for promotional support and exhibiting at select events for each group. Koelnmesse will add to marketing efforts for PMMI’s Pack Expo International, Pack Expo Las Vegas and Expo Pack México, and PMMI will do the same for Koelnmesse’s Anuga FoodTec, ProSweets Cologne and International FoodTec India. “By exhibiting at each other’s

Power Solutions Intl. announces closing of public offering POWER SOLUTIONS International, a leader in the design, engineering and manufacture of emissions-certified alternative-fuel and conventional power systems, announced the closing of its underwritten public offering of 2,005,000 shares of its common stock at a price to the public of $35 per share. The company sold 1,050,000 shares of common stock, and certain selling stockholders sold 955,000 shares of common stock in the offering, which include 255,000 shares as a result of the full exercise by the underwriters of their over-allotment option. The net proceeds to the company were $34,655,250 before deducting offering expenses payable by the company. The company did not receive any proceeds from the sale of the shares by the selling stockholders.

shows, PMMI and Koelnmesse will support their own events, and more importantly, will provide insight companies considering expansion in North America, Europe and India, need,” says Dietmar Eiden, vice president of trade fair management for Koelnmesse. The agreement will be in place through 2018.

HighJump acquires Evenex HIGHJUMP SOFTWARE has acquired Evenex, a provider of business-to-business integration solutions. Offering more than 25 years of experience in electronic data interchange (EDI) and trading partner connectivity, Evenex enables organizations to optimize trade relations and exchange business documents across the value chain by open and flexible managed cloud services. According to company sources, Evenex is the leading and preferred business-to-business integration provider in Denmark. The companies said that the Evenex trading partner integration solution complements HighJump Software’s existing supply chain application suite which includes warehouse management systems, transportation management systems, route accounting systems, manufacturing execution, mobile sales and EDI solutions. The acquisition of Evenex extends HighJump Software’s EDI capabilities into the EMEA region.

Wynright acquires BoxLogix group WYNRIGHT, a U.S.-based provider of materials handling systems, has acquired the Software and Controls Group of BoxLogix Automation, a Wisconsin-based systems integrator with more than 20 years of experience developing turnkey systems for distribution facilities. The people and assets of the Software and Controls Group will remain in Cincinnati, and BoxLogix will continue to provide mechanical materials handling engineering and design services out of their Prairie mmh.com

du Chien, Wisc., office. The addition is designed to complement Wynright’s current services, increasing the development capacity as well as the speed to markert. The combined group will support the completion of Wynright’s new Wynsoft software suite, which is scheduled to release in early fall. “Well-designed fully integrated software and controls solutions can provide visibility into the entire facility as a single unit, rather than an aggregate of different components,

helping our clients reduce operating expense and maximize the return on their assets,” said Ron Adams, senior vice president, Wynright Software & Controls Solutions.

MODERN MATERIALS HANDLING / A

U G U S T

2013

3

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VOL. 68, NO. 8

®

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

Jim Chamberlain, senior director of industrial engineering and continual improvement at DSC Logistics.

COVER STORY

PHOTO: XXXX XXX

SYSTEM REPORT

22 Mobility in motion With a new fleet of tuggers and carts, the updated storage system at Braun Corporation’s manufacturing facility gets more done in less space.

29 Smart storage and retrieval replaces brawn with brains Manufacturing operations now benefit from a more efficient storage space and tugger-based parts picking.

FEATURES PRODUCTIVITY SOLUTION

32 Narrow aisles double storage capacity, set stage for growth Sovena USA uses new racks and lift trucks to optimize warehouse space. SPECIAL REPORT

35 Top 20 lift truck suppliers After making up for 2009 with two years of strong growth, global sales have tapered off, even as the top suppliers saw revenue increases in the double digits. BEST PRACTICES

44 Lift trucks as materials handling innovators DSC Logistics combined integrated scales and intelligent forks on a lift truck platform to streamline its order verification process. The result was higher customer satisfaction and a two-month ROI. READER SURVEY

54 Lift trucks are back Modern readers tell us how they’re buying, using and maintaining their fleet. SPECIAL SUPPLEMENT

60 BD: Investing in future supply chain leaders mmh.com

Jim Moran Industrial Truck Association (ITA)

DEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern 16/ Lift Truck Tips: Fuel Cells 18/ Packaging Corner: Returnables 68/ Focus On: Ergonomics 73/ Product Showcase 74/ 60 seconds with...

NEWS 9/ Pallet market set to reach 1.3 billion units in 2017 10/ Survey outlines the present and future of the supply chain technician 13/ Congressional Robotics Caucus considers how robots save and create jobs 14/ U.S. business leaders’ optimism reaches highest level since 2005 15/ PSI Engineering announces distribution agreement with LinkxCorporation Modern Materials Handling® (ISSN 0026-8038) is published monthly by Peerless Media, LLC, a Division of EH Publishing, Inc., 111 Speen St, Suite 200, Framingham, MA 01701. Annual subscription rates for non-qualified subscribers: USA $119, Canada $159, Other International $249. Single copies are available for $20.00. Send all subscription inquiries to Modern Materials Handling, 111 Speen Street, Suite 200, Framingham, MA 01701 USA. Periodicals postage paid at Framingham, MA and additional mailing offices. POSTMASTER: Send address changes to: Modern Materials Handling, PO Box 1496 Framingham MA 01701-1496. Reproduction of this magazine in whole or part without written permission of the publisher is prohibited. All rights reserved. ©2013 Peerless Media, LLC.


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THIS MONTH IN ®

EDITORIAL OFFICES

MICHAEL LEVANS

111 Speen Street, Suite 200 Framingham, MA 01701-2000 (800) 375-8015 Michael Levans GROUP EDITORIAL DIRECTOR [email protected] Bob Trebilcock EXECUTIVE EDITOR [email protected] Noël P. Bodenburg EXECUTIVE MANAGING EDITOR [email protected] Josh Bond ASSOCIATE EDITOR [email protected] Sara Pearson Specter EDITOR AT LARGE [email protected] Roberto Michel EDITOR AT LARGE [email protected] Jeff Berman GROUP NEWS EDITOR [email protected] Mike Roach CREATIVE DIRECTOR [email protected] Wendy DelCampo ART DIRECTOR [email protected] Daniel Guidera ILLUSTRATION [email protected] Brian Ceraolo GROUP PUBLISHER [email protected]

PEERLESS MEDIA, LLC www.peerlessmedia.com Kenneth Moyes PRESIDENT AND CEO EH PUBLISHING, INC. Brian Ceraolo PUBLISHER AND PRESIDENT PEERLESS MEDIA, LLC MAGAZINE SUBSCRIPTIONS Start, renew or update your FREE magazine subscription at www.mmh.com/subscribe. Contact customer service at: Web: www.mmh.com/subscribe Email: [email protected] Phone: 1-800-598-6067 Mail: Peerless Media P.O. Box 1496 Framingham, MA 01701 For reprints and permissions, contact The YGS Group at 800-501-9571 x100 or [email protected]. ENEWSLETTER SUBSCRIPTIONS Sign up or manage your FREE eNewsletter subscriptions at www.mmh.com/enewsletters.

MODERN

GROUP EDITORIAL DIRECTOR

Celebrating the lift truck

F

or the third year running, the Modern editorial staff is using a majority of our August pages to celebrate the backbone, the workhorse, the most fundamental piece of equipment to be found in any materials handling operation—yet one that all too often gets taken for granted or run to the point of disintegration: the lift truck. In fact, I don’t think you’ll be able to find a more complete snapshot of the current state of lift truck usage, best practices and technology than the issue of Modern you’re holding in your hands. This comprehensive coverage comes in the form of case studies illustrating how savvy end users are using lift trucks as platforms for technology to improve efficiencies (pages 22 & 44); original research revealing current lift truck buying and management trends (page 54); as well as an overview of the market-leading suppliers and how they’re diversifying their offerings to meet new demands (page 35). Overall, the message in our annual Lift Truck Issue is pretty clear: While the fundamentals of what a lift truck does have stayed relatively unchanged over the years, how they’re being applied through the help of improved management technology and ergonomic design is helping users to streamline operations and greatly enhance the labor management experience for all involved. A perfect example of this is the order verification process that’s been devised by DSC Logistics, a third-party logistics provider (3PL) based in Des Plaines, Ill. In his terrific Best Practices story this month, executive editor Bob Trebilcock walks us through how the 3PL has integrated scales and intelligent forks with software that compares the actual weight of the cases being picked to a pallet against an item master list

in its warehouse management system. The result is a lift truck-based system that reduces or eliminates the labor that was once solely dedicated to quality control at the tail end of the fulfillment process. According to Jim Chamberlain, DSC’s senior director of industrial engineering, it has also drastically cut shipping errors that once fell through the cracks. “The idea was to address errors at the source rather then hope to catch them downstream before they ship,” says Chamberlain. And it’s working on many levels. He says that the solution pays for itself in one to two months when rolled out in a new DSC facility, and overall customer satisfaction is up throughout its entire supply chain because of its success. “You think of a lift truck as a vehicle, or platform, to move something from point A to point B,” says Trebilcock. “At DSC, the lift truck is doing that; but in this instance, it’s also an enabler of another process while it’s stationary. It’s serving as a technology platform to perform a quality control process, and that’s something you don’t typically associate with lift trucks.” While the DSC story illustrates a unique solution at work, our 2013 Lift Truck User Reader Survey offers a 30,000-foot view of current procurement and utilization best practices of U.S. fleet managers. In fact, I’ll be digging into all the findings with associate editor Josh Bond and Industrial Truck Association Chairman Jim Moran in a Webcast that takes place on Tuesday, August 27. “The survey provides a window into the decisions fleet owners are making every day, and helps fleet managers benchmark their operations against some of the best,” says Bond. “From the findings and our discussion, fleet managers will pull out some nuggets to help them improve their operations.” Official Publication of

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Modern Online facebook.com/mmhmagazine Twitter | @modernmhmag Web | mmh.com

SHIPPING PALLETS

Pallet market set to reach 1.3 billion units in 2017 A RECOVERING ECONOMY AND THE RE-SHORING OF MANUFACTURING ARE DRIVING DEMAND. BY BOB TREBILCOCK, EXECUTIVE EDITOR

“SALES OF NEW AND REFURBISHED

pallets will expand by 3.5% a year through 2017 to 1.3 billion units, valued at $16.9 billion.” That was the lead sentence in the recent report on the market for pallets in North America from the Freedonia Group. And, that was just one of the take-aways from the report. A few other important bullet points for pallet users from the report’s executive summary include: • Block pallets are expected to take a larger share of the market as a growing number of manufacturers replace stringer pallets with new block pallets. • Plastic pallets have seen their strongest advances in percentage terms ever and will continue to record above average growth.

mmh.com

• Metal pallets will notch the biggest percentage gains of any of the three most common pallet types (wood, plastic, metal). The caveat is that both metal and plastic pallets represent a relatively small percentage of market share, so the effect on overall pallet sales, even with the increase, will be minimal. Wood pallets, for instance, account for more than 90% of the pallet market in terms of units, with plastic accounting for about 4% and metal accounting for less than 1% of the total number of pallets. Corrugated, molded wood pallets and pallets constructed of other alternative

materials account for the remainder. A variety of factors are driving overall pallet demand, regardless of the type of material, according to Zoe Biller, a Freedonia industry analyst and the author of the report. “You’re seeing a recovering U.S. economy and the larger trend of moving manufacturing capacity back to the U.S. from offshore,” Biller told Modern. “Those are the two most important macro trends.” Biller identified important trends for each of the pallet types. Wood: Although not highlighted in her report, Biller estimates that about 60% of wooden pallets are used and about 40% are new. Those percentages could shift in favor of new pallets going forward. That’s because the industry has been reporting a shortage of quality used pallets, known as cores, for the last year or so. “The


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core shortage appears to be real, and it is going to be part of what’s happening going forward,” Biller said. “But it should correct itself in the long term as end users buy new pallets that replenish the pool.” Nearly two years ago, Costco announced that it was going entirely to a wooden block pallet. Biller believes Costco’s decision is a symptom of the overall trend toward block pallets rather than a driver. “Costco is part of a broader trend toward pallets that are easier to use, especially in an automated system or with pallet jacks,” Biller said. Block pallets fit both of those bills. She added, “There’s also a bigger “You’re seeing a trend to turn products and processes recovering U.S. economy that aren’t a core and the larger trend of business to a third party and pallet manmoving manufacturing agement is definitely capacity back to the U.S. part of that trend.” Plastic: The move from offshore. Those are toward plastic appears to be driven by the two most important companies that can macro trends.” control their pallet pools and take ad— Zoe Biller, Freedonia vantage of plastics’ Group analyst longevity as well as “growing sanitation concerns related to wood pallets,” Biller said. “Food safety regulations may have something to do with it going forward.” Metal: The metal pallet boom is a result of several factors. One is that users stopped buying metal pallets during the recession and got by with existing stocks. Now that the manufacturing economy is picking up, they need more metal pallets to meet demand. What’s more, there are very few metal pallets relative to wood and even plastic pallets. Any pick up in demand will result in a large percentage increase in the number of pallets. Asked if she was surprised by any of the results, Biller said she was surprised by how far the pallet market declined during the recession. “A big part of the market advance is the need to bring the number of pallets available for use to required levels,” she said.

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A U G U S T 2 0 1 3 / MODERN MATERIALS HANDLING

mmh.com

SUPPLY CHAIN

Survey outlines the present and future of the supply chain technician THE DEMAND FOR supply chain technicians, a newly created job title that coincides with increasing automation at warehouses, is expected to increase 30% nationwide in the next 24 months, according to a recent report by the National Center for Supply Chain Technology Education. That 30% increase equates to 61,000 jobs, according to the report “Supply Chain Technicians in the U.S.: Nationwide Employee Survey Results,” which was a first of its kind study that defined supply chain technicians and examined employer hiring preferences for the emerging occupation. “This report really justifies that an entirely new employment sector is emerging and that there is a great need for more workers to fill future jobs in this industry,” George Walters, executive director of the National Center for Supply Chain Technology Education (NCSCTE) told Modern. Walters said many companies that roll out automation projects expect their existing technicians to be able to service the new systems. “These people handle everything from toilets to air conditioning, but the upkeep of new technology is often well outside their skill set. These companies often end up contracting with the installers, but they much prefer to handle things in-house where possible,” he said. There is a shortage of education programs targeted at training skilled supply chain technicians, said Walters, but equally as concerning is the disagreement among supply chain companies about what educational requirements are needed for the supply chain technician occupation. For example, only 17% of businesses require a bachelor’s degree, but 47% require a high school diploma, according to the survey. In addition, the survey found that 18% require a post-secondary certificate and 17% require an associate’s degree. After soliciting members for the skills needed in an effective supply chain technician, the NCSCTE has developed a one-year certificate program consisting of 10 courses. The study found four skills areas that represent the most critical strengths of a supply chain technician, mmh.com


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including operate equipment, maintain equipment, direct maintenance and maintain systems. There is also a software component that Walters said poses a unique challenge to employers. “The question is whether these companies teach software to their existing, more experienced employees who already have mechanical know-how, or train the mechanical aspect to younger workers who might be more comfortable with the software side,” he said. For the study, 624 businesses with warehouses and DCs nationwide were surveyed to identify concentrations of supply chain activity and analyze employment numbers, sales volume, and the most common industries associated with warehouses and distribution centers. Current employment for supply chain technicians is estimated to be 203,000. These technicians oversee a variety of software and equipment related to mechanical, applied electronics, manufacturing, automated systems and information technology. Businesses with the potential for supply chain operations and employment are located in all states, with the largest numbers in California and Texas. California leads the nation with more than 28,000 supply chain businesses, followed by Texas, with about 11,000. Florida and New York, which rank third and fourth, together comprise roughly half as many businesses as California, with just more than 8,000 each. California and Texas are also the largest supply chain employers in the nation, with 3 million and 2 million employees, respectively. Florida, Illinois, Michigan, New York, Ohio, and Pennsylvania follow, employing between 1 million and 1.4 million workers. Among the supply chain related industries identified nationwide retail trade is the largest sector with 40% of all businesses. It is the second largest employer with 8.5 million jobs, comprising 30% of employment. Manufacturing has the second greatest number of establishments (nearly 47,000) and is the second largest employer with 9.2 million jobs. Other large sectors include hospitals (4.5 million employees, 16% of employment) and wholesale trade (3.4 million employees; 12% of employment). To view the report visit: supplychainteched.org/resources/surveyresearch.pdf 12


mmh.com

RIDG-U-RAK ROBOTICS

Congressional Robotics Caucus considers how robots save and create jobs THE CONGRESSIONAL Robotics Caucus held a briefing last month titled “Harnessing New Robotics Technologies for Job Creation.” The Caucus Advisory Committee hosted the briefing in conjunction with Caucus co-chairs congressman Mike Doyle (D-Pa.) and congressman Phil Gingrey (R-Ga.). The session presented a firsthand account of views, opinions and real-world experiences of experts and practitioners in the industry and academia, to demonstrate how robots are contributing to job growth and sustainability of U.S. industries. The Association for Advancing Automation’s (A3) president Jeff Burnstein spoke. “The use of robots and other automation technologies saves and creates jobs in the United States,” said Burnstein. “There are countless examples of innovative American companies who are using automation to become stronger global competitors, saving and creating more jobs while producing higher quality and lower cost products, rather than closing up shop or sending jobs overseas. I’m looking forward to helping to dispel the notion that these transformative technologies are eliminating jobs.” Seegrid’s chief operating officer Mitchell Weiss discussed ways to harness robotic technology for job creation. The overall goal of the event was to make the case that robots are not a threat, said Weiss, who added that he had a favorable overall impression of the meeting. “We got some direct, important questions. It’s pretty clear that people are looking at robots for the obvious things, the defense applications and the manufacturing applications, but I don’t think they have an understanding of where the technology is taking us.” Presentations focused on the impact of robots on manufacturing and service jobs. The discussion included a look at the economics of manufacturing, how robots reduce the impact of costs in areas where the U.S. is less competitive, as well as how robots help the U.S. compete internationally and reshore jobs. The Advisory Committee of the Congressional Robotics Caucus was formed to increase awareness of challenges and issues among members of Congress and policy analysts, as well as educate members of Congress and congressional staff on current and future research and development, and utilization initiatives. mmh.com

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ECONOMY

U.S. business leaders’ optimism reaches highest level since 2005 OPTIMISM FOR the nation’s economic outlook among U.S. business leaders rose to a net balance of 55%

14

in second quarter 2013 from 31% in the previous quarter. This is the highest level recorded since 2005,


according to the latest data from the Grant Thornton International Business Report (IBR), a survey of 3,200 business leaders in 44 countries. In a recent interview with Modern, Dominic King, global research manager for Grant Thornton and head of the IBR, said manufacturing businesses also reported optimism significantly above the U.S. all-business average. “It is surprising to see such confidence given that the economy is still in recovery,” said King. “But aside from a dip in confidence surrounding the fiscal cliff, the overall trend in the United States has been toward growing optimism.” While U.S. businesses are feeling more confident about growth in their operations and the economy, optimism among business leaders in the world’s second largest economy slumped to the lowest level recorded in IBR history. Business optimism in China fell to a net balance of just 4%, down from 25% in first quarter 2013. “China is now shifting from a focus on export to more consumption,” said King. “Still, increased optimism in the U.S. should boost confidence in China, so it will be interesting to see what happens in the next quarter.” Business sentiment also dropped in the other BRIC economies, with business leaders’ confidence in those countries sliding from net 48% in first quarter 2013 to 23%. Eurozone business confidence continues to remain fragile, dropping to net -8% in second quarter 2013, from -2% in first quarter 2013. However, there was an overall improvement in G7 business confidence, with optimism in the United Kingdom climbing from net -1% in first quarter 2013 to 34% in second quarter 2013. Sentiment in Japan turned positive for the first time in IBR history, rising to net 8% from -2%. King said globalization is creating more opportunities for countries mmh.com

such as Germany, which are looking further afield for opportunities given the struggles of neighbors in the Eurozone. But he also noted many economies were looking more closely at their own consumer bases to drive growth. “For instance, the United States is looking at more self sufficiency with shale oil discoveries and the like, which also has an impact on global export activity,” said King. “The financial crisis makes certain economies evaluate where they’re looking for growth opportunities.” The improving U.S. sentiment also extends to U.S. business growth expectations. Net 59% of businesses expect to see revenues climb during the next 12 months, up from 46% in first quarter 2013. A net balance of 48% of business leaders expect profits to grow, up from 42% for the previous three months. Hiring expectations in the United States also remain above the global average with a net balance of 33% of business leaders foreseeing an increase in hiring during the coming year.

operations in which random, single, multiple, loose or grouped goods must be packaged automatically for shipment. It uses standard RSC and any size box can be right-sized in any random order without changeovers, custom corrugated components, hot

melt glue, or dedicated lines. “Reducing package dimensions also mitigates rising transportation costs,” said John Panunto, president of PSI. “With a 30% reduction, seven trucks could ship the same order volume that now requires 10 trucks.” 䡺

PACKAGING

PSI Engineering announces exclusive distribution agreement with LinkxCorporation PSI ENGINEERING recently announced a strategic partnership with the LinkX Corporation to offer e-commerce companies a random packaging fulfillment system to help speed up order fulfillment lines and grow revenues. The agreement gives PSI Engineering exclusive North American rights to market an automated carton sizing technology that solves a critical problem: small items shipped in large cartons. The Optimizer packaging system was designed specifically for e-commerce and online order fulfillment mmh.com

*UHDWQHZV 'RRVDQ¶VOEOE,QWHUQDO&RPEXVWLRQGLHVHOSQHXPDWLF IRUNOLIWV are now ,QWHULP7LHUFRPSOLDQWto meet the EPA’s strict emissions standards. Doosan is committed to improving the environment in which we live and has designed these forklifts to include some of the best, high-tech engines available. These engines cut emissions of nitrous oxides by up to 50% and decrease particulate matter (residual soot) by up to 90%. The advancements made not only provide the operator with a cleaner work place, but also helps rid the environment of toxic emissions. If that’s not enough, Doosan’s Interim Tier IV compliant engines offer improved productivity for superior performance and provide even better fuel ef¿ciency than existing models in their class. Now those are improvements that can really work for you and your business. Find out more about our Interim Tier 4 engines online or search for a quali¿ed Doosan dealer near you at ZZZGRRVDQOLIWFRP. Doosan welcomes the opportunity to work with you. Doosan Industrial Vehicle America Corp.

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Think Doosan. Doosan works.


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LIFT TRUCK TIPS

Fuel cell technology continues growth in materials handling New solutions make inroads one application and lift truck model at a time. By Josh Bond, Associate Editor

T

he perks of using fuel cell battery replacement technology in lift trucks are significant. Battery rooms and battery maintenance can be replaced with productive space and time. Eliminating battery changes, refueling in minutes and consistent power output can boost productivity. And, of course, it’s appealing that water vapor is a fuel cell’s only form of exhaust. Yet, the cost of the infrastructure to support these gains makes fuel cell systems viable primarily for large, multi-shift fleets. The Walmarts, Coca-Colas and BMWs of the world have enjoyed these benefits, but it will still be some time for the single-shift fleet of 25 lift trucks. That said, creators of fuel cell technology are aiming to move in that direction: one lift truck model and application at a time. Modern recently spoke to Gary Schubak, director of sales for Ballard Power Systems, about the evolution of the technology. Ballard is a producer of fuel cell stacks used in fuel cell battery replacement units sold by Plug Power. According to Schubak, the early adoption of fuel cells by high-profile customers has proven both the concept and the hardware. “We have a very good understanding of the life cycle of this technology,” says Schubak. “We’ve got products that have been out in the field for five years and we’re seeing the life cycle and maintenance objectives vetted out.” Schubak says the battery replacement units are designed to last for seven to 10 years, the standard economic life of a lift truck. Currently, they require a refit at the halfway point—about three and a half years—at which time the membranes inside the fuel cell stacks are replaced. “A big focus for us is on the durability of the products. Over time, we hope to eliminate the need for a refit within those seven years.”

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A U G U S T 2 0 1 3 / M O D E R N M AT E R I A L S H A N D L I N G

Fuel cell providers are also looking to push out that seven-year window so that some day a single fuel cell unit might serve the economic life of two lift trucks back to back, Schubak adds. As the life cycle horizon increases, the number of replacement batteries that would have been required is factored into the ROI. In the meantime, new products are chipping away at the applications and lift truck models that can be served by fuel cells. Recently, Plug Power announced the release of product that filled the final gap in fuel cells’s ability to serve Class 1 lift trucks. This can prevent the need for “dual infrastructure” in an application. Similarly, one Class 3 product that was over-specified for lighter duty applications was released in a less costly model that allowed it to penetrate a larger market. “These are examples of how product solutions are evolving into the market and driving increased traction within the materials handling space,” says Schubak. When asked what the future holds, he says one of the larger potential developments remains in the hands of lift truck manufacturers. “If one of them comes out with a purposebuilt fuel cell lift truck, that could be a game changer in this space,” he says. Josh Bond is Modern’s associate editor and can be reached at [email protected] mmh.com

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PACKAGING CORNER

Technology for managing returnable packaging cuts loss, boosts business intelligence Asset management programs, RFID and GPS solutions are helping companies keep track of closed-loop transport packaging. By Sara Pearson Specter, Editor at Large

W

ith an investment in reusable transport packaging—such as plastic trays, containers and pallets—comes the added challenge of keeping track of it all. Even within a closed-loop system (with products or components shipped in returnable packaging from a supplier to a manufacturer, or from a distribution center to a retailer and sent back empty), assets can disappear. To help users better manage their returnable investment, Rehrig Pacific (rehrigpacific.com) has expanded its asset management service offerings. “We offer everything from behavioral usage training—

teaching the associates and truck drivers who handle packaging about its value to the bottom line—to attaching modern sensing technologies for hands-free management,” explains Kaley Parkinson, the company’s national sales manager of supply chain technology services. The evolution of radio-frequency identification (RFID) tags and readers makes the technology a much more cost- and process-effective way to monitor returnable packaging, he says. “Because RFID tracking is at the each level, it gives visibility to what every asset is doing and highlights weak points.” By implementing an asset management program, Parkinson’s customers have seen 30% to 50% reduction in reusable packaging losses in the first year. Plus, there’s an extra benefit beyond loss mitigation, he says. “Reusable transport packaging has a unique place in the supply chain; it’s everywhere. Adding RFID allows it to be leveraged for greater business intelligence,” he explains. “You can tie it to the goods in the containers to improve freshness, reduce shrink and manage personnel because it adds a layer of accountability.” To locate reusable packaging that’s gone AWOL outside of a known loop, Rehrig Pacific applies global positioning system (GPS) technology to a few assets to see where they roam. “We’ve uncovered incidents such as theft to recycle the plastic for money, misuse by another trading partner, confusion by drivers over ownership of similar, unbranded packaging and even misappropriation by a different location within the same company,” says Parkinson. “Using RFID and GPS takes a problem that often comes down to finger pointing and lays clear facts on the table.” Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].

18


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Lift Truck Issue Table of Contents Lift Truck Tips: Fuel cell technology continues growth in materials handling 16 Braun Corp.: Mobility in motion . . . . . . 22 Smart storage and retrieval replaces brawn with brains. . . . . . . . . . . . . . . . . . 29 Narrow aisles double storage capacity, set stage for growth. . . . . . . . 32 Top 20 lift truck suppliers . . . . . . . . . . . 35 Lift trucks as materials handling innovators . . . . . . . . . . . . . . . . 44 2013 Lift Truck User Survey: Lift trucks are back . . . . . . . . . . . . . . . . . 54 60 seconds with Jim Moran, ITA . . . . . . 74

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U G U S T

2013

21

MODERN system report

Braun Corp:

Mobility in motion With a new fleet of tuggers and carts, the updated storage system at Braun Corporation’s manufacturing facility gets more done in less space. By Josh Bond, Associate Editor

I

nside the Winimac, Ind., manufacturing facility for Braun Corporation, there is a real connection between the workers and the work. As makers of wheelchair- and scooter-accessible vans and lifts, the facility’s 250 employees recognize they are providing goods that improve the lives of their customers. Workers are regularly reminded of this fact because the company’s founder, the late Ralph Braun, was the very first customer. Under Braun’s guidance, the company grew rapidly, but the manufacturing facility’s material flow and assembly processes started to strain under the weight of incoming orders. Undisciplined storage practices and the habit of physically carrying parts to and from the line were cutting into productivity, crowding the storage area and testing workers’ stamina. In 2010, the company launched a project to streamline the 200,000-square-foot facility. Concepts such as 5S (sort, straighten, sweep, standardize, sustain) were introduced to streamline storage and delivery processes to the line. “Until then, things were changing so fast they were never

22

able to stop and re-evaluate anything,” says Ken Morgel, purchasing and supply chain manager for Braun Corporation, who joined the company at the start of the project. Over the course of the project, tuggers and cart trains (tugger: Columbia Par-Car; carts: Creform, Topper, Braun Corporation) replaced one-off trips to storage for items carried by hand, reducing traffic in and around the warehouse area. Smart slotting replaced the hunt for lost items in storage. By the end of the project, nearly one third of the 34,000-square-foot storage space was handed over to manufacturing for an expanded assembly line, and 17% of warehouse workers had been redeployed to more value-added areas. “The warehouse area is now an enabler for manufacturing to improve,” says Morgel. “We’re not a liability, and my main focus is to stay off the radar. I don’t want to be the issue holding up production.” For the customer, by the customer Before Braun Corporation was founded in 1972,


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Ken Morgel, purchasing and supply chain manager for Braun Corporation, helped transition more than 10,000 square feet of storage space into productive manufacturing space. Above: The storage space behind the new expanded manufacturing line is a third of its former size, yet is more efficient than ever. GraphicCaption Feature

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Photos by Peter Wynn Thompson/Getty Images


U G U S T

2013

23


Ralph Braun designed and built his own powered three-wheeled scooter in the 1960s. Driven by his need for mobility, Braun used the scooter for his daily commute in Winimac, his hometown. When he changed jobs and that commute lengthened, he simply modified a postal van by adding a ramp to accommodate his scooter. Word of mouth spread the news and Braun Corporation ultimately developed a line of scooters, wheelchair lifts and conversion vans. The company saw rapid growth in the 1990s when two forces converged. The passage of the Americans with Disabilities Act created standards for accessibility in employment, public transportation and other public accommodations. At the same time, the minivan as we know it became immensely popular. These days, the company’s continued growth is attributable to a growing customer base of veterans and aging baby boomers. As his company grew from one employee to 800, Braun worked to stay personally involved. “I was incredibly inspired by Ralph,” says Morgel. “He was here practically every day, out talking to folks on the floor. By seeing what we do and who we help, at the end of the day I know I’m putting something good into the world.” This feeling was shared by many of the assemblers in the facility, who put their share of elbow grease to use as the company expanded. A strong work ethic, however, was not enough to overcome the increasingly evident shortcomings of the facility layout and the flow of parts to the line. In addressing these problems, the company’s 2010 lean project had three major objectives: 1. Reduce or eliminate the need for line workers to retrieve their own parts from the warehouse space, carrying them over their shoulders or manually pushing heavy loaded carts. 2. Improve storage efficiency in a random-location warehouse with no first-in, first-out (FIFO) capabilities. 3. Increase the use of reusable con-

24

Minimizing product damage, customized storage containers can be safely moved and stored by forklifts before carts and tuggers deliver their contents to the manufacturing line.

tainers and negotiate in-sequence parts from suppliers. Morgel teamed up with materials handling supervisor Tim Kasten and materials manager Ben Hitchens to tackle these problems one at a time. Increasing storage accessibility When the warehouse project began, a lean initiative was already underway in the nearby manufacturing space. This provided a clear goal in terms of layout. In fact, the 34,000-square-foot warehouse space would need to be reduced by 10,000 square feet to make room for an expanded manufacturing line. “The first step was housecleaning, in line with the 5S methodology,” says Morgel. “We finally started looking


at stuff we had been tripping over for a long time.” Morgel and his team set about segregating productive inventory from non-productive inventory, such as maintenance, repair and operations (MRO) supplies. “Both were in the same warehouse, even though they flow completely differently,” says Morgel. “We never knew who was going through the most gloves, weld-wire or helmets. The overhead was spread across all workers evenly.” The MRO inventory was segregated to free up space, and scanners were deployed so that when someone asked for another helmet it was attributed directly to that person. Morgel says, “There was probably a six-figure savings, just because of that

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visibility and the new report-running capabilities.” The existing storage system loosely tracked parts locations in a dynamic storage setup with random putaway into cantilever racking, a mezzanine, floor storage and pallet rack. “It was haphazard,” says Morgel. “There wasn’t a defined standard on how we needed to store anything.” The accuracy of the storage was driven mainly by the integrity and discipline of individual employees. One big change with the new system is the creation of dedicated storage for fast-movers. “We realized we had slowmoving inventory in our pallet racking and on the floor, and we had fast-movers up on the mezzanine, which was hard to access,” says Morgel. “We did a fundamental, ‘Storage 101’ slotting. Slow movers went in reserve, fast-movers in front.” In addition to adding 2 feet of height to each aisle, aisle widths were also

More parts are now delivered to workers just in time, moving from receiving directly to the line.

standardized from roughly 12 feet to a consistent 10 feet. Rack bridges in the middle of each aisle were removed,

increasing storage density and reducing the number of blind turns for lift truck operators.

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Partners in success With storage methodologies updated, it was time to look at how parts moved in and out of the new system. On the inbound side, Morgel and his team approached their largest parts supplier, a fabrication shop across the street. “We pushed back to them to request items be containerized so we could make better use of space in the warehouse,” says Morgel. “We asked, ‘If we give you bins and tell you what we need in them, can you do it?’” The supplier agreed, and a series of A, B, and C-sized reusable totes were rolled out. The tote sizes were based on ergonomic weight limits for lifting. They housed both loose parts and an increasing number of kitted in-sequence parts. Labels were applied to totes that could then be scanned to signal a replenishment or next order. “That helped the other thing we weren’t doing well, which is FIFO,” says Morgel. “Now, we put totes on

gravity fed racks and load from the back and pick from the front.” The streamlined product flow enabled an increase in items delivered to the line just in time. Once a sequence had been defined, Morgel and his team worked with suppliers to receive parts in order. Large, unwieldy and expensive plastic parts were the hardest to store and handle, so Morgel requested they be painted in sequence and put into a cell pack. “One day’s worth comes on a truck and is delivered directly to the line, just in time and in the sequence they will be used on the line,” he says. “We have greatly reduced the amount of storage needed for those items, while reducing damage resulting from handling and storing.” Morgel estimates they have reduced inventory of painted exterior plastics by at least $100,000. Inventory of interior plastics has been cut by “easily double or triple that,” he says.

Powered mobility The final step involved the retrieval of parts from storage and their delivery to the line. “There were instances where people at the manufacturing line would write down in a notepad all the things they needed from the warehouse,” says Morgel. “They’d go get as many as they could carry, bring them to the line, then go back for more.” The small number of carts in use had to be pushed manually. “Since we didn’t have cut-throughs in the line,” says Morgel, “they would have to push carts all the way down and all the way back to where they had just been. I saw some of the things the materials handling guys were expected to do and it did not look very pleasant.” If parts weren’t manually carried, or pushed on a heavily loaded cart, they were delivered lineside by a forklift, creating too much combined pedestrian and equipment traffic. “We knew

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we needed to restrict and minimize forklift movement on the manufacturing floor,” says Morgel. “We also wanted to eliminate the inefficient and unsafe manual tote movement, where associates often carried items hundreds of feet.” The solution involved a fleet of four tuggers and carts to satisfy the majority of parts movement between the warehouse and the line. “It was as easy as that. By combining several trips into one it reduces the number of people

needed, reduces the number of trips, and keeps people out of the aisles.” Three of the 17 materials handlers were redeployed to value-added areas, including one who became the dedicated manager of the tool crib and new MRO space. Each tugger has a three-cart limit, and each cart typically has one day’s worth of production loaded onto it. The new fleet of carts is modified to reduce parts damage by keeping them separate. Andrew Roberts, the

Smart storage and retrieval replaces brawn with brains

manufacturing engineering manager, also helped with a redesign of the manufacturing lineside display to facilitate cart movements and part retrieval for assemblers. The facility now operates more smoothly with one less forklift. “The carts shorten walk times, address ergonomic issues at the line, and allowed us to reduce our forklift fleet from five to four,” says Morgel. “It created less traffic and a safer environment throughout the facility.”

The Braun Corp. Winamac, Ind. FACILITY SIZE: 200,000 square feet PRODUCTS: Manufacture wheelchair-accessible minivans

Manufacturing operations now benefit from a more efficient storage space and tuggerbased parts picking.

THROUGHPUT: 25 vehicles/day SHIFTS: one shift, five days a week EMPLOYEES: 250

T

hanks to improved storage and the use of tuggers and carts, Braun Corporation was able to redeploy warehouse associates, reduce needed storage space, slash inventory and improve safety. Receiving: Upon arrival, inbound shipments Mezzanine for slow movers storage 4

Receiving 1 Fast movers storage

5 Picking and cart storage

under mezzanine

3

Manufacturing lines 2

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U G U S T

2013

29

HEAVY ON


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are assigned to one of three dock doors in the receiving area (1). Roughly 90% of incoming shipments are lessthan-truckload (LTL). In the receiving area, associates pull the packing lists, unload the truck and manually key incoming parts into the system. Just-in-time deliveries are briefly staged before being delivered directly to the manufacturing line (2). Storage: The system does not direct putaway from receiving, but there are specific storage locations for specific types of product. Fast movers are directed to rack and carton flow storage (3) closer to the assembly line. Slow movers are directed to reserve storage (4) on the mezzanine. During putaway, items and locations are scanned and become available in the system for use on the line. Picking: Picking is achieved in a number of ways. Some pick lists are generated from a spreadsheet based on demand. This is generally for low-volume, high-mix components. Some picking involves standard bin sizes filled with product in multiples of the current run rate. For example, if the line is running at 16 units per day, and a part is one per unit, then an associate will pull 16 to a bin at a time. Pickers push a single cart at a time and pick primarily to a cart filled with bins. The cart travels with operator through the warehouse until full, when it is manually deposited in sequence at the cart staging area (5). When directed by the system, a tugger operator will connect to a train of three full carts. The operator will drops off an entire cart at the right station at the line. Assemblers either work from the cart or remove bins and work from them. Empty bins are returned to the cart, and when the entire cart is empty the tugger operator will remove three at a time from the line to return them to the staging area. The tugger will only ever pick up an entirely full or entirely empty cart. 䡺

System suppliers SYSTEM INTEGRATOR: Braun Corporation, braunability.com TUGGER: Columbia Par-Car, parcar.com CARTS: Creform, creform.com; Topper Industrial, topperindustrial. com; in-house PALLET RACK: Ridg-u-Rak, ridgurak.com LIFT TRUCKS: The Raymond Corp., raymondcorp.com MOBILE COMPUTERS: Glacier Computer, glaciercomputer.com HANDHELD SCANNERS: Intermec, intermec.com

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MODERN productivity solution By Josh Bond, Associate Editor

Narrow aisles double storage capacity, set stage for growth Sovena USA uses new racks and lift trucks to optimize warehouse space.

S

ovena USA, a Rome, N.Y., bottler and distributor of imported olive oils, recently discovered its growth was exceeding the space available in its 185,000-square-foot facility. Unable to stage orders and forced to bulk store product, Sovena faced a decision to either expand the company’s current space or use the existing warehouse more efficiently. By deploying new very

narrow aisle (VNA) racking (Frazier Industrial, frazier.com) and a fleet of VNA lift trucks (The Raymond Corp., raymondcorp.com) the company was able to double storage locations in the same footprint. In 2008, Sovena had a record year, outselling the forecast by 20%, and 2009 was following the same pattern. As a result of this growth, operators

were forced to bulk store product and double stack skids, which led to product damage. It was important for the company to come up with a solution that would provide relief from the existing space issues while accommodating a growth rate of 10% to 15% over the next three to five years. Sovena realized it had all of its fast-moving lift trucks on the far

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right side of the warehouse so the traffic was inefficiently going from the docks to the right and from production to the left. Additionally, it had many aisles filled with product for staging, and it was simply running out of room. The company’s lift truck supplier suggested a fleet of VNA swing-reach trucks with a pallet flow solution that would service about 15,000 pallet positions. All existing rack was removed and replaced with push-back racks. By doubling the number of storage locations in the same footprint, the plan saved Sovena nearly $5 million in construction costs, and the 13-week installation schedule allowed operations to continue during the transition. “What the reclassification of the warehouse did was help us to put like products together and eliminate space constraints, which we were never able to do before,” says Jeff Leclau, warehouse manager at Sovena. “These changes have increased our efficiency tremendously.” Today, operators pick orders 24 hours in advance and stage them before they are audited and loaded for distribution— a simple convenience they were never able to do prior to the remodel. The company also was able to project a return on its initial investment within 3.75 years. 䡺

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MODERN special report

20

Top

Lift truck suppliers After making up for 2009 with two years of strong growth, global sales have tapered off, even as the top suppliers saw revenue increases in the double digits. By Josh Bond, Associate Editor

T

he dust has settled. Following two years of very strong growth in lift truck sales, shipments leveled off in 2012. With growth at just a fraction of a percent, worldwide sales didn’t match the 27% growth in 2011 or the 32% growth in 2010. Of course, those years came on the heels of a 39% contraction, and many in the industry remain excited to see growth of any kind, however small. Jim Moran, chairman of the Industrial Truck Association (ITA)

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M O D E R N M AT E R I A L S H A N D L I N G / A

U G U S T

2013

35

Top 20 industrial lift truck suppliers Rank

Company

2011 Rank

2011 Revenue

2012 Revenue*

North American brands

1

Toyota Industries Corp.

1

$5.9 billion

$6.877 billion

Toyota, Raymond

2

Kion Group

2

$5.6 billion

$6.25 billion

Linde

3

Jungheinrich AG

3

$2.738 billion

$2.864 billion

Sold in NA by MCFA

4

Hyster-Yale Materials Handling

4

$2.5 billion

$2.469 billion

Hyster, Yale

5

Crown Equipment Corp.

5

$2.1 billion

$2.2 billion

Crown, Hamech

6

UniCarriers Americas Corp.

8

$1 billion

$1.9 billion

Nissan, TCM, Barrett, Atlet, UniCarriers

7

Komatsu Utility Co.

7

$1.1 billion

$1.4 billion

Komatsu, Tusk

8

Mitsubishi Caterpillar Forklift

6

$1.464 billion

$1.355 billion

Mitsubishi, CAT, Jungheinrich (NA only)

9

Anhui Forklift Truck Group Corp.

8

$1.01 billion

$976 million

Heli

10

Nippon Yusoki Co.

10

$879 million

$962 million

Not available in North America

11

Hangcha Group Co.

14

$860 million

$831 million

HC, Hangcha

12

Clark Material Handling

12

$677 million

$681 million

Clark

13

Doosan Industrial Vehicle

13

$532 million

$650 million

Doosan

14

Hyundai Heavy Industries

15

$321 million

$442 million

Hyundai

15

Tailift

16

$152 million

$166 million**

Tailift, World-Lift

16

Combilift

17

$125 million

$144 million

Combilift

17

Hubtex

18

$91 million

$99 million**

Hubtex

18

Hytsu

$69 million***

$75 million**

Hytsu

19

Godrej & Boyce Manufacturing

19

$64 million

$70 million**

Not available in North America

20

Paletrans Equipment

20

$58 million

$63 million**

Paletrans

N/A

*Fiscal year 2012 worldwide sales revenue - Figure based on foreign exchanges rates as of 12/31/12 **Figure based on industry estimate ***2010 revenues

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38

A

U G U S T

2 0 1 3 / M O D E R N M AT E R I A L S H A N D L I N G

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SOLUTIONS


and former senior vice president of Crown Equipment, is among them. According to Moran, the growth might be smaller, but it’s more stable as a result of more intelligent practices on the part of both lift truck manufacturers and their customers. Procuring, utilizing and replacing a piece of equipment means something different than it did just a few years ago. “Large fleet owners have modified their replenishment cycles,” says Moran, “They just aren’t replacing their lift trucks in the same time frame they were. They’ve discovered, probably, that they can get away with that as long as they’re keeping an eye on maintenance costs and utilization. We’re on a slower but more sustainable curve instead of having a great year, then a slow year, and then falling behind.” The worldwide picture looks to have reached a plateau, but news is good for this year’s Top 20 lift truck suppliers. Of those who reported their revenues to Modern, only three saw year-over-year decreases. These small, roughly 3% reductions could simply be due to currency conversion rates. As a whole, however, the Top 20 bested last year’s $27.2 billion in revenues by $3.2 billion dollars—an 11.8% increase, breaking the $30 billion mark by nearly half a billion dollars, and coming in around $30.4 billion.

Growth by region The Worldwide Industrial Truck Statistics (WITS) organization tracks quarterly and monthly statistics on lift truck sales, and is compiled by six trade groups based in North America, Brazil, Japan, Korea, Europe and China. According to the 2012 WITS figures, global orders fell by slightly more than 3% in 2012, from 974,582 units to 944,405 units. Shipments crept up 0.2%, finishing at 943,724. Highlights of the WITS figures include: • After posting the lowest growth rates in 2011, Africa now boasts the strongest growth, with a near 15% improvement in orders and shipments. Nearly 20,000 units were shipped to African countries in 2012. • In Oceania (Australia and nearby islands), shipments were also up more than 15%, with 22,297 units shipped. • The next strongest growth was in the Americas, where a 6% increase in shipments saw about 220,000 units shipped. According to figures from the ITA, nearly 180,000 of those are United States sales, as compared to

Worldwide lift truck market Orders Region

2011

Europe (53 countries/territories)

330,616

Shipments

2012

% Increase

310,503

-6.08%

2011 324,073

2012

% Increase

317,726

-1.96%

Americas (55 countries/territories)

224,733

229,746

2.23%

207,485

220,069

6.07%

Asia (43 countries/territories)

379,969

362,911

-4.42%

373,697

363,816

-2.64%

Africa (56 countries/territories)

17,587

20,185

14.77%

17,194

19,816

15.25%

Oceania (29 countries/territories)

21,677

21,060

-2.85%

19,359

22,297

15.18%

Total (236 countries/territories)

974,582

944,405

-3.10%

941,808

943,724

0.20%

Source: These figures are provided by the World Industrial Truck Statistics (WITS) organization.

ITA’s lift truck classifications Class 1, Lift Code - 1





Counterbalanced Rider Type, Stand Up

Three Wheel Electric Trucks, Sit Down

Counterbalanced Rider, Cushion Tires, Sit Down

Counterbalanced Rider, Pneumatic or Either Type Tire, Sit Down

High Lift Straddle

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A

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World headquarters

ITA class of trucks manufactured Class 1

Class 2

Class 3

Class 4

Class 5

Aichi, Japan

x

x

x

x

x

Wiesbaden, Germany

x

x

x

x

x

Hamburg, Germany

x

x

x

Cleveland, Ohio

x

x

x

x

x

New Bremen, Ohio

x

x

x

x

x

Tokyo, Japan

x

x

x

x

x

Tokyo, Japan

x

x

x

x

x

Sagamihara, Japan

x

x

x

x

x

Hefei, Anhui, China

x

x

x

x

x

Kyoto, Japan

x

x

x

Hangzhou, China

x

x

x

x

x

Seoul, South Korea

x

x

x

x

x

Seoul, South Korea

x

x

x

x

x

Ulsan, South Korea

x

x

x

x

Taichung, Taiwan

x

x

x

Monaghan, Ireland

x x

x

x

x

Fulda, Germany

x

x

x

x

x

Shanghai, China

x

x

x

x

x

Mumbai, India

x

x

x

x

x

x

x

Cravinhos, Brazil






Low Lift Walkie Pallet

Tractors (Draw Bar Pull Under 999 lbs.)

Low Lift Walkie/Center Control

Reach Type Outrigger

High Lift Straddle

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M O D E R N M AT E R I A L S H A N D L I N G / A

U G U S T

2013

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166,000 units in 2011. • Asia saw a slight decline in orders (-4.4%) and shipments (-2.6%), but still shipped 363,816 units, or 39% of global shipments. • Europe’s orders fell 6%, with shipments down 2%, for a total of 317,726 units shipped. The Top 10 With revenues up 16.6%, Toyota Industries Corporation once again claimed the No. 1 spot, staying ahead of Kion Group. Toyota’s $6.88 billion is $620 million more than Kion’s $6.25 billion, with the leader’s revenues 10% larger than the challenger’s. In 2011, Toyota was 5% ahead of Kion, which grew by nearly three quarters of a billion dollars between 2011 and 2012. The rest in the top five are familiar faces. Jungheinrich again ranks third with 4.6% growth to $2.86 billion. Hyster-Yale Materials Handling (which previously reported as NACCO Industries; NACCO’s materials handling business was spun off in mid-2012) held fourth despite a roughly 1% drop in revenues for a total of $2.47 billion. Appearing again in fifth is Crown Equipment with 4.8% growth to $2.2 billion. In sixth place is UniCarriers, the result of a merger between last year’s eighth-place finisher, Nissan Forklift, and last year’s 11th-place finisher, TCM. Combined, the companies’ individual revenues in 2011 were $1.75 billion. The new entity sits at about 8.6% above that, with 2012 revenues of $1.9 billion. In seventh place for the fourth year running is Komatsu, which posted $1.4 billion for 27% growth, the largest growth percentage on the list. Dropping two ranks to eighth place, Mitsubishi Caterpillar Forklift (MCF) reported $1.355 billion in 2012 revenues, down 7% from last year. In June of

2012, the company restructured its forklift production, with plans to transfer production of small- and medium-sized forklifts from Japan to facilities in China and Houston, Texas, by the end of 2013. The move was intended to bring production closer to target markets. After launching a number of new products, in November of 2012 Mitsubishi Heavy Industries (MCF’s parent company) announced plans to merge its forklift business with that of last year’s 10th place finisher, Nippon Yusoki, by April 2013. Representatives for the new entity, Mitsubishi Nichiyu Forklift Co., Ltd., confirm they intend to report jointly next year. Holding steady in 2012 with $976 million in revenues, No. 9 Anhui Forklift, the Chinese makers of Heli forklifts, fell slightly off the $1 billion in revenues it has posted in the previous two years, for a drop of 3.4%. Rounding out the Top 10 is Mitsubishi Nichiyu Forklift, which reported last year as Nippon Yusoki Company. With $962 million in revenues, the company saw more than 9% growth. Breaking down the Top 20 The TCM/Nissan merger has shaken things up for the top half of the list. By next year, it could take more than $1 billion in revenue to crack the Top 10. Combined, the Top 10 companies collected more than $27 billion in revenues in 2012, just $126 million less than the entire Top 20 list of 2011. In that year, the Top 10 accounted for about $24 billion, meaning the top half of the list has grown by almost 13%. The Top 5, all of which are the same companies as last year, have fared well, growing by a combined $1.86





High Lift Counterbalanced

Low Lift Walkie/Rider Pallet

Fork, Counterbalanced (Cushion Tire)

Fork, Counterbalanced (Pneumatic Tire)

mmh.com

M O D E R N M AT E R I A L S H A N D L I N G /

A

U G U S T

2013

40

T IPLY


billion, or nearly 10%. For the lower half of the list, companies ranked 11 through 20 gained a combined $272 million in revenues, a 9% increase. Trends to watch Moran says the lift truck is increasingly becoming a platform for technologies that enable better processes and better productivity. “What people are looking for now is technology for efficiencies beyond the truck, beyond incremental improvements in truck performance like lowering a little faster or traveling a little faster,” he says. “Customers are looking for add-ons that can make their workforce better and more efficient.” Moran says automation and efficiencies are becoming more popular among those making lift trucks and those buying them. “There’s a lot of conversation around driverless lift trucks, if not a lot of business,” he says. “All of that is still developing. It’s too early to realize how the warehouse would have to change if its lift trucks were driverless. There are infrastructure, safety, security and support concerns, and it’s too early to know.” Last year, Moran noted an increased interest in green and sustainable objectives with regard to using and powering lift trucks. “The green initiative is kind of a given now,” he says. “You have to be focused on it and be able to communicate that the initiatives make good business sense.” In the year to come, Moran says he will be watching the initial public offering (IPO) of Kion. “Many are interested in what the Chinese influence on that company might be down the road,” he says. “That could impact the North American market as they add products.” With regard to the economy, Moran says industry growth will continue at a similarly slow rate as the overall economy. “That said, we’re rapidly approaching the point where we can be slightly more optimistic rather than maintaining this cautious optimism,” he adds. How the suppliers are ranked To be eligible for Modern’s annual Top 20 lift truck suppliers ranking, companies must manufacture and sell lift trucks in at least one of the Industrial Truck

42

A

U G U S T


Association’s seven truck classes: electric motor rider; electric motor hand trucks; internal combustion engine; pneumatic tire; electric and internal combustion engine tow tractors; and rough terrain lift trucks. Rankings are based on worldwide revenue from powered industrial trucks during each company’s most recent fiscal year. Revenue figures submitted in foreign currency are calculated using the Dec. 31, 2012 exchange rate. ITA’s lift truck classes The Industrial Truck Association has defined seven classes of lift trucks, or forklifts, which are defined by the type of engine, work environment, operator position and equipment characteristics. Forklift classes include: • Class 1: electric motor trucks with cushion or pneumatic tires • Class 2: electric motor narrow aisle trucks with solid tires • Class 3: electric hand trucks or hand/rider trucks with solid tires • Class 4: internal combustion engine sit down rider forklifts with cushion tires, suitable for indoor use on hard surfaces • Class 5: internal combustion engine sit down rider forklifts with pneumatic tires, suitable for outdoor use on rough surfaces • Class 6: electric or internal combustion engine powered, rider units with the ability to tow (rather than lift) at least 1,000 pounds • Class 7: almost exclusively powered by diesel engines with pneumatic tires, these units are suitable for rough terrain and used outdoors. Since primarily classes one through five are used in materials handling applications inside the four walls, Modern has only specified those on our supplier table. 䡺

mmh.com

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MODERN best practices

Lift trucks as materials handling innovators

I

If you’ve spent any time in the materials handling industry, it’s hard not to fall in love with automation. Still, some great ideas are so simple, yet so effective, that in retrospect you wonder: Why didn’t I think of that? The order verification process devised by DSC Logistics, a third-party logistics provider headquartered in Des Plaines, Ill., is an example. Dubbed Accu-Pick, DSC refers to the process as a forklift integrated accuracy system. It uses common, proven technologies found in many distribution centers to provide real-time verification of an order as it is being picked. Those include integrated scales (Ravas USA, usa.ravas.com) and intelligent lift truck forks (Cascade, cascorp.com/americas/ en) installed on a lift truck platform (Crown Equipment Corp., crown.com).

Jim Chamberlain, senior director of industrial engineering and continual improvement, DSC Logistics.

44


mmh.com

DSC Logistics combined integrated scales and intelligent forks on a lift truck platform to streamline its order verification process. The result was higher customer satisfaction and a two-month ROI. By Bob Trebilcock, Executive Editor

mmh.com

ity control. Customer satisfaction is up throughout the supply chain.” Chamberlain adds that the solution pays for itself in one to two months when it’s rolled out in new DSC facilities. Continuous innovation Chamberlain thinks of this solution as an example of continual improvement. It might also be thought of as continuous innovation. “Our customers are continually demanding that we come up with innovative solutions that drive cost out of our system,” Chamberlain says. DSC has embraced the philosophy of continuous improvement since its inception in 1960 with one facility on the south side of Chicago. Since then, it has grown into a nationwide provider of supply chain management solutions and consultation services that range from distribution to transportation and network design. Still family-owned, the company currently manages more than 40 facilities and 18 million square feet of space around the country. The average DC is between 400,000 and

500,000 square feet and handles 1,200 SKUs. The company serves a variety of industry verticals, including food distribution, consumer packaged goods, health care, electronics and tobacco. Prior to implementing the new processes, most orders consisted of mixed cases picked to pallets. Orders were verified downstream by checkers prior to shipping to ensure that order selectors had done their jobs accurately. That was a non-value added step that rubbed Chamberlain the wrong way. For one, the system may have caught some errors before they went out the door, but it didn’t address the root cause of why pickers were making mistakes in the first place. For another, the checkers didn’t catch everything. Dealing with returns and credits was costly and resulted in unhappy customers. In late 2010, Chamberlain discussed a new idea with Jerry Dolak, DSC’s vice president of operations, at the company holiday party. “We realized there could be some real savings if this process worked,” Chamberlain says.


U G U S T

2013

45

Photos by Jean Marc Giboux/AP Images

The solution is knitted together with software that compares the actual weight of the cases being picked to a pallet against an item master list in DSC’s proprietary warehouse management system (WMS). The master list indicates how much cases should weigh based on their weight when they were first received in the facility. When there is a mismatch between the two numbers, the associate doing the picking is asked to verify the picks. When that fails, a supervisor is called in to investigate. Ultimately, the system reduces or eliminates the labor once dedicated to quality control at the end of the fulfillment process as well as shipping errors that slipped through the QC cracks. “The idea was to address errors at the source rather than hope you catch them downstream before they ship,” says Jim Chamberlain, senior director of industrial engineering and continual improvement. “Since going live in our first facility in February 2012, we’ve seen reduced errors related to picking and a reduction in labor related to qual-


DSC retrofitted its lift trucks with intelligent forks and an integrated scale to enable a new order verification process.

and the hardware chosen, the system had to be integrated with DSC’s IT system so the scales could talk to the WMS. They also had to map which keys on the handheld units would interact with the two systems.

Exploring options This wasn’t the first time DSC had looked at ways to improve order picking accuracy. The 3PL had considered voice-directed picking. While Chamberlain believed voice would improve accuracy, it would also require extensive resources from the IT department. More importantly, based on initial studies, DSC realized that a significant number of errors were on picks with 25, 30 or 40 cases at a location. “Voice wouldn’t ensure that our associates would count correctly when they’re picking a large number of cases,” Chamberlain says. Chamberlain had seen integrated scales for lift trucks. That led him to wonder what would happen if the forklift, the scales, the associates and the IT systems were integrated in a way that each pick could be verified before an associate moved to the next location. Team members were assigned to investigate the different products available on the market, while Chamberlain created a business requirements document that mapped out the process. The idea, he says, was that each time an associate went to a location, the system would compare the weight on the forks to a calculated weight based on the 46

number of items just picked and their weight as recorded in the item master list in the WMS. If the pick was correct, the two should correlate. The next important step was what to do if the associate made an error. The process was designed to give the associate a second chance to correct a mistake. If corrective action failed, an electronic notification would be sent to a supervisor to investigate the error. “If an associate makes an error, the screen stops them from proceeding to the next pick,” says Chamberlain. “If they correct the pick and there’s still a mismatch, a manager is called out to determine if the problem is with the associate, with the weight recorded in our master list or if there was a problem with packing at the manufacturing plant, such as a case with five jars in a pack when there’s supposed to be six.” Tracking and reporting was the final component. The program was designed to capture information about the associate who made the pick, the SKU, the date and time of the pick and the type of error occurred. That information allows DSC to coach associates who make the same error over and over, or report to the manufacturer if there’s a variation in the weights of their cases or packing errors. Once the processes were mapped


From pilot to go-live By the end of 2011, Chamberlain and his team were ready to put the new process to the test under laboratory conditions at the company’s headquarters. “We did all the programming and then went out on the floor to see if it would work,” says Chamberlain. While they were encouraged, “testing a process in the lab probably gets you 75% of where you need to be.” In February 2012, DSC launched a pilot program at a food distribution facility in West Memphis. They rolled it out slowly, starting with one or two lift trucks per shift. Chamberlain and a DSC IT programmer, Carl Fortin, spent three weeks monitoring the results as associates worked with the new system, refining processes along the way. “We needed to be sure the software systems were communicating and that the system was doing what it was supposed to do based on the business rules we built into the process,” Chamberlain says. For instance, if an exception—or mistake—occurred on the floor, did they have the right path in place for the associate to correct their error, or to call in a supervisor and capture what happened for reporting purposes? During the pilot period, the conventional downstream order verification system remained in place. Not a mmh.com

MODERN best practices single error made it to the dock. “After three weeks, the operations manager was convinced the system was working and eliminated the checking function,” Chamberlain says.

As a third-party logistics provider, DSC relies heavily on conventional materials handling solutions, such as lift trucks, pallet rack and warehouse and labor management systems.

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Lessons learned By March 2012, all of the picking in West Memphis was being managed by the new process. It’s now being rolled out to other DSC facilities. With nearly 18 months of results, several lessons have been learned that DSC is applying to future rollouts. Communicate, communicate, communicate: It was important that management and associates alike understood the changes being made, why they were being made and how the system would work before going live. “One of the first slides in our kick-off presentation focused on how continuous improvement allows us to differentiate ourselves in the market,” Chamberlain says. “That translates into growth and job security.” Change management is essential: Younger DSC employees embraced the new process and technologies more quickly than senior employees. “However, we found that if we spent time working with senior-level associates, they were more accepting,” says Chamberlain. As a result, the new process was rolled out to one or two associates per shift, with oneon-one coaching throughout the shift. Monitor and tweak: As associates worked with the system, DSC discovered that a 10-pound case of product didn’t always weigh 10 pounds. Sometimes it weighed 9.9 pounds and sometimes it weighed 10.1 pounds. Those weight fluctuations were magnified when an associate was picking 25 cases at a pick location. “We were getting some false negatives where the associate had picked the right number but the system flagged it as an error because of variations in the weight of a case,” Chamberlain says. To counter that, they weighed 10 to 20 cases of a product SKU to get an accurate average weight for the item master list and also built tolerances into the system. They also shared their findings with their customers so they mmh.com

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could monitor their manufacturing and packing processes. Currently, DSC is working with its intelligent fork supplier to design a slimmer version that can be used on dock forklifts to accommodate pinwheeling of pallets during loading operations. “We want to be an early adopter of this technology and test it out,” he says. Evaluate labor programs: DSC uses a labor management system and incentive-based pay program. As part of the Accu-Pick reporting process, a manager notes whether an error was caused by the associate or was a factor out of the associate’s control. That way, an associate isn’t penalized for loss of productivity if the associate didn’t cause the error. Customer acceptance: In addition to communicating internally, DSC shares the results with its customer and is pitching the solution as a potential gain-sharing opportunity. Chamberlain and his team also see an opportunity to use the information collected by the scales to settle disputes with carriers. “We’ll be able to give carriers precise information about the weight of the pallets that go on the truck,” Chamberlain says. “Everyone talks about being an innovative company,” Chamberlain adds. “I really think this demonstrates that we’re putting something concrete in place to drive cost out of the system.” Internal champions: Operations and information technology partners were invaluable in bringing the idea of Accu-Pick to life. Chamberlain notes, “Dolak has been a huge champion of continual improvement within DSC and routinely volunteers his logistics centers to be pilot sites for new innovations that DSC rolls out. From an IT perspective, Fortin not only developed the code but spent time in the field to ensure that the concept could handle all of the real world scenarios that occur. At DSC, operations, IT and engineering continually challenge each other to ensure all bases are covered.” mmh.com

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Continuous improvement DSC Logistics’s new order verification process reduces labor and improves accuracy By Bob Trebilcock, Executive Editor

U

sing an integrated scale and intelligent lift truck forks, DSC Logistics has created a picking process that is more efficient and accurate than conventional picking and auditing processes. Here are the important steps in the new process. After arriving at a pick location, an associate scans the license plate bar code label on the pallet in the forward pick location. This verifies that the associate is at the right location and the right pallet has been scanned for picking the products required at that location.

1

The driver weighs an empty pallet to start the process.

5

The driver picks product to the pallet.

52


DSC Logistics Des Plaines, Ill. SIZE: More than 18 million square feet of warehouse space under management. The average size is between 400,000 and 500,000 square feet. PRODUCTS: Third-party distribution of products for the food, electronics, tobacco, consumer packaged goods and health care industries. SKUS: 1,200 per facility on average

Unless this is the first pick for the pallet on the lift truck, the associate will add cases of product to a pallet that has already been partially built and may have slip sheets or several wraps of stretch wrap that could affect the weight on the scale. For that reason, the associate zeros out the forks, or sets the scale to zero. This way, the scale will only weigh the cases added at that pick location. Once the forks have been zeroed out, the associate picks

2

The driver receives picking instructions on his mobile computer.

6

The product weight is displayed and confirmed on the scale.

mmh.com


the number of cases indicated on a mobile computer. When the task is complete, the associate enters the number of cases picked into the system and presses a command key that sends the weight registered on the scale to the warehouse management system (WMS). The system instantaneously compares the weight captured by the scale to an estimated weight, based on the quantity of items picked and the weight in the master item list. If those two weights are within tolerance, the associate is presented with the next pick location and the quantity of items to be picked. The associate then drives to that location and repeats the process. If the weights don’t match, the associate is presented with an error message. The associate is first asked to verify that the right quantity of items was picked to the pallet. If the weight is still in error, the system prevents the associate from

3

The driver scans a bar code label to ensure he’s at the right location.

7

If there is an error, the driver is asked to correct the error.

mmh.com

moving to the next System Suppliers pick until a manager investigates the dis- LIFT TRUCKS: Crown Equipment Corp., www.crown.com crepancy. INTEGRATED LIFT TRUCK SCALES: Reasons for the error Ravas USA, usa.ravas.com could include that the FORK ATTACHMENTS: Cascade associate picked the Corporation, www.cascorp.com/americas/en wrong quantity; that WAREHOUSE MANAGEMENT SYSTEM: the wrong product was DSC Logistics proprietary WMS picked; that the cases themselves were the wrong weight compared to the master item list; or that the scale malfunctioned. Once the error has been corrected, the associate receives the next pick on a mobile device and proceeds to that location. 䡺

4

The driver zeros out the scale.

8

If the weight was correct, the driver receives instructions for his next pick.


U G U S T

2013

53


Lift truck user survey:

Lift trucks Modern readers tell us how they’re buying, using and maintaining their fleet By Bob Trebilcock, Executive Editor

C

oaches like to say that you can’t win at sports without a focus on the fundamentals. It’s the reason that athletes who have played a sport as far back as grade school still take batting practice, hit the blocking sled and practice their free throws lest those fundamentals get away from them. When it comes to materials handling, there is nothing more fundamental than the lift truck. You can run a wareLift truck use by class Electric-powered rider trucks, including counterbalanced, sit-down and stand-up trucks – (Class 1)

70%

Electric-powered narrow-aisle trucks, including orderpickers, sideloaders, turret trucks, stackers and reach trucks (Class 2)

40%

Electric-powered pallet trucks, including walkies, riders, low and high lift and reach types (Class 3)

52%

IC-powered counterbalanced lift trucks with cushion tires (Class 4)

32.2%

IC-powered counterbalanced lift trucks with pneumatic tires (Class 5)

24.7%

Electric-powered and IC-powered rider-type tow tractors (Class 6)

7.8%

Rough terrain lift trucks (Class 7)

7.4%

Other

7.1%

54


house without a conveyor and sortation system, an automated storage and retrieval system (AS/RS) or even bar code scanning. But just try to keep running without a lift truck. It’s the reason that for all the glitz and glamour associated with automation, lift truck booths still garner big crowds at trade shows, like the roll out of new cars at the auto show. How then are end users acquiring, using and maintaining their lift truck fleets? Those are questions Peerless Research Group (PRG) asked Modern readers in our annual lift truck usage survey. Here’s what they had to say. Electric trucks predominate Modern readers operate a significant number of lift trucks: As many are using 50 or more trucks (13.7%) as are using fewer than three trucks (14%). The average respondent operates 21 in their facility. They are also using the full gamut of lift trucks types, and a majority of facilities is using more than one type. As with last year’s survey, electric trucks are far more common than internal combustion (IC) powered trucks, continuing a trend that has been in place for the last several years. Buying plans Modern readers make the most of their lift truck acquisitions,

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Lift Truck User Survey Webcast Tuesday, August 27, 2:00 p.m. ET • Register at: mmh.com/lifttruck13

are back replacing their lift trucks every seven years. There is also evidence that the replenishment cycle that was put on hold during the economic downturn is back in swing: Nearly 58% of those surveyed plan to buy or lease a lift truck within the next 12 to 24 months. That’s down by 10% from the 64% who planned to buy or lease trucks in last year’s survey, but still a majority of respondents. On average, they plan to acquire five new trucks, and

Are you likely to buy or lease lift trucks in the next 12 to 24 months?

nearly as many respondents said they were making new additions to their fleets as said they were replacing trucks currently in use. While the lift truck industry is offering more financial packages and options than in the past, buying is still more common than leasing. Nearly 60% said they purchase lift trucks outright while 22% said they buy some and lease some. Only 19% said they only lease. How often do you typically replace your lift trucks? Less than 3 years

1%

Less than 5 years 15% Less than 8 years 28%

Yes 58%

Less than 10 years 19% 10 years or more 31%

No 42%

Other

6%

Average number of years 7.7 Median number of years 9.0 Source: Peerless Research Group (PRG)

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Source: Peerless Research Group (PRG)


U G U S T

2013

55


Those who buy do so because they believe it is cheaper (37%), for accounting reasons (34%) or because buying delivers a better ROI (29%). Those who lease appreciate the ability to outsource maintenance as part of a lease agreement (56%), reduce their upfront investment and adjust their fleet size (52%) and remain current on technology (31%). The remaining respondents buy slightly more trucks (52%)

Buying vs. leasing

than they lease (48%). Most say it is a situational decision. For instance, some manufacturers maintain a core number of lift trucks and lease others on a short-term basis to handle seasonal peaks. While the economic downturn in 2008 had a profound impact on the lift truck industry, 60% said the economy has little or no impact on how they acquire lift trucks today. Only 21% said it influenced their decision to a great extent. This reinforces Do you typically buy or lease your lift trucks?

Why do you buy lift trucks? It's cheaper/Cost 37%

Buy 59%

Strictly a financial decision/For accounting purposes 34%

Lease 19%

We have low hour usage for our lift trucks 29%

Both 22%

Better ROI 29% It's what we've always done 29% Source: Peerless Research Group (PRG)

It's our corporate policy 26%

How do you primarily service/maintain your lift trucks?

Why do you lease lift trucks? Less maintenance costs/Service is included in our lease 56%

Handled by in-house staff 30%

Gives us flexibility while reducing our upfront investment 53% Allows us to use current technology 31%

Outsource to lift truck dealer 46% Outsource to maintenance/ service contractor 19%

It's our corporate policy 26%

Other

Cash flow reasons

5%

24% It's what we've always done 6%


Why do you buy and lease lift trucks?

To what extent does the economy or market factors influence how you acquire lift trucks?

73%

Has little or no impact on how we acquire 60% 36%

To a great extent 20% 24% To some extent 20%

It depends on the situation: Sometimes lease/Sometimes buy

Cost/Cash flow reasons

Have a leaseto-buy program


56



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the importance of a lift truck to keeping a facility operational— regardless of the economy, any plant or DC still in operation has to maintain a fleet of lift trucks to keep running.

Have you adopted or are you planning to implement technology to manage your fleet?

Brand loyalty In other surveys, Modern readers indicate a fair amount of loyalty to suppliers of equipment that is bolted to the floor or integrated into the system, like conveyors or software. In both cases, replacing a vendor can result in a long, costly and painful implementation period. Lift trucks appear to fall into the plug and play category, with less brand loyalty. Only 16% of respondents said they were not very or not all likely to evaluate a new supplier when adding lift trucks to their fleet. Only 36% said they went into an evaluation period with an approved vendor list. At the same time, the field appears to be wide open for the vendor community: Only 18% of respondents said they had a cause to remove a vendor from their short list in the last two years, primarily as a result of poor service. That should be a wake up call to lift truck dealers and manufacturers alike to keep service and customer relations top of mind.

the most common reason given for turning over maintenance to an outside organization. “Outsourcing maintenance allows us to focus on our business,” wrote one respondent. “They are the cheapest and their on-site turnaround of a repair is more rapid than we can do in-house,” wrote another.

Maintaining and managing a fleet When making a purchase, the vast majority (83%) of respondents purchase their trucks from a dealer rather than directly from the manufacturer. Service is a contributing factor, since only 30% of respondents maintain their lift trucks with their in-house staff. Another 46% outsource maintenance to the lift truck dealer, while 19% outsource to a maintenance and service contractor. Not surprisingly, the parts most likely to be purchased in the next 12 months are life-limited parts, like wheels and tires (65%), batteries (60%) and tune-up parts (50%); or consumables, such as chemicals, lubricants and oil (51%) and hoses, filters and valves (32%). Controlling costs, or some variation of that statement, was

The role of technology Modern readers remain slow to embrace fleet management technologies and software systems. In this year’s survey, 42% of respondents said they had adopted or are planning to adopt fleet management technology, tracking the 43% who indicated the same in last year’s survey. Of those early adopters, maintenance history (78%) and maintenance costs (73%) are the metrics most likely to be tracked, followed by data related to safety (65%), such as accidents and injuries, the age of the fleet (58%) and fleet utilization levels (54%). A significant majority of respondents said that the implementation of fleet management software had been somewhat (46%), very (41%) or extremely (7%) successful. Only

Operator training is a must The performance of the lift truck operator is as essential as the performance of the truck to a safe and productive operation. Properly trained drivers also reduce the wear and tear on their trucks and lead to less damage to product and the building. That may explain all but three respondents indicated that they rely on some type of training for their lift truck operator. Many are relying on more than one type of program. Most respondents (82%) rely on an internal training program for their driver. Meanwhile, 15% work with dealers and 14% work with independent service providers.

Yes 42% No 58%


How are you training your lift truck operators? 82%

Internal training program

15%

14%

2%

Dealer

Independent service provider

Other


mmh.com


U G U S T

2013

57



6% said that the implementations had not been successful. While anecdotal, the most common challenges to the implementation and use of fleet management software are external rather than whether the technology itself works. Respondents noted that they had issues related to getting associates to input data; convincing older lift truck operators to use the system; making sure floor and maintenance personnel provide accurate data; or that they couldn’t convince management to invest in a system. Those who had no plans to implement fleet management technologies said that they are able to get fleet management data from their lift truck dealer; that their fleets were too small to benefit from the technology; or, that they weren’t even aware of the availability of the technology. The adoption rate, and the respondent comments, could indicate that the industry has already targeted the large users most likely to benefit from fleet management software. Or it could be a signal that there is still a significant portion of the market that has yet to hear about the technology. 䡺

Who responded to our survey? Respondents represent a range of industries, company size and activities. Peerless Research Group (PRG) received a total of 285 qualified responses to this year’s survey. A qualified response was defined as an individual who is personally involved in the evaluation, selection and/or procurement of lift trucks for their facility. Respondents represented a broad range of manufacturing and distribution verticals, including food, beverage and tobacco (15%), general manufacturing (14%), wholesale trade/other non-manufacturing (12%), fabricated metals (10%) and automotive (8%). Respondents were equally divided between manufacturing facilities (45%) and

warehouses and distribution centers (45%). The average facility employed 148 associates. Half of the respondents worked at companies with less than $50 million in annual revenue; however, nearly 20% worked at facilities with more than $1 billion in revenue, including 9% at facilities with $5 billion or more. Similarly, more than half of the respondents planned to spend less than $50,000 in 2013 on lift trucks; however 4% expected to spend more than $500,000 and another 4% plan to spend between $250,000 and $499,999 in 2013.

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BY MAIDA NAPOLITANO, CONTRIBUTING EDITOR

60

PHOTOS BY CHRISTOPHER LANE/GETTY IMAGES

F

inding effective supply chain leaders is a challenge. Above and beyond smarts and great people skills, today’s professionals need to be innovative, collaborative, influential, metricsdriven, tech-savvy, fair and inspiring. They must possess a true understanding of the supply chain as a collection of interdependent functions—not as silos of operations—that must work together to ultimately give the company a competitive advantage. It’s a challenge that’s taken very seriously by global medical technology leader Becton Dickinson and Company (BD) and its supply chain

Left to right: Larry Smith, vice president for global supply chain; Mary Groskin, supply chain development associate; Devin Maguire, supply chain project manager; Ewald Parolari, senior director for supply chain operations.


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MODERN special report organization. Ranked third by analyst firm Gartner in its annual Healthcare Supply Chain Top 25 for two years in a row, BD’s supply chain has always made every effort to find and develop the best talent to lead its operations at all levels. One such initiative is the company’s Supply Chain Development Program (SCDP). The mission of the SCDP is to specifically enhance BD’s leadership base by recruiting entry-level associates who aspire to become future supply chain leaders. This two-year rotational program is designed to offer leadership development and valuable hands-on work experience to associates in an environment where they can rotate through the different departments and functions within BD’s supply chain group. Only the very best candidates who demonstrate strong interest in the

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better understanding and feel for how these functions all fit together.” Over the next few pages, we’ll follow how BD structures its development program to generate seasoned managers and decision-makers who can one day drive capabilities for collaboration and develop innovative solutions for the efficient delivery of product to customers. How it started Rotational development programs are not unique, and many Fortune 500 corporations offer similar types of programs. “This has been a proven way to bring new talent into a company,” explains Smith. “In fact, within BD, manufacturing, IT, HR, and procurement all have similar, but separate rotational development programs. However, we collaborate and share best practices across all the programs.”

The mission of the Supply Chain Development Program is to enhance BD’s leadership base by recruiting entry-level associates who aspire to become future supply chain leaders. supply chain are selected from graduates of some of the top supply chain management university programs in the country. “These college graduates enter BD with a ‘theoretical’ understanding of the supply chain,” says Ewald Parolari, BD’s senior director for supply chain operations and one of the founders of the program. “By the time they come out of the development program, they’ve got the theoretical and the real world melded together, and they are providing great ideas because they’re looking at the supply chain from different perspectives compared to those who have been in only one position for their entire career.” Larry Smith, BD’s vice president for global supply chain and co-founder of this program, agrees. “We want people who can think holistically across the whole supply chain continuum—from taking the order to delivery. What better way to do it than to spend the time and actually work in other parts of the supply chain where they can get a much 62

It wasn’t until 2004 that a development program that was specific to the supply chain was formally established at BD in partnership with two major universities—Penn State and Rutgers. These institutions offer undergraduate degrees in supply chain with course offerings in logistics, transportation management and project management. “Recently, we also started working with Rider University in New Jersey,” adds Smith. “Their program is relatively new, but BD, along with several other locally based companies, is helping Rider develop a curriculum for new supply chain undergraduate degree programs. Supporting local universities is something we encourage.” In 2005, both Smith and Parolari wanted to take the development of these entry-level associates to the next level. “We wanted to give them a broader, quicker assimilation across the whole supply chain so that they would be more valuable not only to themselves, but also more valu-


able to BD,” explains Smith. They began structuring a formal program that would have participants rotating through four or five different functions of the supply chain. The group had always hired several interns for two months in the summer and one or two students for six-month co-op programs. These interns and co-op associates now became feeders into this newly established supply chain development program. “If you do very well in the internship or co-op program, it typically leads to a supply chain development position,” explains Parolari. In 2008, they also put together a supply chain competency model for each of the major functional areas. From entry-level to the VP level, a list of competencies was developed, tracking the expertise and knowledge level required to reach the required competency. Managers use an assessment model to work with associates to help them understand what development areas they need to focus on to be more successful and further their career goals. “There are currently eight associates who are either enrolled or are graduates of the program within BD,” reports Parolari. “Typically two or three are added every year.” Following successful completion, program associates can then apply and interview for traditional full-time positions within the supply chain group. How it works BD sends teams of people during each university’s recruiting periods to interview for the internships and co-op programs. Because BD is looking to hire only the best of the best for this program, it’s highly selective. A bachelor’s degree in supply chain management or industrial engineering is preferred, along with a high GPA and previous internship experience. BD’s supply chain project manager, Devin Maguire, who completed the program in 2010 and now actively participates in the recruitment process, strongly emphasizes the importance of working well with others. “You are spending six months in five different rotations. You’re going to be working mmh.com

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MODERN special report with a number of different people, and you must be able to communicate and work well as part of a team.” Once selected, the participants follow a very structured program. “What we try to do is follow the exact flow of a product as it moves through the supply chain,” says Parolari. “So you start in customer service, distribution, transportation, then either the master data area or the planning area with the businesses.” For each function, not only are associates exposed to transactional, day-to-day operations and systems, but they also take on continuous improvement projects. The customer service rotation offers associates an introduction into BD’s product offerings and customers. Mary Groskin, a supply chain development associate who just recently completed the program, went through a four-


“What we try to do is follow the exact flow of a product as it moves through the supply chain. So you start in customer service, distribution, transportation, then either the master data area or the planning area with the businesses.” —Ewald Parolari, senior director for supply chain operations

month rotation in customer service. “It helped me gain product knowledge as well as acquire an introduction into our SAP system and how it supports order management,” she says. The distribution rotation exposes associates to BD’s distribution centers and fulfillment operations. With BD opening a new East Coast DC in North Carolina during his rotation, Maguire had plenty to do—from rack labeling projects to systems testing: “We had to test SAP and make sure that it was seamlessly running with our warehouse

management system (WMS).” The transportation rotation allows associates to conduct day-to-day transportation planning with its transportation management system (TMS). Groskin planned domestic shipments and learned how to resolve transportation-related issues. “I also completed a truckload consolidation project where I investigated LTL shipments to find consolidation opportunities,” she says. “Additionally, I worked on improving ocean carrier selection strategies.” The planning rotation allows asso-

BD’s other management tool: LMS wald Parolari, BD’s senior director of supply chain operations, shares how his leadership team leverages the LMS (labor management system) to manage day-to-day operations and drive efficiencies into BD’s supply chain.

E

What made BD decide to install LMS in all three of its largest DCs? Ewald Parolari: In 2006, our thirdparty logistics (3PL) partner, Genco ATC, approached us on the benefits of LMS. That meeting generated multiple discussions between Genco and BD on how we can use LMS to improve productivity while proving continuous improvement project savings. LMS would also give us “eyes” into our 3PL’s labor and enable us to challenge, quite frankly, the productivity levels at all three of the DCs. Genco also agreed to pay for the systems and set up a gainshare type of deal. So, any productivity savings that the LMS would drive would be used to help pay for the systems. In two of the DCs, we paid it off in two years—in the other one we paid it off in less than three years.

64

For day-to-day operations management, it allows the real-time capacity planning of daily workloads, including the shifting of labor between functions. It can track current productivity to see if an operation is running close to standards. We can better manage temp workforce for surge capacity. It also tracks nonproductive time—which we challenge our 3PL to reduce on an annual basis. LMS also drives the analysis for our continuous imHow are you currently provement (CI) projects. using your LMS? One of our CI projects is Parolari: We use LMS in a our cost-to-serve program. variety of ways. For planIn conjunction with LMS, ning and budgeting, LMS Ewald Parolari this program allows us to helps determine how much direct and indirect labor we need at determine the cost to move a case each step of the operation. It allows for Customer A versus Customer B. It us to benchmark throughputs against identifies less profitable customers so industry standards. If we drive a 3% we can initiate programs that will drive productivity improvement or a business productivity and improve profitability. anticipates a 5% increase in volume, the Without some kind of tool to actually LMS can help determine the impact on analyze the variations in volumes, we the budget so we can do some effective wouldn’t know what the cost implications would be. planning. How important is the LMS in managing the DCs? Parolari: In my opinion, LMS is mandatory to run an efficient and effective DC. Without LMS, we would have no idea where our productivity levels are and it would be difficult for us to know how we were doing. It’s also at the crux of a number of programs that we are currently running here at BD.


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“We’ve had discussions with our supply chain leaders in Asia, Latin America and Europe about how to establish similar programs.” —Larry Smith, vice president for global supply chain and co-founder of the program

ciates to interact with managers from other businesses. Under BD Diagnostics’ Preanalytical Systems unit, Maguire performed demand planning for the company’s manufacturing plant and also worked on creating a seasonal forecast model for products. In the BD Medical Surgical Systems unit, Groskin reduced the demand variability at BD’s manufacturing plants. Silver lining According to Smith, associates who have completed the program have been so highly regarded that they often get other offers from within the rest of BD. “These are people who have been well trained and are obviously the top students coming out of college, so

it’s natural that other groups in BD want them,” says Smith. “We have become a net exporter of talent to the rest of the organization, which is quite positive. But we can’t afford to share everyone. We need to keep some of the talent here to make sure we are always meeting or exceeding the needs of our customers.” Parolari certainly agrees. “While it makes it a little more challenging for us, it has actually become a benefit when we talk to the businesses who hired some of our associates. It makes communication and collaboration between both groups a lot easier because they already know our issues as they have spent time in the supply chain.” Through their exposure to the different groups, Maguire and Groskin saw themselves networking and

building relationships. “The various groups appreciated what we did for them,” says Maguire. “Now as project managers, when we need a deliverable from them, it’s easier for us to collaborate.” Looking to the future As the company continues to grow around the world, Smith says BD intends to continue to grow the program. “We’ve had discussions with our supply chain leaders in Asia, Latin America and Europe about how to establish similar programs.” “There’s no doubt in my mind that many of these associates who completed the program will eventually be holding high-level management positions,” says Parolari. “They’re already better decision makers, and they understand what the impact is going to be on customer service or downstream on transportation. It’s no longer a silo, it’s more holistic business decision making.” 䡺

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FOCUS ON

Ergonomics

Palletizer lifts self-level for easy operation

Build your own overhead handling system with crane kit Offered as a modular, highly flexible overhead handling system, the Demag KBK modular crane construction kit enables users to create made-tomeasure light cranes for the handling of loads in the workplace. Options include numerous steel or aluminium profiles, smooth running trolleys, system suspension fittings, turntables and track switches. The kits can be further customized with handling devices including manipulators. Capable of handling up to 7,055 pounds, the components can be configured as single- and doublegirder suspension cranes, suspension monorails, slewing jibs and cranes, and as portal and stacker cranes. Terex, 440248-2400, www.demag-us.com.

A line of 4,500-pound capacity, self-leveling palletizer lifts is offered in pneumatic, mechanical and electric/hydraulic models for ergonomic stacking and destacking of pallet loads. Built on a scissor lift platform with a fully enclosed ball bearing roller turntable, the free-standing units are clutter free and can easily be moved throughout a facility by forklift. The pneumatic model has no electrical or control lines for operation; the air spring is raised to the desired height with shop air or by portable compressor, and lowered by bleeding air with a control valve. Powered by an adjustable spring, the mechanical unit is also cable-free. The electric/hydraulic unit provides precise vertical positioning—directed by a foot switch—for positive control of the pallet height. It can plug into a 110-volt outlet. Advance Lifts, 800-8433625, www.advancelifts.com.

Ergonomic manipulators A line of ergonomic manipulators precisely counterbalance heavy loads—from sheets to drums—to help an operator effortlessly suspend, rotate, tilt and transfer items with precision. Various models offer load capacities up to 1,100 pounds, with a working radius up to 20 feet. Adaptable to the operator’s preferred working height and position, the manipulators smoothly and progressively position and place loads during assembly or they can suspend them for further processing. Once suspended, the item can be moved manually or under power. Features include a control console that adjusts the counterbalance force, rotation, tilt, braking and parking, and a safety device that prevents load release until it reaches its destination. Famatec North America, 513-722-1030, www.ergonomicmanipulators.com.

Semi-automated workstations boost ergonomics, productivity The ergonomics@work line of semi-automated picking and palletizing workstations combines automation equipment with manual processes to improve worker performance by reducing physical strain. Manually flexible, the workstations can be adjusted to accommodate each operator’s height. Their configuration ensures that manually lifted weight is transported only horizontally or downwards. Capable of supporting up to 1,000 picks per hour, the workstations can incorporate automated stackers and destackers that process up to 1,400 totes per hour continuously. SSI Schaefer Systems International, 877-724-2327 automation.ssi-schaefer.us.

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Lift Truck Damage

Move, lift loads on battery-powered portable scissor lift Battery-powered, XBP portable scissor lifts allow an operator to transport and lift loads to a convenient height at the touch of a button. With platform sizes from 24 x 36 inches to 48 x 60 inches, the lifts come in capacities from 1,000 to 2,000 pounds and rise to maximum heights of 33 to 53.5 inches. Ideal for transferring loads to and from workstations, picking orders, positioning materials at production machines, or as a variable-height workstation, the lift reduces production time and employee injuries by eliminating repetitive bending, lifting and carrying. The units use four oversized casters (two swivel, two fixed) to roll smoothly on any surface, including carpet, and are stabilized safely with a foot-operated floor lock. Presto Lifts, 800-343-9322, www.prestolifts.com.

Transport, lift loads up to 350 pounds with powered hand truck Lift’n Buddy elevating hand trucks combine the vertical lift capabilities of a small powered stacker with the convenience of a two-wheel hand truck. To eliminate bending and stretching when loading, unloading or moving items from one level to another, the truck’s adjustable height platform is powered by a maintenance-free, 12-volt battery. A linear actuator ensures smooth lifting and lowering and provides precise load positioning with zero drift. Built on an aluminum frame with powder coat paint finish, models lift load capacities up to 350 pounds to 36 inches high. For effortless travel over carpet, uneven floors, pavement, dirt and thresholds, the unit rides on heavy-duty, 10-inch flat-free polyurethane tires. Lift’n Buddy, 855543-8283, www.liftnbuddy.com.

Off-the-shelf electric belt drive scissor lift table Engineered with a high safety factor, the LSBD04 electric belt drive scissor lift table is powered by a mechatronics drive system using a single belt, multi-pulley configuration. Powered by a standard 480-volt, three-phase electric motor, the lift holds a static position to ±0.06 inches indefinitely. The unit is rated for more than 120,000 duty cycles annually, and its 40 x 59 inch table holds capacities up to 2,000 pounds. Ideal for manufacturing and automation applications, including clean room use, the machine is easy to maintain and does not require hydraulic fluid. EnKon Systems, 800-444-4351, www.enkon.pro.

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FOCUS ON

Ergonomics

Custom, portable lift with turntable uses air casters for precise positioning A line of custom-built, air bearing portable lifts includes a manually rotating turntable for precision positioning of heavy parts. Ideal for use in assembly operations handling large components, the device rides atop air casters to eliminate the need for an overhead crane to lift pieces for inspection or work-inprocess. Features include a black oxide finish to the turntable to prevent rusting and enhance durability. Autoquip, 877-360-6777, www.autoquip.com.

Precisely position loads with elevating cart A line of linear actuated elevating carts provides easy elevation of loads during transport within a facility. The carts come in two models with raised heights ranging from 34 to 51 inches. Both versions hold up to 400 pounds and have platform dimensions of 23.625 x 35.5 inches. Powered by two 12-volt batteries, the carts travel on two rigid and two swivel poly-on-steel casters. Features include hand-held pendant control, battery charge indicator, emergency on/off switch, chrome-plated deck and powdercoated blue safety legs and frame. Vestil, 260-665-7586, www.vestilmfg.com.

Corrosion-resistant, galvanized dock lifts Heavy-duty lift A heavy-duty dock lift with 15,000 pounds capacity can service heavy vehicles—including armored—in high security, confined and restricted areas. The hydraulic lift features pocket-style removable guard rails for operator safety during vehicle loading and unloading, a bridge plate to service the vehicle, and a side installed bridge plate to service an upper level. The unit’s platform measures 12 x 16 feet. A three-phase, 10-horsepower power unit drives operations with controls connected on a 20-foot coil cord. Pentalift Equipment, 519-763-3625, www.pentalift.com.

Dura-Dock loading dock lifts facilitate quick, safe load transfer to and from any truck bed to any dock height, without ramps or inclines. Offered in 5,000- and 6,000-pound capacities, the lifts feature corrosion-resistant, galvanized base and legs and rise from grade level to a maximum height of 59 inches. With platform sizes ranging from 6 x 8 feet to 8 x 12 feet, the lifts are equipped with a weatherproof push-button NEMA-4X control with 20 feet of coiled cord. Other features include a diamond-tread, steel platform with beveled toe-guards painted safety yellow; removable steel handrails; a hinged, diamond-tread throw-over plate at one end of the platform and a snap chain at the other; hardened steel pins in self-lubricated bearings at all pivot points; and adjustable lowering speed with a pressure-compensated flow-control valve. Southworth Products, 207-878-0700, www.southworthproducts.com.

Turntable on work positioners eliminates reaching, unnecessary movement A line of ergonomic electric hydraulic work positioners improves ergonomics and product positioning. Features include a heavy-duty, manual 360-degree rotating turntable (in 36- or 48-inch diameters) that eliminates reaching and unnecessary operator movements. The positioners are ideal for use in palletizing, depalletizing, workstation assembly or manufacturing operations. Units handle capacities from 2,000 to 4,000 pounds, and rise from a 10-inch lowered height to 34 inches. Verti-Lift, 502-361-0180, www.verti-lift.com.

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Scissor lift table reduces worker fatigue, cuts risk of back injuries Ruggedly constructed, Hulk scissor lift tables provide versatile, ergonomic and safe lifting to reduce worker fatigue and lower the risk of back injuries. When combined with turntables, the units improve palletizing productivity. The lifts are equipped with single or dual high-pressure hydraulic cylinders for positioning. To prevent uncontrolled descent, the cylinders have safety velocity fuses. Features include solid steel legs with stiffener bars for extra strength and support, pre-wired NEMArated controls, and moving parts with high-strength roller pins, snap rings and hardened cam followers. A plastic tank prevents condensation and provides an easy means to visually check pump oil level. For wash down applications, the lifts may be specified with stainless steel construction. Kelley, 877-558-6960, www.kelleycompany.com.

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Move plastic, steel drums with powered walkie stacker The power-propelled Model 910 walkie stacker moves drums on and off racks, pallets and trucks—and lifts upright drums—for placement in horizontal positions. The unit allows an operator to rack 55-gallon steel or plastic drums (with top rims) to heights up to 10.5 feet. The unit handles loads up to 800 pounds, and uses precision placement technology to position drums side by side with virtually zero clearance between them. It can also accommodate drums with a faucet in place. Morse Mfg. Co., 315-437-8475, www.morsedrum.com.

WORK ACCESS LIFTS SAFER & MORE EFFICIENT THAN LADDERS OR SCAFFOLDING • "'!()% "!!(##)$&#)(("&() % ( #)"&( $"# &%%# &%)!%'('$('&) % )($ &#)"&)&( #)%)") &&%' • $!"&$%'#)$'!() %!&$%')"##( )$'#(!&$%' "$'&('"'!()"')% ( )$!$' !(' &'

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Export and Domestic Pallet Solutions

FOCUS ON

Ergonomics

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Offered as an ergonomic solution for truck drivers and operators, the Dixie Industries sixth wheel ratchet crank handle attaches to trailers to lift and lower landing gear. The device replaces a standard crank and positions the operator in an ergonomically correct posture when manipulating the gear. Due to its construction, the ratchet uses the operator’s body weight while reducing muscle exertion and lowering the risk of shoulder or back injuries. Made of hardened steel, the handle fits all trailers and all standard landing gear. It features a self-locking security cap made of hardened steel and is secured to the trailer by a self-locking pin and cap that can only be removed with heavy-duty shop equipment. Columbus McKinnon, 800-888-0985, www.cmworks.com/ sixthwheelratchet.

Copolymer resin vacuum tube replaces neoprene cloth tubes Constructed of copolymer resin, the Rhino Tube for vacuum tube lifters is offered as a replacement for neoprene cloth tubes, and provides enhanced resilience and reliability. Capable of flexing as tight as 1 millimeter (0.039 inches), the copolymer casing has an operating range of -40°F to 240°F and is impervious to chemicals. The tube comes in high visibility yellow for safety when lifting and moving loads within a process area. Offered in standard lengths of 9 and 10 feet (or cut to custom lengths by the supplier), the tube may be specified for all existing lift tube diameters. Integral fitted cuffs allow for fast and easy mounting. Unimove, 610826-7855, www. unimove.com.

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PRODUCT Showcase AC lift truck batteries rated at 90 amp-hour capacity

Wireless electric vehicle energy meter identifies efficiency opportunities

Ironclad Workhog and Deserthog batteries for AC-powered lift trucks offer high amp-hour ratings and sustained voltages throughout the discharge cycle. Rated at 90 amphour capacity, the 23-inch batteries use standard (instead of high-gravity) electrolyte to maximize lifespan. They feature square tube technology that exposes more surface area of the positive plates to the electrolyte for higher sustained voltages and more work capacity throughout the discharge cycle than round or flat plate batteries. EnerSys, 800538-3627, www.enersys.com.

Installed in minutes, the PosiCharge wireless E-Meter IV electric vehicle energy meter captures energy and usage data automatically without operator or maintenance staff management. This data aids in the determination of the right size smart charging system. The device uses a real-time clock to monitor and record truck information, then generates reports and analyses to identify efficiency opportunities. Data gathered includes battery voltage, current, ambient temperature, available charge time, weekly equalization, regeneration and opportunity charge return. Measuring 1.5 x 6.5 x 9.5 inches, the meter is compatible with a range of equipment, from 24-volt pallet jacks to 80-volt forklifts. AeroVironment, 866-767-4242, www. posicharge.com.

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MODERN 60 Seconds with... Jim Moran Industrial Truck Association (ITA) TITLE: Chairman, ITA; Board of Directors, Crown Equipment LOCATION: Washington, DC (ITA) EXPERIENCE: Moran is a 45-year industry veteran who has held several industry leadership positions and presented at numerous materials handling and supply chain conferences. He is a 20-year member of the ITA Executive Committee and a three-time president of the association. DUTIES: As ITA Chairman, Moran works with the executive board to determine the strategic direction of the association. He is also responsible for building a consensus behind that strategic direction and providing a voice to the association’s position on industry issues.

Modern: How did the industry fare in 2012, and do you have any insight into sales through the first half of 2013? Moran: Industry demand for 2012 in North America ended up at 9% over 2011. This year (January to May), we’re growing at that same 9% rate. Our industry forecasted growth for 2013 at 4% to 5% given the uncertainty that is in the economy. Obviously, we are tracking at a better growth rate than our forecast. As an industry, we are beginning to believe that we are getting back to sustainable growth through the next couple of years, even if the growth is slow. Modern: During the recession, many lift truck users parked their fleets. Does that mean the age of the fleets is getting older? Or, have we worked through that issue? Moran: We do have fleets that are older than we would have seen in the past, but with fewer operating hours. Part of that may be because users parked their fleets during the recession. But, it is also a result of the fact that the products in general are better than they used to be. One of the things we’ve noticed is that users are confident enough to 74

extend some of their leases because the equipment holds up. They’re getting more life out of their trucks. Going forward, technology will allow us to do more predictive rather than reactive maintenance. We’re going to have more understanding of how a truck is performing right down to the part level than we did in the past. That’s going to change how we manage fleets and replacement. Modern: Are users today still maintaining their own fleets, or are they turning fleet management duties over to distributors and third parties? Moran: We see more people using the lift truck manufacturer’s distributor channel for service or to maintain their fleets. The exceptions tend to be DCs or manufacturing plants that have other sophisticated equipment that requires maintenance expertise. If they have refrigeration on site, for example, or sophisticated materials handling systems, they have technically qualified people on staff anyway. One of the big drivers is the availability of technicians. Most truck manufacturers and distributors are working in concert with the tech schools to deal with the technology


in today’s trucks. Not many end users can justify making that level of investment. Modern: How about the technology side of fleet management? Is the user community adopting fleet management software? Moran: The user community is adopting fleet management software, and we think there’s still opportunity for expansion. Fleet management software isn’t just for maintenance record retention, and it’s not just for large users. A small user still has to comply with OSHA pre-operation daily check lists, which is part of the software. The ability to store that information electronically is a key feature of fleet management software. It also allows you to track the impacts that lead to product, rack and merchandise damage. What’s more, it’s not that expensive. Increasingly, you can access the software on a weekly or monthly basis and only pay for what you use, like a phone subscription. 䡺 mmh.com

YOUR OPERATION NEEDS TO BE MORE EFFICIENT THAN EVER. YOU NEED TO CUT COSTS AND INCREASE PRODUCTIVITY. AND THERE’S NO ROOM FOR ERROR.

Hyster® lift trucks are designed to help you get more done with less. In fact, the Hyster CT uses up to 12% less fuel than the leading competitors, but don’t just take our word for it. In an independent survey, current customers ranked Hyster #1 in Total Cost of Ownership.* To see how our tough, reliable lift trucks finished first, visit hyster.com/TCO. *Peerless Media Research Group, 2011

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