Introduction to Vehicle Management Systems
By Ken Ehrman, President and Chief Operating Officer, I.D. Systems, Inc.
Powered industrial trucks are the workhorses of material handling operations and managing them effectively has its challenges. Lift truck accidents are the second leading cause of fatalities in the private sector (highway vehicles being the first), according to OSHA.† Also, operator labor represents the largest single cost component of material handling operations and a fleet of industrial vehicles is very expensive to acquire and maintain. Vehicle management can help control these and other safety, productivity and damage issues that are so common in fleets.
The fundamental starting place is vehicle access control, or restricting who can operate your trucks. Since it’s impossible for your industrial vehicle operators to keep dozens of keys in their pockets, inevitably keys are always left in trucks’ ignitions. That means anyone can operate the trucks at any time with little, if any, accountability.
Lack of accountability translates to:
- Anonymous damage to vehicles, products and your facility
- Lack of compliance or increasingly cumbersome processes to meet OSHA safety standards to ensure only trained operators use vehicles in safe operating condition
- A large disparity in the amount operators are paid compared to the time they actually spend operating a vehicle. Operators are paid for an 8 hour shift, but actual drive times are often less than 50% of time on the clock.
Source: "Andel on Lift Trucks: The Price of Ignorance is Death," Material Handling Management, July 2006
Because of these significant issues, many of the most successful companies in the world have adopted a Vehicle Management System (VMS) enterprise-wide. Vehicle management systems are enabling businesses to better use labor resources and provide a safer work environment, which directly leads to maximizing profits and material velocity. However, there are still many companies today that have:
- No true visibility of the material handling movements made by industrial truck operators
- Limited tools and data to measure the complete productivity of their operators
- No efficient way to ensure vehicles are safe to operate
- Limited or manual systems, if any, to determine where vehicle operators are assigned and to temporarily reassign them based on peak needs
What are Vehicle Management Systems?
A vehicle management system (VMS) begins with access control to your vehicles. In order to start any vehicle in your facility, the operator needs to present their badge ID to a card reader installed on the truck. The system is linked to the vehicle’s ignition and the vehicle will only start if the operator is authorized. Once started, the system monitors and tracks exactly how that vehicle is used (or not). Data is collected automatically and in real time to provide the visibility you need to manage your business efficiently.
VMS helps you answer questions, such as:
- Are my operators driving safely?
- Why does it take some employees much longer than others to do specific tasks?
- How long should it take to do a specific task? How can I measure what the true engineering standard should be?
- Do I have the right amount of vehicles in my fleet?
- Why are some operators paid overtime while others are not working their full shifts?
- Where do we need to focus our labor resources today?
- How do we forecast vehicles and operators needed for future workflow?
- Am I maintaining my vehicles efficiently? Can I increase vehicle “uptime”?
This report provides unique insight into how these questions are answered by VMS.
You will learn the most important reasons why you need to consider installing a vehicle management system now and factors to evaluate when considering VMS vendors.
The Five Key Reasons to Consider Vehicle Management
1. Operators are paid for three to four TIMES more hours than actual material movement time.
Across multiple industries, initial VMS data reveals a very similar and startling pattern of vehicle operation.
Typical Shift Pay: 8 hours
Operator Logged in to Truck: 4 hours
Truck In Motion: 2 hours
Truck Moving with a Load: 1 hour
One hour of product moved for every 8 hours paid!
This data has been collected from over 20,000 VMS vehicle installations. Of course, some operators are higher while some are lower, but VMS provides operational visibility and productivity metrics that are not achievable in any other way.
Many companies implement various methods to improve productivity: If you can use VMS to achieve 2 hours of “motion with load” time per shift, that represents a 100% increase in your productivity! You can move more product through your facilities and/or reduce your operator headcount or overtime. Either way, you come out significantly ahead.
2. Your Supervisors and Managers are doing the best they can with what they have:
When you walk around your facility, do you see empty trucks not being used? Yet, at the same time, are there also requests to acquire more trucks? This often results from unauthorized drivers, like outside contractors, borrowing trucks without returning them, authorized operators borrowing trucks from their assigned area and failing to return them, or without real-time visibility of vehicle location anywhere in the facility, a supervisor often needs to keep a truck available and in their line of sight for any unplanned tasks.
Control: Without access control, anyone can use any truck at any time, so there is nothing enforcing a vehicle’s return to its designated area. You may have invested in WMS, barcoding, RFID or voice, but none of these technologies can be optimized if the trucks are not in service or in their assigned location. When trucks are not where they are supposed to be, what is the cost of operators or supervisors walking the floor looking for an available truck?
If you can’t measure it, you can’t manage it: Each day or week, supervisors assign drivers to various areas of the building or to perform certain tasks based upon their best projection of demand. By using VMS each day, supervisors have a tool to identify work performed by each driver and match it against the peak work flows. By reviewing this data, daily assignments can be fine tuned to match actual needs vs. perceived needs.
3. Every day you are asked to do more with less:
Do you find that certain areas of your facility “need” more forklifts and more overtime? Do you rent or consider renting vehicles for peak periods? How many vehicles are out of service in maintenance at any time? What if those vehicles had less down time?
Vehicle Management Systems provide unique insight into fleet operation by evaluating how your current vehicles are being used and if there any opportunities to better allocate them. One of the most important of which is a “maximum simultaneous usage report.” This graph identifies the peak use of your fleet by each area of your facility. In addition, it shows utilization, including peaks and valleys so that your operations can be better balanced over time. Why buy or rent vehicles to meet perceived peak needs when data can provide real metrics to evaluate this decision? Several VMS customers have not needed to buy new trucks in years because they were able to re-allocate their vehicles
The hidden costs of Maintenance:
The more vehicles in Maintenance, the more vehicles you need in your fleet. By using VMS to schedule Preventative Maintenance (PM) on actual motion hours (vs. hour meter or calendar time), you can typically reduce PM costs by nearly 50%. Hour meters generally run when the key is turned, not necessarily when the vehicle is moving. Ask your dealer/manufacturer’s rep, how many hours of motion time are assumed when the 300 hour PM is scheduled. They will typically say “all 300 hours”. However, VMS will show that motion time is typically 50% of logged hour meter time. Reducing PM counts means lower costs as well as more vehicles in operation since they are only being serviced when it’s necessary.
Additionally, by implementing wireless vehicle inspections via electronic checklists, small problems can be identified by drivers in real time, before they become more costly maintenance repair items that keep vehicles out of service for extended periods.
Without the ability to measure or collect data, your supervisors and managers run their operation based on what they know and can see. However, we find that there is a wealth of possibilities of using an existing fleet differently, even just slightly different, not only increases effectiveness, but creates significant cost savings.
4. You want to keep your employees as SAFE as possible
Making the workplace safe for its employees is important to all businesses. Many safety systems reduce productivity and are seen as overly burdensome. However, no one wants injuries or fatalities (and no one wants to be the supervisor on duty if an accident happens).
“Each year in the United States, nearly 100 workers are killed and another 20,000 are seriously injured in forklift-related incidents.”††
There are numerous OSHA safety regulations in place to help ensure a safe work environment. The most prominent are summarized below:
• Before use, drivers are required to inspect vehicles for unsafe conditions
OSHA requires that industrial trucks be examined before being placed in service. They shall not be placed in service if the examination shows any condition adversely affecting the safety of the vehicle. Such examination shall be made at least daily. When industrial trucks are used around the clock, they shall be examined after each shift. When defects are found, they shall be immediately reported and corrected [29 CFR 1910.178(q)(7)]. Source: CDC/NIOSH
• Employers need to ensure that only TRAINED operators can use forklifts and like equipment
OSHA has promulgated the Final Rule for Powered Industrial Truck Operator Training [29 CFR 1910.178(l)], which became effective March 1, 1999. The standard requires operator training and licensing as well as periodic evaluations of operator performance. Source: CDC/NIOSH
Ultimately, everyone needs to comply with these regulations. VMS can help you do so by enforcing daily vehicle safety checklists as well as tracking and authorizing drivers’ access to vehicles. How many times do you see anonymous damage in your facility – to the racks, inventory, and the vehicles themselves? How can you enforce a sense of accountability for your drivers? Once you have trained them, how can you cost effectively ensure that only those drivers are operating vehicles?
VMS systems should also identify unsafe driving including speeding and impacts. VMS makes the workplace safer not just for the drivers, but for the hundreds of other employees/pedestrians that work so closely around them.
The cost of one incident, whether it’s from an untrained driver, or major damage to a rack from careless driving can often more than justify an investment in VMS technology that can help manage these conditions.
†† Source: Preventing Injuries and Deaths of Workers Who Operate or Work Near Forklifts June 2001, DHHS (NIOSH) Publication No. 2001-109
5. VMS is becoming the workplace standard
Keeping manufacturing and production in the non-third world countries is increasingly seen as too costly. Productivity tools are essential to maintain a competitive edge. As a result, the most successful companies in the world have adopted VMS enterprise-wide. VMS gives you the tools you need to optimize your material flow as safely and effectively as possible. Typically, each dollar saved in distribution/manufacturing translates to nearly 5–10 times that in increased sales (based upon a company’s margin profile). The return on investment and established results of a VMS has been proven for you and now it’s time to move ahead.
After deploying a VMS:
- A leading retailer moves 25% more pallets through their DC’s
- A leading auto manufacturer has reduced maintenance expense by over 60%
- A government agency was able to put a complete moratorium on forklift purchases and operator overtime
- A distribution center won the Great Lakes safety award
Evaluating the Right Vehicle Management System Vendor
When considering a VMS vendor, it is essential to evaluate the following criteria:
Will the system void your truck manufacturers’ warranty?
You should require that the proper concurrences are in place from the original equipment manufacturers and dealers to ensure that the VMS will not interfere with UL approvals and other key safety endorsements. Does the vendor have concurrences in place or will that potentially slow down your deployment?
The system should work on ANY type of truck, now and in the future.
To provide the most value, a VMS needs to be installed on all trucks in the workplace. You may not want to be “locked into” a particular truck manufacturer for your next year’s truck purchases and this can happen if you buy a VMS system that only works on one truck type. The data capture also needs to be consistent regardless of model/type/age. One motion hour on one truck type should be identical to one motion hour on a different type.
Select a vendor with years of experience, that can offer best practices learned from thousands of installed vehicles.
On the surface, VMS systems can appear the same. However, very few vendors’ systems have been in place for years and can therefore address the myriad day-today issues that will inevitably arise. If an operator forgets his badge one day, is that day’s data lost? If an operator is deleted from the system, how do historical reports address this? Ensure that the VMS system you select is less work and more efficiency than before you had the system!
The VMS should easily integrate with other systems.
If you already have a maintenance, WMS, timecard, or safety database, ensure that the selected VMS system can easily exchange data with those software programs. Also, be sure that the VMS system will not be a burden on your IT department.
The VMS vendor should team with you to achieve the Return on Investment you signed up to when the project was approved.
Whether its 6 months or 12 months, the time horizon you need to show a return on investment is going to be quick. Identify a company that will work with you to meet your goals as well as find ways to exceed them, instead of launching the system and the deployment becomes a full time job beyond your existing responsibilities.
In Summary
As companies attempt to optimize their supply chain, they need to stay on top of emerging best practices. Vehicle Management Systems have demonstrated a proven payback to the businesses that adopt them. Typically, they can provide less than a 12 month return on investment (ROI). In addition, with numerous OSHA regulations in place, it’s important to do everything you can to support a safer working environment. Every day is a challenge in business and new measurement and optimization tools are paramount to success.
For more information on I.D. Systems’ Vehicle Management System, please go to http://www.id-systems.com/5reasons or contact us at info@id-systems.com or 201.996.9000.
About I.D. Systems, Inc.: I.D. Systems, Inc. is the leading provider of VMS for securing, tracking, and managing high-value enterprise assets for over 13 years. These assets include industrial vehicles, such as forklifts and aircraft ground support equipment, and the people who operate them. The company’s patented wireless system, which utilizes radio frequency identification, or RFID, technology, addresses the needs of organizations to control track, monitor, and analyze their assets. Over 20,000 vehicles in over 2,000 facilities use our VMS system every day.
I.D. Systems World Headquarters
One University Plaza, 6th Floor, Hackensack, NJ 07601
Phone: +1 201-996-9000
Email: info@id-systems.com Email: saleseurope@id-systems.com ©I.D. Systems, Inc.
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