mmh.com August 2014 · An ideal arrangement of component parts ensures easy access and convenience for maintenance. A design based on human engineering relieves fatigue and increases

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PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

August 2014

CN: Train keep a rollin’ 20

EQUIPMENT REPORT

Elevating the fuel cell lift truck market 44SPECIAL REPORT

Top 20 lift truck suppliers 35INFORMATION MANAGEMENT

Lift truck maintenance:Real time is real money 50

Gordon Graham, senior manager of intermodal development for CN

EXCLUSIVE RESEARCH

2014 Lift Truck Survey: Results are optimistic 30 + Lift Truck User Survey Webcast

Tues., Aug. 26 at 2:00 p.m. ETwww.mmh.com/lifttruck14

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mmh.com MODERN MATERIALS HANDLING / a u g u s t 2 0 1 4 3

UP FRONT B R E A K I N G N E W S Y O U S H O U L D K N O W

Accellos and HighJump Software mergeACCELLOS AND HIGHJUMP SOFTWARE, each leading global providers of supply chain management software, have announced an agreement to merge.

The merger creates a combined 11,000 customers in 23 countries with operations in North America, Asia and Europe and brings together technologies including net-worked trading partner connectivity, warehouse manage-ment, transportation management and route delivery.

The merged company will operate under the name HighJump and continue to use the Accellos brand for mid-market supply chain execution technology. Accellos founder

and CEO Michael Cornell has been appointed CEO.“Discussions with our customers have made it clear

that omni-channel is a catalyst for rethinking their supply chain and its underly-ing technology,” said Cornell. “This merger brings extremely com-plementary technology to both Accellos and HighJump customers. Our collective supply chain execution product portfolio now covers the unique needs of large enterprises, 3PLs and SMBs.”

RPA announces winners for Excellence in Reusable Packaging Award

TWO COMPANIES THAT ACHIEVED measurable and significant cost and environmental savings earned the 3rd-Annual Reusable Packaging Association Excellence in Reusable Packaging Award.

“We received strong submissions this year that documented the multiple and far-reaching

benefits of reusables on small and large scales,” said Robert Engle, RPA chairman and president and CEO of International Contract Molding (ICM), an Otto Company.

Svenska Retursystem earned the award for companies with revenues more than $25 million. The company led a program to establish a common pooling system for more than 200 food producers in Sweden and food manufacturers throughout Europe. Since the program’s inception in 2001, nearly 1 billion crates have been delivered, replacing the same number of single-use packaging.

Full Belly Farm, a certified organic farm in California, won the RPA award for businesses with revenues less than $25 million. The grower replaced 8,330 waxed cardboard boxes with 2,000 reusable plastic totes with attached lids in July 2013, resulting in cost savings of $14,161 per year, a savings of 8% of total box costs.

THROUGH ITS U.S. SUBSIDIARY, Yaskawa America, Yaskawa Electric Corp. has acquired Solectria Renewables, which will continue to operate as a wholly owned subsidiary.

Headquartered in Lawrence, Mass., Solectria manu-factures high performance photovoltaic (PV) inverters for the residential, commercial and utility-scale power systems. Since being founded in 2005, Solectria has grown to become a leader in the North American solar market. The company employs more than 160 people throughout the United States.

Yaskawa will bring scale, global sales and manufac-turing facilities, as well as diversification to Solectria. Likewise, Solectria will bring more than 20 years of power electronics experience, 10 dedicated to the PV industry.

“This is an effort to broaden Yaskawa’s exposure in the renewable energy market and expand the use of our technology expertise,” said Mike Knapek, Yaskawa America president and COO. “The philosophies and strategies of both organizations are highly aligned on enabling sales growth and market expansion.”

U.S. business leaders increasingly optimistic about economyOPTIMISM FOR THE NATION’S economic outlook among U.S. business leaders continued to rise from first quarter 2014, according to the latest data from the “Grant Thornton International Business Report (IBR),” a survey of more than 3,300 business leaders in 45 countries.

In second quarter 2014, optimism among U.S. busi-ness leaders rose eight percentage points to a net bal-ance of 74%, marking the highest level since 2004.

The increase in optimism in the United States is consistent with what is happening globally. In second quarter 2014, optimism among global business leaders

rose two percentage points to a net balance of 46%. This marks the highest level in the survey’s history, and a 19% increase from a year ago.

“Following a strong first quarter, business leaders across the globe continue to show levels of confidence we have not seen in more than a decade,” said Stephen Chipman, chief executive officer of Grant Thornton. “The increase in optimism, coupled with recent improvements in key economic indicators may finally provide business leaders the confidence to invest in their businesses, create jobs and grow their operations in the coming months.”

Yaskawa acquires Solectria Renewables, makers of solar power components

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mmh.com MODERN MATERIALS HANDLING / A U G U S T 2 0 1 4 5

PRODUCTIVITY SOLUTIONS FOR DISTRIBUTION, WAREHOUSING AND MANUFACTURING

VOL. 69, NO. 8

DEPARTMENTS & COLUMNS 3/ Upfront 7/ This month in Modern16/ Lift Truck Tips: Leasing18/ Packaging Corner: Weighing68/ Focus On: Ergonomics74/ 60 seconds with...NEWS 9/ Survey asks: Need for green or

need for speed?10/ Global demographics play emerging

role for manufacturers12/ Optimism on the rise for profits, hiring

and investment14/ U.S. 3PL revenue sees 3.2% increase,

reports Armstrong

COVER STORYSYSTEM REPORT

20 CN: Train keep a rollin’Canada’s largest rail operator has developed a new parts management and maintenance program to reduce the downtime of mobile cranes at its intermodal terminals.

FEATURESREADER SURVEY

30 2014 Lift Truck User Survey: Readers feel optimistic, ready to spendWith plans to buy a total of more than 1,100 lift trucks in coming months, readers share their perspectives on spending, maintenance practices and technology usage.SPECIAL REPORT

35 Top 20 lift truck suppliersOur list grows top heavy following another big merger, but after a year of relative calm, the market is heating up once again.EQUIPMENT REPORT

44 Elevating the fuel cell lift truck marketWith use by Walmart, BMW and other large, 24/7 facility operators, hydrogen-powered lift trucks are proven at the higher end of the market. But can they catch on elsewhere? Fuel cell providers are betting that turnkey, streamlined offerings will help.INFORMATION MANAGEMENT

50 Lift truck maintenance: Real time is real moneyOnce seen as a necessary evil, lift truck maintenance costs prove ripe for efficiencies that save money and boost productivity. PRODUCTIVITY SOLUTIONS

56 Automated pick-to-tote systems57 Compartmented bins cut storage space58 Containers get the most from

vertical carousel60 Vertical lift modules trim floor space

60 seconds with Brian Butler, Chairman, Industrial Truck Association; president & CEO, Linde Material Handling NA

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-qualifi ed 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 mail-ing offi ces. 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 permis-sion of the publisher is prohibited. All rights reserved. ©2014 Peerless Media, LLC.

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PHOTO: ALLEN McINNIS/GETTY IMAGES

Gordon Graham, senior manager of intermodal development, CN

SPECIAL SUPPLEMENT

62 Three point solutions for your warehouse

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Back in 2010, when we were work-ing with Peerless Research Group (PRG) in designing Modern’s first

“Lift Truck User Survey,” we realized that not enough attention was being placed on what we traditionally called the back-bone, the workhorse, the most funda-mental piece of equipment to be found in any materials handling operation: the lift truck.

At the time, the U.S. economy was just starting its slow creep out of recession, and fleet managers, who had taken their lift truck operations for granted for too long, were short on budget and running their equipment to the point of disintegration.

Our first “Lift Truck User Survey” was ready for the August 2010 issue, so we decided to build on the theme to inspire re-investment, complete with case studies, reports on the newest equipment, and the latest best practices illustrating how savvy end users were using lift trucks as platforms for technology to improve efficiencies de-spite the budget crunch.

This month, Modern is proud to offer readers the fourth installment of our annual Lift Truck Issue. And, I’m happy to report that the re-investment that these theme issues were design to help spark is certainly trending up.

Starting on page 31, associate editor Josh Bond walks us through the findings of our “2014 Lift Truck User Survey,” the clearest snapshot available of current man-agement and maintenance best practices as well as fleet manager spending plans. According to Bond, a number of ele-ments—some economic, some simply tim-

ing related—have converged to make this a most encouraging report.

“A key tenet of fleet management is ro-tation and retirement, which prevents aging lift trucks from consuming time and money they don’t deserve,” says Bond. “During the recession, that was being ignored. How-ever, this year’s survey tells us that between trimming the fat, deploying state-of-the-art equipment, and riding an increasingly strong economic wave, our readers’ spend-ing plans for lift trucks in the coming year are robust to say the least.”

Robust indeed. Out with old, in with the new appears to be the new rally cry. Ac-cording to our findings, 70% of respondents report that they’re likely to buy or lease in the next 12 to 24 months—that’s up from 58% from 2013. “If you mix the fact that spending is up and the number of trucks to be acquired is going up, it’s safe to con-clude that fleet owners have a newfound optimism,” adds Bond.

The desire for more sophisticated maintenance is also growing, reports Bond, further building on the positive trend. In his examination on the state of lift truck main-tenance best practices (page 50), he reports that traditional thinking is evaporating.

“As our top maintenance sources shared with me, improved data collection and anal-ysis have ushered in a new era of lift truck management best practices,” says Bond. “Savvy fleet managers are coupling mean-ingful data with better managed service to create predictive maintenance programs that create visibility and cut costs—and that’s where the next level of efficiency improvement is going to be found.”

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A RECENT SURVEY has found that more than half of e-commerce con-sumers (54%) are willing to pay at least 5% higher prices for products ordered online if they are deliv-ered in a sustainable way, and 76% would wait at least one extra day for climate-friendly transport.

These are among the fi ndings of the “Need for Green or Need for Speed Survey” commissioned by con-sulting fi rm West Monroe Partners. The survey went on to reveal that although consumers seem positive about greener deliv-ery, they are largely unaware such delivery options exist. Further, retailers supply virtually no green shipping choices in the course of e-commerce transactions.

Yves Leclerc, managing director of supply chain for West Monroe, recently told Modern that the results were surprising and chal-lenge the assumption that same-day delivery is the “holy grail” of e-commerce.

“This would lead us to believe that, if presented

with the option, consumers would pay a premium or wait longer,” he said. “The challenge today is for business-es to present the option and some visibility into the carbon footprint of various shipping methods. Based on the survey, if those options exist they will drive consumer behaviors.”

Leclerc said previous research has suggested that the carbon footprint of picking, packing and shipping an item next-day is as much as 30 times greater than if the consumer simply

drove to the store to buy the same item. Inside a distribution facility, the benefi ts of being able to postpone fulfi llment enables consolidation resulting in fewer miles per stop.

“Green shipping or sustainable shipping is not just about fi ve-day versus next-day shipping,” Leclerc clarifi ed. “It’s the total logistics transaction from the consumer order to delivery. Packaging, returnable containers, inventory holding strat-egy, consolidation, last-mile meth-odologies, all of it is folded into the concept of green shipping.”

Leclerc suggested that regula-tory impacts in coming years will likely force corporations to pursue

greener logistics, perhaps including electric- or natural gas-powered vehicles for last-mile delivery. “And, now we know what the consumer actually wants as opposed to assuming they want next- or same-day shipping,” he said. “We might now be facing the perfect storm where consumers, businesses and lawmakers are on the same page.”

In addition, the survey sought to understand how price tolerance varies across different demographics like age, income, educational

m m h . c o m MODERN MATERIALS HANDLING / A U G U S T 2 0 1 4 9

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BY JOSH BOND, ASSOCIATE EDITOR

RETAIL

The results of a recent survey challenge the assumption that same-day delivery is the “holy grail” of e-commerce.

Survey asks: Need for green or need for speed?CONSUMER PREFERENCES SUGGEST BUSINESSES SHOULD RECONSIDER CHASING THE AMAZON MODEL.

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The Power of Human Innovation

When the Delta-Q IC650 Charger passed its extensive reliability testing program with flying colors, we put it to more extreme tests. Despite being dropped off our roof, shaken in a paint shaker, and sprayed with a pressure washer, the charger kept on working. It’s that level of reliability that led three of the top battery manufacturers to choose the IC650 for on-board usage with their battery trays for Class III electric pallet trucks.

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level and geography. Interestingly, annual income was not an infl uential factor in consumers’ willingness to pay more for sustainable delivery. In fact, respondents who earn more than $100,000 a year were slightly less likely to accept higher prices for climate-friendly transport. “Just because consumers may have more disposable income,” he said, “they are not necessarily willing to part with it in the interests of sustainability.”

Similarly, age had only a minor impact on attitudes to-ward sustainability. In the survey, 18- to 25-year-olds were only slightly less likely to pay more for climate-friendly transport compared to 26- to 35-year-olds. More than half of respondents in all categories except ages 46 to 55 were willing to pay at least slightly more for sustainable delivery.

“Pioneering organizations have a tremendous op-portunity to shape customer behavior by implementing delivery practices that default to sustainable options rather than speedy ones,” Leclerc said. “Customers will thank them for it.”

MAPI REPORT

Global demographics play emerging role for manufacturersTHE ERA OF CONSTRAINED labor supply is just begin-ning, and the decreasing share of populations that are in the working age cohort will keep human capital a front-burner issue for goods producers for decades, accord-ing to a new Manufacturers Alliance for Productivity and Innovation (MAPI) report.

In “An Aging, Urbanizing World,” senior economist Cliff Waldman wrote that global population growth has been

slowing dramatically since the mid-1960s. In the latter half of the 1960s, average growth was 2.07% per year. The rate decelerated over the decades to an estimated 1.15% per year for the 2010 to 2015 period and is projected to fall below 1% after 2020.

“Population shifts are being felt very much in the present and are having a direct impact on the slow world rebound,” Waldman recently told Modern. “Manufacturers must understand how dramatic demographic changes intersect with economic activity and are reshaping the business climate in ways that would have been unimaginable just a decade ago.”

In an effort to curb the labor shortage, Waldman en-couraged companies to think of incoming employees as a raw material rather than a fi nished product. “They will not come with all the necessary skills to jump right in,” he

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said. “Instead, you will need to form training programs in your company. Go into schools and tell kids manufactur-ing is a good career. Not just once a year, but in the con-text of a real and consistent relationship with educators. Your company has to become a classroom. It’s not going to be easy, but it will be increasingly necessary.”

For the world as a whole, the 60 and older cohort share is climbing, from 9.2% in 1990 to 11.1% in 2010. Between 1990 and 2010, the share of this group in the more developed regions rose from 17.7% to 21.8%. “An increasing lifespan puts encumbrances on the public bud-get and social services,” added Waldman.

MANUFACTURING

Optimism on the rise for profits, hiring and investment NINE OUT OF 10 EXECUTIVES at small and mid-size manufacturing and distribution companies expect solid growth over the next 12 months, and two-thirds plan to add jobs during that period, according to the “2014

McGladrey Manufacturing and Distribution Monitor” survey.

The survey includes responses from more than 900 executives at small- and mid-sized U.S. manu-facturers and distributors, and provides an annual update on the state of middle-market compa-nies in the industrial sector. The percentage of companies who report they are thriving is at 36%,

up from 31% last year. Those who are “holding their own” is at 60%, meaning the number of companies who are declin-ing has dropped to just 4%.

While an already-healthy majority of executives (69%) reported increases in domestic sales over the past year, 88% expect the next 12 months to bring further growth, with an average projected increase of 8%. In addition, two-thirds (67%) reported that they expect their profi t (before taxes and interest) to rise over the next year, with nearly a quarter (24%) expecting increases of more than 10%.

The survey indicates that these expected bottom line improvements will also mean good things for the job market. Two-thirds of respondents (67%) indicated that they expect to hire more employees in the United States over the next year, up from 62% in 2013. The average expected increase in U.S. employees was 6%, up from 4% in 2013. Importantly, the number of executives expect-ing to cut back in U.S. employment dropped to 5% after hovering between 9% and 11% for the past three years.

The survey also asked executives how important it is to

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their brands that products are manufactured in the United States. A full 75% said it’s important or very important.

“That’s great news,” Karen Kurek, national industrial prod-ucts practice leader for McGladrey, recently told Modern. “In addition, several respondents said that when they make a product in the U.S. and then export it, that fact is positive for their brand and carries a premium across the world.”

As a result, the amount of offshoring has trended downward, while in the past two years about 8% of ex-ecutives reported they brought some manufacturing back to the U.S. In the next two years, Kurek said, 11% expect to bring manufacturing operations back from overseas.

3PL

U.S. 3PL revenue sees 3.2% increase, reports ArmstrongDESPITE VARIOUS FACTORS working against it, U.S. 2013 third-party logistics (3PL) gross revenue again saw annual gains, up 3.2% over 2012 at $146.4 billion, ac-cording to data released by supply chain consultancy Armstrong & Associates.

Armstrong said in the report that while global trade and economic activity serve as the “ultimate drivers” of 3PL mar-ket growth, the maturity of competitive service offerings and the size of major players contributes to slower growth rates.

Individual market segments showed: • Domestic transportation management (DTM) gross

revenue at $49.2 billion was up 8.4% year-over-year, and net revenue at $7.1 billion was up 11.3% year-over-year;

• International transportation management gross rev-enue at $46.2 billion was down 0.3% year-over-year, and net revenue at $18.0 billion was up 0.6% year-over-year;

• Dedicated contract carriage (DCC) gross revenue at $12 billion was up 3.3% year-over-year, and net revenue at $11.8 billion was up 3.3%;

• Value-added warehousing and distribution (VAWD) gross revenue at $35.9 billion was up 0.3% year-over-year, and net revenue at $27.7 billion was up 0.4% year-over-year; and

• Total 2013 3PL revenue at $146.4 billion was up 3.2%, with net revenue at $64.6 billion up 1.7% (this fi g-ure includes $3.1 billion for contract logistics software).

Armstrong & Associates president Evan Armstrong told Modern that his fi rm is expecting to see 2014 be up 5.2% over 2013 at an estimated $154 billion, which would repre-sent a better growth year. “Last year, growth in the sector was fairly anemic, with a lot of it due to the overall econ-omy still being fairly sluggish and slow Asia-to-U.S. trade volumes, as well as slow growth for freight forwarding and ocean freight, too,” he said. “We are starting to see a little bit of that turn around this year, but growth is still pretty slow in those segments.” �

16 a u g u s t 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com

LIFT TRUCK TIPS

Lift truck buyers and users share data and responsibility Aligning purchasing and operations yields savings and enhanced productivity.

Few lift trucks are used and maintained in the same ways they were just five years ago. Somewhere along the line, fleet owners started turning over stones to find a

surprising amount of money underneath, and soon they saw that clearing those stones was good for productivity. Just as the day-to-day usage of lift trucks has changed, so has the way an organization procures its equipment. Unfortunately, some of the boulders between operations and purchasing have proven a bit harder to move.

The challenge is centered on the concept of total cost of ownership, which factors in the initial price of a lift truck, its need for parts and service over its usable life, the costs associated with its operator, and more. Too often, the departments responsible for procuring equip-ment base their decisions almost exclusively on the initial price. The quality, capabilities and long-term costs of the lift truck are secondary concerns, even though they will have a daily impact on operations for years to come.

After spending five years in national accounts depart-ments, Jill Comer, vice president in the east region for Yale Materials Handling, says she witnessed increased customer interest in alignment between operations and procurement personnel. Without established best prac-tices for this collaboration, many businesses are building cross-functional teams tasked with learning as they go.

“We see customers sending procurement people to plants and distribution centers to see what’s happening operationally at a local level,” Comer says. “With opera-tions and finance on the same page, they’re looking very carefully at dealers to gauge how they will be able to provide the services they need.”

From a purchasing standpoint, a dealer’s recommenda-tion to upgrade a fleet’s taillights to a ruggedized pack-age might come off as a simple upsell. But if they have seen the amount of breakage and the costs associated with repairing them, that conversation might unfold differ-ently, Comer suggests.

From an operations standpoint, a fleet manager might want to hold on to lift trucks for seven years, based on, well, not much. “A financing person might explain that the way it benefits them the most is to have a replace-ment cycle and structure it as a lease,” Comer says. “They’ll find that the total cost of ownership is lower if replaced every five years.”

At the end of the day, it’s operations folks who live with the impact of leases, maintenance contracts and the like. However, the advent of pay-by-the-hour programs puts some additional power in their hands while still providing peace of mind for procurement people worried about the bottom line.

As opposed to a fixed 2,000-hour-per-year lease, if a customer uses 1,600 hours a year, that’s what they pay for. If they choose to walk away when they’ve reached their hour cap, or blow right by it, that’s fine, too.

“In any case, dealers should notify customers at least six months in advance that a lift truck will be coming off a lease,” Comer says. “That’s a great opportunity to start a conversation with the customer to see if they have any plans for expansion, movement, changes in operation, changes in load sizes, or different specifications.”

By Josh Bond, Associate Editor

Josh Bond is Modern’s associate editor and can be reached at [email protected]

The path to greater profitability is only five steps long.

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PACKAGING CORNER

In-line parcel scales offer advanced connectivity options Collecting the weight of packages on the fly yields better management, decision making.

By Sara Pearson Specter, Editor at Large

With the tremen-dous growth in e-commerce and

direct-to-consumer shipments, fast, accurate collection and transmission of accurate parcel weight information through an organization’s network has become critical.

That’s because today’s sophisticated parcel management software automatically associates a package’s identification code with its weight. The information is conveyed to a mainframe computer—either on-site or across the country at corporate headquarters—that determines the most cost-effective way to ship it based on distance and weight, says Mark Hudzinski, territory manager for Avery Weigh-Tronix. “Choices might include UPS, FedEx, DHL International, U.S. Postal Service or common carrier,” he says.

After passing by the scale, packages are diverted to different destinations associated with each shipper. “All of this has to happen within milliseconds, because production is all about throughput and how fast shipments can be sent out the door,” Hudzinski explains.

“The latest in-line, in-motion conveyor scales can collect a parcel’s weight at speeds as fast as 100 mil-liseconds,” says Ron Adams, Avery Weigh-Tronix’s sales manager. “They can weigh up to 200 parcels a minute.”

To capture each parcel’s weight, in-line, in-motion elec-tronic conveyor scales consist of two parts: a weighing mechanism and an indicator that displays and transmits the information. By U.S. law, all scale components—in-cluding those that transfer data—must be National Type

Evaluation Program (NTEP) certified (other countries follow similar standards). This ensures that an industrial device provides an accurate measurement of any item sold by weight, making it legal for trade.

The latest indicators provide multiple modes of con-nectivity, says Adams. “We now offer five different ways to connect our devices: Ethernet, USB, RS232 serial ports, Bluetooth wireless and analog.”

The different connectivity modes ensure that an indicator can communicate its captured weight data with both old and new technologies, including bar code readers, printers, and local and global data manage-ment networks. Ethernet is the most common these days, adds Hudzinski, because it supports network visibility for managers at all levels of an organization. “The data is critical for record keeping, to maximize cost efficiencies, and to give management a detailed overview of shipping productivity from any location,” he says.

Sara Pearson Specter is an editor at large with Modern and can be reached at [email protected].

20 A u g u s t 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com

MODERN system report

For deliveries that positively, absolutely have to get there, rail may not be the first mode of transporta-tion that comes to mind. Most of us think of freight trains lumbering across the prairie to deliver grain, coal or other commodities that get there when they get there. Yet, talk to Gordon Graham, senior manager of intermodal development for CN, and you learn that rail is now an integral link in today’s time-sensitive supply chains. “We’re not like your father’s train,” Graham explains. “Customers ship with us because of the quality of the level of ser-vice we provide.”

Service has become a critical enabler of CN’s success in recent years. “We are trying to grow opportunities by providing a reliable service that gets a container delivered when it’s committed to get it there,” Graham says. In fact, rail is increas-ingly an important link between trucks and ports in retail supply chains, just-in-time manufacturing and parcel delivery.

To make that transition, reliability is a key sell-ing point. A customer trusts that his containers will arrive at an intermodal terminal in time to be transferred from a rail car to a truck, or vice versa, to get to the next point in their journey on time. For that reason, the mobile cranes, also known as reach stackers, that handle containers at CN’s network of intermodal terminals have to be avail-able when they’re needed. To minimize downtime

and ensure that critical parts are available, CN has devel-oped a program with one of its mobile crane providers (Hyster, www.hyster.com) and their distributor (Wajax, www.wajax.com) to manage critical parts, especially expensive parts with long lead times.

Under the program, CN’s suppliers warehouse an inventory of mission-critical parts in quantities suf-ficient to keep CN in operation and in locations that allow for delivery in agreed-upon time frames, which could be relatively short to as long as 48 hours. The list of parts under the agreement ranges from com-ponents that can be easily swapped out and replaced during a repair up to and including a replacement mobile crane that’s available on short notice in the event of a serious equipment failure.

In addition, the distributor has assigned a key account manager and a master technician to work directly with CN, while factory engineers have trained CN mechanics to better service the equip-ment. CN looks to their suppliers’ expertise for rec-ommended solutions to address CN’s demanding application needs.

The program is an example of two important trends. The first is the increasing importance of maintenance, repair and overhaul (MRO) to the materials handling

By Bob Trebilcock, Executive Editor

Canada’s largest rail operator has developed a new parts management and maintenance program to reduce the downtime of mobile cranes at its intermodal terminals.

CN: Train keep a rollin’



industry, as systems become more time sensitive and complex, including automation in the distribution center and, in this case, yard equipment used in a port or terminal such as the mobile cranes employed by CN.

The second is that companies like CN are viewing their businesses from a broader supply chain perspective. As they look at ways to optimize an end-to-end process, they realize that inefficien-cies at any given node have an impact in other areas of the business. For that reason, they are looking beyond just the price of a piece of equipment or service to what the provider can bring to the table as a partner in the business.

That type of thinking has long been prevalent in equipment intensive industries, such as commercial avia-tion, mining, power plants and oil and gas refineries. In those industries, any

downtime has an immediate impact on customer service. Now, the real-time nature of just-in-time manufacturing, daily specials and next day/same day service is forcing transportation and logistics providers as well as e-com-merce retailers to rethink their MRO strategies.

“If what we do at CN is inefficient because of an equipment failure, our end customer is disadvantaged,” says Graham. “That reflects poorly on us, and it reflects poorly on our suppliers. For that reason, we have to be com-fortable with the level of support we receive from the component and ser-vice providers in our network.”

Reliability across the network As Canada’s largest railway, and one of the largest rail operators in North

America, CN operates 12 intermodal terminals in Canada and provides inter-modal service to 11 additional termi-nals in the United States.

At a high level, intermodal terminals serve a simple function: They accept, warehouse and ship containers loaded with freight. Freight arrives at a port in containers before moving by rail to an inland intermodal terminal where the containers are held pending place-ment on trucks. Similarly, containers for export are trucked to an intermodal terminal where they are placed on a rail car. “You need an intermodal terminal to make those transfers from rail to truck or truck to rail,” says Graham.

Mobile cranes, as they’re referred to by CN, handle the heavy lifting required to make those transfers. CN operates more than 75 mobile cranes

Photography by Allen McInnis/G

etty Images

CN’s fleet of more than 75 mobile stacker cranes

handles more than 3 million containers a

year, according to Gordon Graham (right), senior

manager of intermodal development.

22 A U G U S T 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com22 A U G U S T 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com


across its network in Canada, with addi-tional units in the United States. The equipment is put through its paces. A container can weigh more than 70,000 pounds, which puts a lot of stress on

the boom of the mobile crane. What’s more, the facilities operate 24/7, in all kinds of weather—including the bitter cold of a Canadian winter—and some-times travel long distances over undu-

lated and graveled surfaces. At some terminals, the mobile cranes operate more than 7,000 hours a year.

Despite a scheduled maintenance program, equipment still breaks down. “There are always going to be some unplanned maintenance events with any piece of equipment,” Graham says. The repairs themselves were not always the issue; rather, it was the availability of parts, especially for expensive parts such as the spreader attachment, drive axles and transmissions. “We maintain a stock of parts at our locations,” says Graham. “But it’s tough to keep a major structural part like a spreader at every location. At the same time, some of those parts are manufactured in Europe. They are expensive, they have a long manufactur-ing lead time and there’s a long transit time to get them shipped.”

For those parts, CN faced a Hobson’s choice: either tie up signifi-cant amounts of money in just-in-case

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24 A U G U S T 2 0 1 4 / MODERN MATERIALS HANDLING mmh.com


inventory that isn’t used very often or face very long lead times when a break-down occurs. While those expensive parts don’t fail very often, when one did, it was not unusual for a mobile crane

to be out of service for several months until a replacement part arrived. Instead, CN took a third approach and turned to its suppliers. “At the end of the day, we wanted to minimize the

impact of one of those events without having a lot of just-in-case equipment,” Graham explains. “What we were look-ing for was an equipment provider who understood the impact of downtime and would work with us to manage some of our parts inventory.”

A supply chain perspectivePartnering with a supplier also reflects CN’s supply chain focus in its opera-tions. “Price is no longer the sole con-sideration,” says Graham. “We want suppliers who stand behind their equipment across their organization, including their dealers and technicians. Our OEMs need to understand that we not only want their equipment, we want access to their expertise and their ideas.”

The inventory management program supporting CN’s intermodal terminals is a reflection of that collaboration. The rail operator prefers to have the OEM

CN’s equipment manufacturer and distributor manage an inventory of mission critical parts at strategic locations across the network.

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CN’s Intermodal Terminal Network The parts management program supports intermodal activities across a network of terminals in Canada and the United States. INTERMODAL TERMINALS, CANADA: 12INTERMODAL TERMINALS, UNITED STATES: 11ACTIVITY: Transfer containers between rail cars and trucks THROUGHPUT: CN handles more than 3 million containers annually across its network of inland container terminalsFLEET: CN operates a fleet of more than 75 mobile stacker cranes

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and its distributor directly engaged in the supply and service of its equipment. It is looking for access to master techni-cians who can service the account and provide specialized training for its mechanics as well as experts who can suggest ways CN could optimize its operations. In this manner both parties can work contribute to improve the overall supply chain.

Under the agreement, the OEM and distributor hold key inventory in Canada at locations such as the distributors’ local branches close to CN rail facilities. Inventory is also maintained at the OEMs distribution center in Danville, Ill., and other strategic locations based on a service level agreement.

Once the agreement was in place, the next step was to develop the list of the parts that needed to be maintained, in what quantity and in what locations. That process got under way in the spring of 2014. The starting point for the analysis was internal. CN has a maintenance team at each intermodal terminal that manages its own inventory and workforce. At the corporate level, CN has a centralized fleet management group with a network-wide view of inventory, the ability to provide a higher level of technical support and to analyze where and why parts fail and how failures might be mitigated in the future.

Working together, the two organizations developed a list of the required parts based on prior history. That list was then shared with the manufacturer to develop an inventory plan based on the parts required, the location of the terminals that needed to be serviced and the loca-tions managed by the OEM and distributor. “I understand that it’s not practical to keep a spreader attachment at every location,” says Graham. “At the same time, they don’t go down very often. So if we can get one in 24 or 48 hours, that’s sufficient.” In this agreement, for instance, only one spreader and one complete unit are maintained in inventory just in case.

“We haven’t had the need to pull the trigger on an emer-gency spreader or emergency crane as of yet,” Graham says. At the same time, the program and relationship illustrates the “stand behind our product and services” attitude that CN believes is crucial to its supply chain focus.

This program will serve as a model for similar programs CN is developing with other OEMs. “We’re no longer will-ing to buy a piece of equipment and take a chance on its reliability,” Graham says. “We want our OEMs to under-stand that if we’re not comfortable with the level of support they are willing to provide, it can cost them an order.” M


System suppliers MOBILE CONTAINER HANDLING CRANES: Hyster, hyster.com PARTS MANAGEMENT: Hyster, hyster.com; Wajax, wajax.com

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MODERN reader survey

2014 Lift Truck User Survey:

Lift Truck User Survey WebcastTuesday, August 26 at 2 p.m. ETGo to www.mmh.com/lifttruck14

Readers feel optimistic, ready to spend

mmh.com MODERN MATERIALS HANDLING / A u g u s t 2 0 1 4 31

In total, approximately howmany lift trucks are currentlyin use at your facility?

Source: Peerless Research Group (PRG)

14.2%Less than 3

29.9%3 to 9

15.8%10 to 14

11.9%15 to 24

11.6%25 to 49

6.1%50 to 99

10.0%100 or more

0.6%Don't know

Are you likely to buy or lease lift truckswithin the next 12-24 months?


2014 2013

Yes

No

58%

42%

69.6%

30.5%


With plans to buy a total of more than 1,100 lift trucks in coming months, readers share their perspectives on spending, maintenance practices and technology usage.

A common sell-ing point for the adoption of lift truck fleet management practices and

technologies is the idea of right-sizing a fleet. The assumption is that most fleets could stand to be as much as 10% smaller once under-utilized equip-ment has been identified and removed. But another key tenet of fleet management is rotation and retire-ment, which prevents aging lift trucks from consuming time and money they don’t deserve. Between trimming the fat, deploying state-of-the-art equipment, and riding an increasingly strong economic wave, our readers’ spending plans for lift trucks in the coming year are robust to say the least.

Modern’s annual “Lift Truck User Survey,” conducted by Peerless Research Group (PRG) in June, illustrates several facets of lift truck procurement, operation and maintenance. In recent years, the sur-vey has highlighted trends like the increas-ing dominance of electric lift trucks, the use of technology to track key metrics, and the growth of leasing and outsourced maintenance plans. But, it has never seen an increase in spending like this.

Out with the old, in with the newMany more respondents (70%) indi-cate they are likely to buy or lease in

the next 12 to 24 months, up from 58% last year. Spending is up across the board from last year, when more than half of those surveyed expected to spend less than $50,000 in the coming year. That number is now

down to 46%. Combined with a doubling (7% to 14%) of respondents who expect to spend more than $250,000, the average spend for the coming year has leapt up 26% to $158,000. The median spend also jumped from $33,150 to $58,100.

At the same time, the aver-age annual revenues of respon-dents’ companies went down 8%, while median revenues

dropped from $49 million to $37 million. The respondent base therefore reflects smaller companies that are looking to

How often do you typicallyreplace your lift truck(s)?


2.9%Less than 3 years

15.1%3 to lessthan 5 years



30.6%10 years or more

7.1%Other

4.5%Don't know


MODERN reader survey

invest heavily in their fleets.This year, 60% of respondents indi-

cated the economy has little or no

impact on how they acquire lift trucks, whereas 19% say the economy influ-ences their decisions to some extent and 21% say the economy impacts their decisions to a great extent. Given their spending plans in the coming months, fleet owners seem quite optimistic.

The average respondent operates a fleet of 24 lift trucks (median: 12) and plans to acquire an additional seven units in the next 24 months. Those who plan an outlay aim to purchase a combined 1,100 lift trucks in that time, with a quar-ter planning to buy between five and 19 units. About 9% will buy more than 20

trucks and 68% will buy four or fewer. Of new units pur-chased, two-thirds will replace old equipment, while the remainder will add to the total size of the fleet.

Maintaining productivityIn a series of new questions this year, we asked readers whether or not they operate a “core” fleet of regularly used lift trucks in addition to a less-utilized reserve fleet. About 42% of respon-

Lift Truck User Survey WebcastTuesday, August 26 at 2 p.m. ETGo to www.mmh.com/lifttruck14

Do you typically buy orlease your lift trucks?


Buy 59.2%

Lease 22.2%

Both 18.7%

Why do you buy your lift trucks?


It's cheaper/Cost

It's what we've always done 22.0%

We have low hour usage forour lift trucks

26.1%

It's our corporate policy 21.6%

Better ROI 24.1%

Strictly a financial decision/For accounting purposes

41.1%

24.1%

Other 5.8%

Why do you buy and lease your lift trucks?


Cost/Cash flow reasons

35.1%

Have a lease-to-buy program

26.3%

It depends on the situation:sometimes lease/sometimes buy

70.2%

Other

5.3%

Why do you lease your lift trucks?


Cash flow reasons 33.3%

Gives us flexibilitywhile reducing ourupfront investment

53.6%

Allows us to usecurrent technology 39.1%

It's our corporate policy 17.4%

Less maintenancecosts/Service is

included in our lease50.7%

It's what we'vealways done 11.6%

Other 5.8%


dents take this approach. For those who buy their lift trucks outright, 30% report the dealer takes an older unit when they drop off a new one. Another 20% hold on to old lift trucks even after they are replaced just in case they are needed, and 17% keep redundant units for parts. More than 50% resell the lift trucks that are replaced.

The number of respon-dents who typically lease lift trucks ticked up a bit, as they noted benefits like access to more current technology and improved cash flow. But the senti-ments of those who typi-cally buy outright have shifted. Last year, 37% of those who typically buy said they do so because it is cheaper. Now, only 24% believe that to be true.

Like last year, the same 41% have adopted, or plan to adopt, technology to help manage the fleet. However, in every category of metrics tracked (except labor management), more respondents are using the technology to manage things like maintenance his-tory (86%), the cost to maintain (75%), and safety (65%) including impacts and injuries. At the same time, satisfac-tion with fleet management programs has waned, with more than one in 10 reporting their implementation has been “not very” or “not at all” success-ful, nearly double since last year.

Flexing their buying powerWe asked respondents how likely they are to evaluate lift truck manufacturers whose lift trucks they are not currently using when adding new lift trucks to

their fleet. Last year, 16% of respondents said they were “very unlikely” or “not at all likely” to consider new sup-pliers, and that number has increased to 23%, indicating an increase in brand loyalty.

That said, respondents are certainly not becoming complacent when it comes to finding the right supplier. The number of respondents who work with a “short list” of approved vendors has increased from 36% last year to 53% this year. But the number of respondents who have had cause to remove a vendor from that short list is up from 17.5% to 28%. Poor service or product quality was by far the most com-monly cited reason for the removal, with some respon-dents noting “chronic over-charging” and one who sug-gested the service provider was “unable to migrate from simply selling equipment to helping manage the fleet.” M

Peerless Research Group (PRG)received a total of 310 qualified responses to this year’s survey. A qualified response was defined as an individual who was 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 (12%); general manufacturing (12%); wholesale trade/other non-manufacturing (11%); fabricated metals (10%); and automotive (8%).

Respondents were equally divided between manufacturing facilities (46%) and warehouses

and distribution centers (45%). The average facility employed 152 people.

Slightly more than half of respondents work at companies with less than $50 million in annual revenue; however, nearly 18% worked at facilities with more than $1 billion in revenue, including 9% at facilities with $5 billion or more. The average annual revenue is $795 million, with a median of $37 million.

Nearly 46% of the respondents planned to spend less than $50,000 in 2013 on lift trucks; however, 6% expected to spend more than $500,000 and another 7% plan to spend between $250,000 and $499,999 in 2013.

Who responded to our survey?

What are you tracking?


Age of trucks

65.5%

Level of utilization

64.6%

Maintenance history

86.4%

Cost to maintain

74.6%

Cost to operate (fuel/power consumption, training, etc.)

60.0%

Productivity levels

40.9%

Up-time

49.1%

Labor–Automated tracking vs. manual tracking

30.9%

Safety (including accidents, injuries, etc.)

64.6%

Other

0.9%

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Our list grows top heavy

following another big

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of relative calm, the

market is heating up

once again.


The past few years have been a roller coaster for the lift truck industry, which has proved inno-vative and resilient enough to rapidly overcome the tumult of the Great Recession. But the market is a far cry from its pre-downturn self,

as fleet management and a proliferation of new technolo-gies have reshaped how lift trucks are procured and used. Thankfully for all stakeholders, the market is now enjoy-

ing increased stability, as evidenced in Modern’s annual list of the Top 20 lift truck suppliers.

Brian Butler, chairman of the Industrial Truck Association (ITA) and president and CEO of Linde Material Handling North America, says last year’s strong 5% growth in unit sales is on track for a repeat perfor-mance. But the transactions will look very different as fleet owners increasingly value and quantify the impact of


MODERN special report

supplierslift truckTop

Class 2, Lift Code - 2

Order PickerClass 2, Lift Code - 3

Reach Type Outrigger


Side Loaders, Turret Trucks, Swing Mast and Convertible Turret/Stock Pickers


Low Lift Pallet and Platform (Rider)


Low Lift Platform

Top 20 industrial lift truck suppliers2013 Rank Company

2012 Rank

2012 Revenue (in millions)

2013 Revenue* (in millions) North American brands

1 Toyota Industries Corp. 1 $6,877 $7,706 Toyota, Raymond

2 KION Group 2 $6,250 $6,111 Linde

3 Jungheinrich AG 3 $2,995 $3,158 Sold in NA by Mitsubishi Nichiyu

4 Hyster-Yale Materials Handling 4 $2,469 $2,666 Hyster, Yale

5 Crown Equipment Corp. 5 $2,200 $2,400 Crown, Hamech

6 Mitsubishi Nichiyu Forklift Co. N/A $2,317 $1,956 Mitsubishi, CAT, Jungheinrich (NA only)

7 UniCarriers Americas Corp. 6 $1,900 $1,689 Nissan, TCM, Barrett, Atlet, UniCarriers

8 Anhui Forklift Truck Group Corp. 9 $976 $1,089 Heli

9 Hangcha Group Co. 11 $845 $998 HC, Hangcha

10 Komatsu Ltd. 7 $1,400 $900 Komatsu

11 Clark Material Handling International 12 $681 $708 Clark

12 Doosan Industrial Vehicle 13 $650** $707 Doosan

13 Hyundai Heavy Industries 14 $453 $477 Hyundai

14 Lonking Forklift Co. N/A $157 $198 Lonking

15 Tailift 15 $166** $181 Tailift, World-Lift

16 Combilift 16 $144 $170 Combilift

17 Hubtex 17 $99** $108 Hubtex

18 Hytsu 18 $75** $82 Hytsu

19 Godrej & Boyce Manufacturing 19 $70** $76 Not available in North America

20 Paletrans Equipment 20 $63** $69 Paletrans

*Fiscal year 2013 worldwide sales revenue - Figure based on foreign exchanges rates as of 12/31/13**Figures based on industry estimates




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

ITA’s lift truck classifications

a lift truck on the entire business. Butler suggests the changing and deepening relationship between suppli-ers and end-users is not unique to the lift truck market.

“Customers are becoming smarter about materials handling in general,” Butler says. “They will continue to be diligent about managing their businesses, but 2009 opened a lot of people’s eyes. They’re looking harder at a huge wealth of opportunities and longer-term solutions.”

Traditionally, a business might spend in some areas and squeeze others, Butler says. Lift trucks were often among the first places to see spending cuts, but increased visibility into total cost of ownership has exposed the true costs of maintaining aging equipment. “Investment in a fleet is a way to improve productivity,” Butler says. “We find some customers are buying units earlier or in greater numbers because they can actually see savings while improving productivity. For those who haven’t bought a lift truck in the last five years, there are a lot of things they might not be aware of, but all OEMs are prepared to have those discussions.”

Growth by regionThe Worldwide Industrial Truck Statistics (WITS) organization tracks quarterly and monthly statis-

tics on lift truck sales, and is compiled by six trade groups based in North America, Brazil, Japan, Korea, Europe and China. According to the 2013 WITS fig-ures, global orders increased by 7% from 944,405 to 1,009,777. This follows a 3% decline in orders in 2012. Shipments were up 5% after staying level from 2011 to 2012.

Since 2008, shipments to the Asia region have increased 46%, while shipments to the Americas rose 6% over the same period. Europe’s shipments have yet to recover from the losses of the recession, with ship-ments down a total of 21% since 2008. Globally, ship-ments are up 7% in the last seven years. Highlights of the 2013 WITS figures include:

• The Americas posted the strongest growth in ship-ments at 238,455 units, up more than 8% year over year and following a 6% increase last year. According to figures from the ITA, 172,073 units of Class 1 through 5 lift trucks were United States sales, as compared to 153,083 units in 2012, an increase of more than 12%.

• After a near 15% growth rate in orders and ship-ments last year, Africa has fallen by 6% and 5% respec-tively. A total of 18,903 units were shipped to African countries in 2013.

Worldwide lift truck market

Region

Orders Shipments

2012 2013 % Increase 2012 2013 % Increase

Europe (53 countries/territories) 310,503 315,455 1.59% 317,726 316,534 -0.38%

Americas (55 countries/territories) 229,746 253,096 10.16% 220,069 238,455 8.35%

Asia (43 countries/territories) 362,911 401,252 10.56% 363,816 394,054 8.31%

Africa (56 countries/territories) 20,185 18,960 -6.07% 19,816 18,903 -4.61%

Oceania (29 countries/territories) 21,060 21,014 -0.22% 22,297 20,835 -6.56%

Total (236 countries/territories) 944,405 1,009,777 6.92% 943,724 988,781 4.77%Source: These figures are provided by the World Industrial Truck Statistics (WITS) organization.




Low Lift Walkie Pallet


Tractors (Draw Bar Pull Under 999 lbs.)


Low Lift Walkie/Center Control


Reach Type Outrigger


High Lift Straddle

ITA class of trucks manufactured

World headquarters 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 x

Cleveland, Ohio x x x x x

New Bremen, Ohio x x x x x

Kyoto, Japan x x x x x

Tokyo, Japan x x x x x

Hefei, Anhui, China x x x x x

Hangzhou, China x x x x x

Tokyo, Japan 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

Shanghai, China x x x x

Taichung, Taiwan x x x x

Monaghan, Ireland x x x

Fulda, Germany x x x x x

Shanghai, China x x x x x

Mumbai, India x x x x x

Cravinhos, Brazil x x




High Lift Counterbalanced

• In Oceania (Australia and nearby islands), ship-ments were also up better than 15% in 2012, but have since fallen by 6% to just 20,835 units in 2013.

• After Asia saw a slight decline for 2012 in orders (-4.4%) and shipments (-2.6%), in 2013 the region saw the largest increase in orders (10.6%) and second-largest increase in shipments (8%). Shipments to the region totaled 394,054, accounting for 40% of global shipments.

• Europe’s orders fell 6% in 2012, but held relatively level in 2013 with shipments down less than half a per-cent and orders up 1.6%.

The Top 10With revenues up 12%, Toyota Industries Corp. is once again No. 1 on our list, pulling further ahead of Kion Group. Toyota’s revenues of $7.7 billion are $1.6 bil-lion more than Kion’s $6.11 billion, with the leader’s revenues 26% larger. In 2011, Toyota was 5% ahead of Kion.

Outlining the factors behind the increased rev-enues, Toyota executives cited the 2013 acquisition of Cascade Corp., a major manufacturer of lift truck attachments, and the launch of the new Toyota 8-Series

lift truck line with new large capacity models and two new engines. “These activities led to an increase in unit sales worldwide,” a statement released by Toyota said. “The markets in China and North America registered growth, the European market showed a recovery, and the Japanese market maintained solid sales.”

Though Kion’s 2013 revenues dipped slightly, the numbers follow 12% growth of nearly three quarters of a billion dollars between 2011 and 2012. In a state-ment, Gordon Riske, CEO of the Kion Group, said “we now want to take advantage of the economic recovery in Western Europe, expand our excellent position in emerging markets, further strengthen sales and service and increase our profitability yet again. New products and our successful modular and platform strategy will play a key role in this respect.”

The rest of the top five held their rankings from last year, with Jungheinrich ranking third after posting 5% growth to $3.16 billion. Hyster-Yale Materials Handling again ranked fourth, and following a slight drop in rev-enues in 2012 has bounced back with 8% growth to $2.66 billion. Crown Equipment rounded out the top 5 with 9% growth to $2.4 billion.

In its first appearance on our list, Mitsubishi Nichiyu


Low Lift Walkie/Rider Pallet


Fork, Counterbalanced (Cushion Tire)


Fork, Counterbalanced (Pneumatic Tire)

The Industrial Truck Association (ITA, www.indtrk.org) 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 mostly classes 1 through 5 are used in materials handling applications inside the four walls, Modern has only specified those on our table.

ITA’s lift truck classes



claimed sixth place with $1.96 billion. The company previously reported separately as Mitsubishi Caterpillar Forklift (ranked eighth last year) and Nippon Yusoki (ranked tenth last year). The companies’ individual rev-enues last year totaled $2.3 billion. Reporting jointly, the company bumps UniCarriers down one position and makes room for Hangcha to join the Top 10.

Seventh-place finisher UniCarriers is the result of a 2012 merger between Nissan Forklift and TCM, who have previously been ranked eighth and eleventh place, respectively. In its second year on our list, UniCarriers reported revenues of $1.69 billion, an 11% decrease from 2012, which had seen a 9% increase over Nissan’s and TCM’s individual revenues. It’s worth noting that foreign exchange rates impact all members of the Top 20 list. In the case of UniCarriers, sales in yen were actually up 9% before converting to dollars.

Following a slight decline in revenues last year, Anhui Forklift, the Chinese makers of Heli fork-lifts, reported revenues of $1.09 billion, a nearly 12% increase. Becoming the second Chinese company in the Top 10, Hangcha Group also saw a slight decrease in revenues in 2012. In 2013, the company reported 18% growth to come just $2 million shy of $1 billion in revenues.

Rounding out the top 10 is Komatsu, which posted the largest percentage increase on last year’s list after revenues spiked 27% from 2011 to 2012. The com-pany fell short of that $1.4 billion high water mark this year with $900 million, but that number is on par with 2010 and 2011 revenues and 20% higher than the company’s 2009 earnings. And again, the conversion from yen to dollars also played a role in Komatsu’s earnings.

Breaking down the Top 20Last year, the TCM/Nissan merger shook things up for the top half of the list. This year it’s the merger of Mitsubishi Heavy Industries and Nippon Yusoki into Mitsubishi Nichiyu. With all the consolidation at the top, it could take more than $1 billion in revenues to crack the Top 10 next year. In 2010, that feat took only about $600 million.

In 2012, before Mitsubishi’s merger, the combined revenues for the lower half of the list were $3.2 billion, a 9% increase from the prior year. This year, companies ranked 11 through 20 reported a total of $2.78 billion, a nearly 14% decrease. This reflects the ongoing consoli-dation at the top of the list.

Earnings of the 2013 Top 20 list total $31.45 billion, a 2.2% increase. Only four companies saw revenues fall in 2013—all of them in the Top 10—but each had enjoyed a banner year in 2012. Despite the fact that those four companies reported a combined $1.2 billion less than in 2012, the Top 10 still collected more than $28.7 billion in revenues in 2013, about $1.4 billion more than in 2012. In 2011, the Top 10 accounted for about $24 billion, meaning the top half of the list has grown by almost 20% in two years.

The Top 5, all of which are the same as last year, have fared well, growing by a combined $1.25 billion, or 6%. The Top 5’s revenues now account for 70% of the Top 20’s total revenues.

Standout performances in terms of year-over-year growth include a 26% surge for China’s Lonking, as well as 18% increases for both ninth-ranked Hangcha and No. 16 Combilift.

Notable performances since 2009Aside from the recession, factors such as currency conversion rates and restructurings can influence a comparison of revenues over the past five years. That said, in its five consecutive years at the top of our list, Toyota’s revenues have grown by 68%. Holding firm to second place over the same period, Kion’s 2013 rev-enues are 50% larger.

Clark and Combilift have each boosted revenues by 75% since 2009, but the largest growth is from Hyundai, whose 2013 reported revenues are exactly twice those claimed five years ago. Hyster-Yale and Crown have spent the past five years exchanging fourth and fifth place, with the former growing 78% in that time. Crown is up 50% over the same period. �



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 Association’s seven truck classes: electric motor rider; electric motor hand trucks; internal combus-tion 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, 2013 exchange rate.

How the suppliers are ranked

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MODERN equipment report

Hydrogen fuel cell lift truck technology has caught on at DCs with large fleets running multiple shifts per day, thanks

mainly to the quick fueling capability of the fuel cells.

WBy Roberto Michel, Editor at Large

With use by Walmart, BMW and other large, 24/7 facility operators, hydrogen-powered lift trucks are proven at the higher end of the market, but can they catch on elsewhere? Fuel cell providers are betting that turnkey, streamlined offerings will help.

Elevating the fuel cell lift truck market

hen a materials handling technology keeps landing big wins with marquee customers such as Walmart and can boast productivity benefits, it seems its destiny is one of explosive growth. But even though hydrogen fuel cell-powered lift truck solutions have plenty working in their favor, there are reasons to be guarded about their potential for making huge inroads in the market.

Hydrogen fuel cell lift trucks have been around for several years, offering a compelling alternative to conventional electric lift trucks, which use lead acid batteries, especially for larger fleets running multiple shifts per day. The main advantage lies in the time savings for refueling a fuel cell lift truck versus a battery swap for a conventional truck. Multiply the savings by three shifts a day, and the time savings add up.


Fuel cell lift trucks require supporting equipment for fuel dispensing and refueling. While the pumps take up some room inside a DC, facilities that have made the switch to all fuel cell trucks can do away with large battery rooms.


Fuel cell-powered lift trucks also do away with battery rooms and have other advantages, such as no power degra-dation over the course of a shift. These widely recognized advantages have helped fuel cells garner some impressive customer wins, including when Plug Power announced ear-lier this year that Walmart would be expanding its use of fuel cells by more than 1,700 trucks over two years.

So what’s holding fuel cells back from claiming a bigger chunk of the market? For one thing, there is the high cost of the cells and the supporting infrastructure, which can make the technology hard to justify for smaller operations that aren’t running multiple shifts. So while fuel cell solution pro-viders are growing their sales, they have yet to capture a big share of the market.

“Hydrogen fuel cells, when you look at the total numbers of lift trucks sold, still have very small penetration, at most maybe 1% of the market,” says Mike Deneen, a senior indus-try analyst with the research firm Freedonia Group. “The technology is still relatively new; it’s expensive; and there is the cost of the infrastructure to consider,” he adds. “Right now, it remains something that the bigger players and the bigger fleet operations are going to be more attracted to.”

Then there are other hurdles to broad adoption, such as competition in the form of other technologies like lith-ium ion batteries, and efficiency improvements to con-ventional electric lift trucks, such as regenerative braking. Additionally, the federal tax credit on fuel cells is set to expire at the end of 2016.

The fuel cell solution providers, however, say the future looks good for hydrogen lift trucks. They see more facilities, even modest-sized ones, being able to take advantage of the productivity benefits. The reason for this is not so much a huge breakthrough in fuel cell costs, but rather turnkey approaches by vendors to make the fuel cell transition more streamlined and free of upfront costs. When you combine this turnkey approach with steady improvements in the technology and the inroads that fuel cells are starting to make in the automotive market, the outlook for fuel cell lift trucks remains strong.

Simplifying the transitionTo gain the rapid refueling benefit of fuel cells, warehouse managers first have to consider the cost, installation, mainte-nance and fuel delivery concerns involved in keeping a fleet of fuel cell lift trucks humming along. Suppliers are address-ing these cost concerns with turnkey approaches, which are leading to customer wins.

Plug Power’s agreement with Walmart for more than 1,700 fuel cell lift trucks at six facilities over two years is a good example of the attractiveness of the turnkey approach, says Keith Schmid, COO of Plug Power. The “framework agreement” with Walmart, he notes, was for



Plug’s GenKey offering, which spans fuel cells, preventative care services, and hydrogen fueling infrastructure. Under the agreement, Walmart can add additional sites under the same terms, and recently did just that by adding a seventh site to the agreement, says Schmid.

“I think what is really starting to drive our share and penetration of the market is our total turnkey offering, which we call GenKey,” says Schmid. “The customer can essentially place the entire transition into our hands, and know that they have a trusted partner that will execute it.”

Already, Schmid adds, Plug’s fuel cells and infrastructure are an attrac-tive option for multi-shift facilities with fleets of 50 trucks or more, but the turnkey approach will further simplify customer concerns about complexity, whether it be a more modestly sized fleet, or a mega facility with well more than 100 vehicles.

“We make that transition seamless for the customer so that the customer need not manage the construction pro-cess; they need not manage a separate industrial gas supplier; they need not

manage a separate hydrogen infrastruc-ture and fueling station partner, as well as a fuel cell provider,” he says. “We take care of all of that.”

Warehouses with fewer than 25 lift trucks are not a focus for Plug Power currently, says Schmid, with the main focus being on sites with 50-plus vehi-cles. However, since some of Plug’s major customers also have large retail outlets with materials handling needs, the company is looking at ways to make the fuel infrastructure viable for use at the retail level. “Our customers are actually asking us to follow them into their retail storefronts, so as we move forward, that definitely is part of the target market for Plug,” says Schmid.

Other ways that Plug Power has looked to expand its market reach has been through a joint venture to address international markets. It also has intro-duced a new, large fuel cell option, the GenDrive 1900, capable of powering large lift trucks often used in manufac-turing settings.

Expanding the sweet spotDespite some high-profile wins for fuel cell lift trucks, the technology only rep-

resents a small portion of the lift truck market. Overall, the U.S. lift truck mar-ket moved about 200,000 units in 2013, with fuel cell lift trucks comprising only about 1,000 to 1,500 of those units, says Deneen. And, even though 2014 is shap-ing up as a much stronger year, closer to 3,000 fuel cell lift trucks in North America, he adds, it still amounts to only a small slice of the overall market.

To expand, one way the fuel cell lift truck suppliers need to go is downward into modestly sized facilities. Since the cost of fuel cells isn’t dropping dramatically, one way of doing this is by reducing the infrastructure burden.

By providing facilities with an on-site hydrogen generation capability so that liquid hydrogen doesn’t have to be delivered and stored, Nuvera Fuel Cells simplifies the use of fuel cell lift trucks for relatively smaller opera-tions, according to Gus Block, director of marketing for Nuvera. With on-site generation, a distribution center con-suming around 25 to 50 kilograms (kg) of hydrogen per day can tap the ben-efits of fuel cell lift trucks.

“We offer an on-site solution that generates hydrogen from natural gas and water, and what this does is provide an economical source of hydrogen at a smaller scale,” Block says.

Nuvera’s hydrogen generation equipment uses steam methane reforming to produce up to 50 kg per day of hydrogen on demand. Multiple units can be combined to scale up to handle applications consuming as much as 250 kg per day. At the other end of the scale, Nuvera’s 50 kg/per day generation system can operate at a 50% turndown rate, generating 25 kg of fuel per day. The approach is said to be economical, in part because of the compact equipment, but also because it uses a facility’s existing natural gas and water supply to produce fuel.

The infrastructure consists of a modular generation, compression and storage unit that fits on a compact pad outside a facility, with dispensers designed to be located indoors at a

On-site hydrogen generation solutions are an alternative to having hydrogen trucked in and stored in tanks.

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First, you need an industry leading expert who can provide the information you need to make the right decisions. Then, you need innovative solutions – not just batteries and chargers – but proven programs and solutions to manage them effi ciently and cost effectively for your operation. And fi nally, you need inspiration to see the future of motive power so the choices you make now will carry you into the future.

As the world leader in motive power technologies, EnerSys® can provide it all.

To learn more about the ways EnerSys can transform your distribution, production and warehouse operations, call 1-800-EnerSys or visit us at www.enersys.com.

©2014 EnerSys. All rights reserved. Trademarks and logos are the property of EnerSys and its affi liates unless otherwise noted. Subject to revision without prior notice. E.&O.E.

I N F O R M A T I O N • I N N O V A T I O N • I N S P I R A T I O N

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convenient refueling spot. Nuvera handles the installation and maintenance of the gear, says Block, and offers leasing to defray upfront costs.

“You don’t need as big a footprint for on-site generation as you would for delivered liquid hydrogen,” says Block. “And, because you don’t have that on-site storage for liquid hydrogen, you don’t need as much offset from the building, which makes the permitting process easier. When you combine all these factors, we definitely see on-site generation as an economical way of getting hydrogen at that smaller scale of use.”

Nuvera’s on-site hydrogen generation system has been used by some relatively modest-sized fleets. For example, says Block, one fleet has seven reach trucks and 10 pallet jacks, consuming about 25 kg of hydrogen in 24 hours. Essentially, says Block, it’s a misperception to think that hydrogen fuel cell lift trucks are only a fit for mega warehouses with fleets exceeding 100 lift trucks.

For example, last July, Nuvera announced that Ace Hardware selected Nuvera and its PowerTap onsite hydro-gen generation and refueling solution for a retail support center in Wilmer, Texas. Plug Power is the fuel cell pro-vider for that implementation, which uses Raymond lift trucks. According to Plug Power, that deployment will involve 65 GenDrive fuel cell units.

Typically, add Block, smaller sites using on-site hydrogen generation are running multiple shifts, because this is where the rapid refueling and asso-ciated productivity benefits come into play. “If you’re not running multiple shifts and needing to change out batter-ies, you would probably not be looking at fuel cells,” he says.

Lift from automotiveTo date, the materials handling market has been ahead of the automotive mar-ket in terms of shipping commercially available products that use hydrogen fuel cells as their main power plant, but lately, the automotive market is starting to announce products. Toyota

announced in June that it would launch a fuel cell-powered sedan in Japan before April 2015, with launches in the U.S. and European markets planned for the summer of 2015.

The Toyota fuel cell sedan would join the 2015 Hyundai Tucson SUV which is already is avail-able in small quantities in the California market. GM also has test fleet of fuel cell-powered SUVs. To some vendors serving the materials handling market, the advent of fuel cell motor vehicles is bound to help fuel cell use in the industrial mar-ket by contributing to economies of scale.

Micheal Ciotti, a prin-cipal equipment engineer for hydrogen fueling with Linde North America, says fuel cell-powered automobiles should accel-erate the buildup of hydrogen infrastructure, and reinforce acceptance of the technology. Linde provides liquid hydrogen to industrial customers, working closely with fuel cell suppliers such as Plug Power. While Linde does not yet have a customer who is using fuel cell lift trucks at a site and also plans on fueling a fleet of hydrogen-powered cars, such a scenario could be possible in a market like California. “The more uses you can find at one site for the fueling infrastructure the more economic sense it makes,” Ciotti says.

Schmid agrees that automotive use of fuel cells will be good for the indus-trial side of the market. “Volume in the entire industry, both automotive and by other fuel cell manufacturers, will help bring components and fuel cell materials down on the cost curve,” he says.

For now, providers of fuel cell lift

truck systems are focused on simplify-ing the transition to fuel cells for end users, making it more attractive to mid-sized, multi-shift sites, while also growing from repeat wins from large, existing customers. As Deenen notes, “Companies are doing some repeat buy-ing, and with any new technology, that’s key, because it indicates the technology is working.” M

Companies mentioned in this articleFREEDONIA GROUP: freedoniagroup.comLINDE: linde.comNUVERA: nuvera.comPLUG POWER: plugpower.com

Refueling is similar to refueling a gas-powered engine—the nozzle fits right into a tank opening. Depending on the fuel cell model, refueling typically can be done in two minutes or less.

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MODERN information management

Traditional thinking about lift truck maintenance is rapidly breaking down. In the face of readily available data and proven techniques for cutting waste from costs once assumed to be unavoidable, fleet managers and service providers are work-ing to introduce discipline to fleet maintenance practices.

The transition is evident in the popularity of outsourced maintenance arrangements. According to Modern’s annual “2014 Lift Truck User Survey” (p. 30), only a third of fleet maintenance is handled by in-house staff, 42% is outsourced to lift truck dealers, and another 21% is outsourced to third-party contractors. The appeal of outsourcing includes the cus-tomer’s ability to focus on core competencies as opposed to managing its own parts, technician training and service events. But it’s not as simple as signing a contract and walking away.

“To wash your hands of fleet maintenance is to say you want to ignore waste,” says Mike McKean, fleet management sales and marketing manager for Toyota Material Handling USA. “You’ve got 40 other things to do that don’t involve what it takes to run a fleet. There are operations where they are so busy and so lean they are very grateful just to have a forklift or a technician to do repairs.”

Some companies with in-house technicians like knowing someone is on hand to address a forklift when it goes down. “These are the kind of companies who typically don’t track


Once seen as a necessary evil, lift truck maintenance costs prove ripe for efficiencies that save money and boost productivity.

Lift truck maintenance: Real time is real money

Planned maintenance can prevent the huge waste associated with only repairing as needed.



utilization in the first place,” says McKean, who adds that this approach is typically based on reactionary rather than planned maintenance (PM). “They think they have some sort of PM plan, but they probably tend to run equipment to death and repair as needed.”

The industry is moving to a point where data and well-coordinated service allows predictive maintenance. Jerry Sytsma, general manager at Rapidparts, an affiliate of Mitsubishi Caterpillar Forklift America, says the goal is to move from diagnostics to prognostics.

Quality of service, cost of service and downtime are the three key concerns, says Sytsma, adding that they are weighted fairly evenly. But while many fleet expenses are understood as little more than top-level budget lines, it is vis-ibility into individual events that highlights the best opportu-nities for improvement.

Accounting for accountabilityOutsourcing maintenance is not a guaranteed fix for a fleet’s maintenance shortcomings, nor is it a guaranteed cash cow for the dealer or third party. The structure of an agreement should promote accountability—and subsequent changes in behavior—for both stakeholders.

Sytsma offered the example of a large customer who regu-larly battled with its lift truck dealer over warranty claims related to transmission failures. After installing sensors that enabled remote monitoring, the dealer was able to collect data about each instance that a lift truck operator switched

from forward to reverse without coming to a full stop. The system logged more than 2,000 events on an operator-by-operator basis each time they switched gears at 3 miles per hour or more. Within 30 days, Sytsma says, virtually all trans-mission failures halted.

This story illustrates how data can take the guesswork out of identifying costs and their root causes, in turn benefit-ing the customer and service provider. In years past, it was difficult to get a sense of the true cost of maintenance, if identifying that cost was even a priority. It was also a chal-lenge to vet and verify the performance of a service provider. Although a lift truck dealer is most likely to have technicians with up-to-date training, these sorts of capabilities should not be assumed.

One of the best performance indicators, says Sytsma, is first-time repair rate, or the ratio of service events that are suc-cessfully resolved on the technician’s first visit. “It’s a great way to measure either the technician’s capabilities or the dealer’s commitment to parts inventory,” he says. “If a technician has to come back, between travel, setup and downtime, that can create 20% to 50% inefficiency right off the bat. One in five times is not bad, but if it takes two trips 75% of the time, that’s a problem.”

Pairing lift truck operators with a dedicated piece of

In-house maintenance is rarely the most efficient approach, but outsourcing maintenance doesn’t guarantee success.



equipment is an effective way of boost-ing accountability while addressing pre-ventable damage, according to Russell Wells, senior national accounts man-ager at Kenco Fleet Services. Some fleet management technologies enable immediate coupling of service work orders with pre-shift checklists to track damage back to an individual. “Any fleet should rely on operators to keep a keen eye for torn seats, hydraulic leaks, bent forks, you name it,” says Wells. “This can drastically reduce abuse. We have seen sites reduce these costs by nearly 100%.”

To take accountability a step further, some who have outsourced lift truck maintenance, HVAC maintenance or other services are looking to unite all

services and related metrics under a single third party. Pat DeSutter, director of fleet management for Hyster, notes a proliferation of third parties aimed at organizing service providers. “Large customers with many locations like working with a single partner who can provide a system solution to oversee all of these categories,” says DeSutter. “Available technology makes it possible to bring all the data together, and we’ve even seen previously specialized service providers working to manage it all.”

Buyer buy-inAn overarching third-party maintenance provider might also make life easier for purchasers, but just as with the connec-tion between operators and technicians,

Visibility into each service event can reveal the root cause of costs that previously seemed unavoidable.

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purchasers can’t be too removed from the impacts of their decisions. “Often they make one decision for an asset and then they are no longer involved,” says Toyota’s McKean. “A customer might lease a forklift with a full maintenance plan and walk away. They enjoy locked-in payments with the only other expenses being variable and avoidable damage not covered in the contract. That’s old school. A better way to manage a fleet is through a PM program based on utiliza-tion. This will provide data to lean the fleet and understand peak or seasonal periods where short-term rentals make more sense than a long-term, under-uti-lized lease.”

Based on accurate utilization data, McKean says most companies will find their fleets are larger than needed. “There’s probably an easy 10% fleet reduction once you start measuring,” he says. “But you can never prove that until you get data in front of management.”

A proactive, real-time approach to fleet costs can help address small prob-lems before they become big issues.

Over time, trends can help inform budgets based on consumption not cal-endars. “How can you budget for your

As lift trucks have become more sophisticated, so has the process of training technicians and diagnosing problems.

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fleet when you don’t know what your real costs are?” asks Wells. “That might not be a ‘real’ number, but is instead based on something you did before.”

Uptime and cost per hour used to be the main metrics for maintenance, according to Steven LaFevers, telemat-ics solutions manager for Yale Materials Handling. “That’s not nearly enough now,” he says. That approach will sug-gest that during slow times a fleet enjoys a better cost per hour, which worsens during busy times. When look-ing at cost drivers, it’s important to find the root cause, LaFevers says. There is value in drilling down into the opera-tion by operator, by utilization across units for like activities, and other key details. “Fleet management is not just about the cost of the lift truck, but its use as well,” he says. “There’s a pitch and a swing; data gives you the pitch, but you better be ready to swing.”

By collecting and analyzing data,

a business can make more informed decisions on the way to break everything down to cost per hour—which is not a matter of dividing annual maintenance spend by the hours on a lease. Instead, each part should be accounted for. “Customers can get to the point where they have the OEM recommended parts stock list that allows them to not have as much capital investment or space tied up in inventory,” Wells says. “With only needed parts on hand, we’ve seen inventories cut by as much as half.”

First, Hyster’s DeSutter recommends the creation of a good, clean inventory of assets by department and usage. “Sit down with the controller, maintenance management or facilities management and make them all part of the process,” he says. “What do you want to manage? Is it possible to know how long an asset is down, the repair time associated with that event and the parts consumed? The goal is to improve uptime, thus productiv-

ity and throughput. It can be a different kind of conversation than execution and procurement are used to, but common ground for a huge spend should not be hard to establish.”

Diagnosing the problem, seeking appropriate careWith common ground defined within an organization, the process of securing the right service provider can be greatly simplified. While it is not necessary for either the customer or the dealer to use technology and telematics, any data collected will help prevent waste and downtime.

“A lot of time, downtime is just wait-ing on approvals for service,” LaFevers says. “With detailed information, you can make those decisions quickly and optimally. The business justification now takes seconds. Otherwise, it might be a series of weekly gut-level decisions to see if you have the money or if the lift truck is worth it. Whether for a fleet of seven trucks or 70, gut decisions are still very common.”

Clark Simpson, product marketing engineer for Clark Material Handling, warns that even with visibility and a capable partner, outsourced mainte-nance agreements still present the opportunity for pitfalls. “A customer might contract fleet maintenance by the month, but the worry is they are giv-ing the service provider a blank check,” Simpson says. “Instead, some will accept the lowest bid and then it’s in the

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third party’s best interest to do the least amount of work. This can be kind of an ugly deal.”

Within each service event, the issue of proper diagnosis is another key hurdle. “Often a ser-vice provider doesn’t get paid to diagnose,” he says. “For instance, a wiring issue can eat up sev-eral hours of a technician’s time, resulting in a big cost the provider hadn’t planned for.”

The increasing complexity of lift trucks compounds the prob-lem. In years past, checking the spark or fuel would be enough to get a lift truck back up and run-ning. “Just within one OEM it has changed from a simple carburetor to four different fuel systems,” Simpson says. “You have crank sensors, map sensors, O2 sensors. Each can cause a no-go and there might not be easy ways to spot them.”

When bundled with leases, fleet maintenance programs can include some very troublesome fine print. For example, some lessees have suffered at the end of a lease when a unit needs $2,000 of repairs to reach the agreed-upon residual. A

10-truck user could be looking at $10,000 to $15,000 at end of lease, which the dealer might forgive in exchange for renew-ing a deal.

“Both customers and deal-ers should understand trans-parency as a way to gain trust,” says MCFA’s Sytsma. “This profession, whether automo-tive or for lift trucks, has a public perception that cus-tomers can never really know if they’re paying too much.”

McKean suggests three ini-tial steps to improve the likeli-hood of success. First, check an existing maintenance plan

for efficiency and quantify the mainte-nance spend. Second, analyze if dedi-cated in-house labor is cost effective as compared to as-needed labor. Third, look to demo a telematics system to see what additional data reveals. M


Any fleet maintenance program should include accountability for operators, purchasers and service providers.

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Direct-to-consumer marketer optimizes order picking through gradual automation.


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Swanson Health Products (SHP) is a leading direct-to-consumer marketer of dietary supple-

ments and other health products serving millions worldwide through mail-order catalogs and the Web. Following a significant growth in market demand resulting in a rapid expansion of the product range, the company began a comprehensive remodeling of its order picking processes. By phasing in a series of high-density, goods-to-person storage and pick mod-ules, the company reduced labor costs, lowered per order costs and shortened delivery times.

SHP operates a 140,000-square-foot warehouse in Fargo, N.D., offering 15,000 products shipped globally. The system supplier (SSI Schaefer Systems International, ssi-schaefer.us) was tasked with short installation times during ongoing operations. Implementation required the adaptation of several new interfaces with existing systems and acclimation to SHP’s changing needs. The new goods-to-person (GTP) system included three high-density storage modules to provide sufficient storage for the increasing number of SKUs and future product range growth.

A year later, an additional module was installed for the addition of new SKUs. To automate SHP’s slow movers, a one-aisle, mini-load crane combined with a GTP pick-to-tote workstation was installed. The system optimized performance and space, and allowed SHP to extend its SKU range by 7,000.

In 2011, SHP extended the new carousel system with four additional modules and a second GTP workstation to maximize productivity and through-put, reduce operational costs and increase fulfill-ment volume. The carousel helps increase the pick-ing and storage capacity with a performance of up to 250 double cycles per carousel per hour. It has also allowed for a 50% gain in storage space (11,264 locations in totes with dividers) and enables precise inventory monitoring.

The mini-load crane integrated into the carousel system now provides inventory replenishment on demand to all eight carousel modules. Next, SHP took a big step toward efficiency and automated the fast moving area with an A-frame for the picking of the top 400 fastest SKUs and added another mobile crane in 2013.

“The supplier used a systems approach which integrated materials handling, goods-to-person and automated picking methods,” says SHP director of operations Terry Kraft. “The design allowed us to maximize productivity, increase throughput and improve customer service.”

The systems interface with has also reduced labor costs, lowered per order costs and shortened delivery times. Operations are now 85% automated and move 55,000 to 70,000 units per day. M

Automated pick-to-tote system saves space and labor


Bins replace shelves, drawers and cardboard boxes to standardize storage for large and small parts.

A major manufacturer of construction and mining equipment looked to improve

storage efficiency and inventory control within its 700,000-square-foot master parts distribution center. By replacing steel shelving, drawers, corrugate containers, wooden boxes and pigeon-hole cubbies with a series of compartmented bins, the company created a more organized, clean and efficient storage space.

The DC is responsible for providing parts and responsive customer service worldwide. The site operates 24 hours a day, seven days a week, 365 days per year to keep up with demand. One of the biggest hindrances to the efficiency of the operation was the 150,000-square-foot small parts storage area. The facility had been using a disjointed variety of storage options with many of its SKUs contained on shelves in cardboard boxes.

The corrugated boxes posed several problems for the manufacturer. The boxes were dusty, and in the humid climate they became soggy and weak. Not able to be cleaned, the boxes left the area looking dirty and

ragged. Labels tended to peel off, making it difficult for the company’s order pickers to identify parts. Possibly the biggest issue was the great variety of box sizes, resulting in a lot of wasted space.

The one-piece design of the new six-compartment bins (Akro-Mils, akro-mils.com) provided a clean and organized look. The one-piece molded part gave uniformity to the storage space with a combination of 12-inch deep and

18-inch deep bins housing a variety of part sizes. For larger parts, the supplier’s super-sized bins offered sturdy construction and large storage capacity.

Another major benefit of the bins was the enormous savings in freight versus standard bins. The shipment of the 33,000 new bins and 33,000 super-sized bins required 7.5 truckloads to fulfill. This would have required 14 truckloads for a comparable single-compartment bin. The supplier was able to begin shipping the order eight days after it was received.

Existing shelving units were removed and replaced with uniform shelving packed with labeled and organized blue bins. The formerly 150,000 square feet of storage space had been consolidat-ed and reduced by half. “This has greatly reduced travel time for pickers,” says an operations man-ager at the facility. “The new bar coding system we implemented with the new bins also allows pickers to locate parts faster within the smaller footprint. We’re now using the extra capacity for additional racking to store larger parts.” M

Compartmented bins cut storage square footage in half




Facing a near-universal challenge in the materi-als handling industry, a New Jersey automotive

parts manufacturer sought to store more in less space. The company had already deployed a vertical carousel and vertical lift to help achieve this goal. By installing a series of right-sized containers, the company further reduced wasted space within its carousels.

Without the correct size container that fits both the unit and the products to be stored, the com-pany found that the vertical carousel solution could waste just as much space as standard shelving. The new containers (Flexcon Container, flexcontainer.

com) helped the manufacturer organize its parts and increase storage capacity by more than 19%.

The company chose a 24 x 4 x 2-inch tote that could hold as many as 12 different small parts. For larger parts it chose a 24 x 9 x 8-inch container with a closed front.

“It worked out great and was totally adjustable with no danger of part migration,” said an opera-tions manager at the facility. “This gave us the abil-ity to load the containers up with no danger of prod-uct falling out of the front. We love the carousel, but the secret to the success of this system was to use perfectly sized containers.” M

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Totes securely hold 19% more small and large parts while improving flexibility in carousel.



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FlightSafety International is a leading manufac-turer of full flight simulators, visual systems and

displays. A new 375,000-square-foot manufacturing facility provided the capacity to produce up to 19 simulators at once. It also offered an opportunity to redesign the stockroom, where component parts and kits were previously stored in cardboard boxes on shelving. After installing four shuttle vertical lift modules (VLMs), the company improved inventory control, reduced labor and increased accuracy in 85% less floor space.

Component parts are picked on a daily basis and sent to kitting where the kits are stored until manu-facturing is ready. “Before the new VLMs, order ful-fillment was a time-consuming, labor-intensive pro-cess and inventory was susceptible to shrinkage,” says Mike Halsey, director of manufacturing and material management. With the shelving system, the area was not secure and inventory parts would often come up missing, creating an untraceable loss in inventory.

The installation of four, 36-foot-tall VLMs (Kardex Remstar, kardexremstar.com) reduced the footprint of the component and kitting areas in the

new facility from roughly 6,454 square feet to 960 square feet, an 85% floor space savings. The VLMs are integrated with pick-to-light technology, inven-tory management software and two 10-position batch stations.

“Inventory is much more accurate,” Halsey says. “The VLM operators are given access to the machine, but each transaction is now monitored and recorded electronically in the inventory man-agement software.”

The old shelving system required seven peo-ple in the components area and seven people in the kitting area. Since installing the shuttle VLMs, only one person is required in each area. Those two associates are also able to work on other tasks like inventory counts and replenish-ment orders.

“Time spent walking and searching for parts and kits has been eliminated, allowing our staff to spend time on other important tasks,” says Halsey, who also notes an improvement in pick accuracy from 95% to 99.9%. “When the wrong part made it to manufacturing, it used to cause a shutdown. With the VLMs, that doesn’t happen.” M

Vertical lift modules trim floor space and labor requirements by 85%VLMs for parts storage and kit sequencing prevent production stoppages and inventory shrinkage.

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3Light-based communication system improves safety and efficiency at the dock

Every autumn, one of the world’s largest receiving stations for fruit in Tomah, Wisc., is responsible for processing more than 40% of Ocean Spray’s annual Wisconsin harvest. During peak harvest, as much as

150 to 180 loads of fruit may be cleaned, pro-cessed and shipped per day. By installing a system of vehicle restraints and color-coded dock lights, the company has significantly improved safety

and efficiency at the dock.“Prior to the new system, you never knew when

a trailer was at the dock,” says Leroy Kummer, receiving station manager at Ocean Spray. “There are a lot of safety issues that can occur when things are moving at such an increased pace to meet the demands of the harvest season. The new system enables drivers to see when it is safe to enter and exit a trailer, avoiding unnecessary mis-

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takes and injuries.”The integrated vehicle restraints and

dock lights (Rite-Hite, ritehite.com) prevent trailer separation accidents and increase communication at the loading dock. Lights were installed at the upper corners of the dock door to confirm the presence of a truck and the status of the vehicle restraint. These lights let lift truck operators and managers know when it is safe to enter a trailer. Lights were also installed on the dock leveler

to confirm the restraint status as an operator exits the trailer.

In addition to increased safety, the facility has noted that the system also saves on staffing and resource costs. “The added efficiency aspect is great,” Kummer says. “Because we have one communication system, we have reduced the need for dock workers to be running in and out checking on wheels or trailer status to unlock full trailers.”

Picking unit based on 24-volt rollers increases speed tenfold

From its high-bay warehouse in Germany, Villeroy & Boch offers a complete range of high-quality tableware, kitchen and bath-room products. After installing a

new conveyor and picking system using 24-volt motor-driven rollers (MDR), the company has multiplied productivity while minimizing maintenance costs.

The warehouse handles a range of products that often require a great deal of care in addition to the speed

customers expect. In the new picking unit, tower-high interim storage areas are filled with orders for the picker to fill. Vertical buffer zones are then used to save space. According to Michael Dietzen, who is responsible for the tech-nology used in the distribution ware-house for tableware, throughput was a priority. “The main requirement was to get these products to our customers as quickly as possible,” he says. “With the existing system, the entire process took

a lot of time. Thanks to our new system, we have now been able to increase our speed by a factor of approximately 10.”

As opposed to the traditional 400-volt system the company also uses, the MDRs (Interroll, interroll.com) improve pickers’ productivity in a smaller foot-print with less energy consumption, downtime and maintenance. The new technology is also suited for retrofitting and can easily be integrated into exist-ing systems or reconfigured as needed, says Dietzen. In some instances, new segments that included 24-volt MDRs for zero-pressure accumulation convey-ors were installed in existing systems. Because individual segments or zones can be replaced, they can be modified more easily to improve specific pro-cesses and meet new demands.

Since the 24-volt MDRs are only

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Located in Endicott, N.Y., Huron is a full-service property man-agement group. Earlier this year, the company converted interior and exterior lighting from tradi-

tional lights to LED fixtures (Dialight, dialight.com). As a result, the company significantly reduced maintenance costs while improving light levels across the facility.

The Huron Campus, where high-tech manufacturing companies lease space, still requires frequent monitor-ing of all gauges for heaters and chill-

ers. The boilers and chillers caused fluctuating temperatures that gener-ated humidity and mist, creating an environment in which the traditional lighting could not effectively oper-ate. The previous fixtures often failed, flickered or changed color in ways that made monitoring difficult and resulted in unacceptable maintenance costs.

As a classified area, the company also needed fixtures with a solid T-rating, which is the amount of heat created by the electrical wiring on the surface of the fixture. After reviewing

several manufacturers and solutions, the company installed a series of high bay lights across the campus over a period of months. When completed, the results were immediately notice-able. From the exterior lighting in the parking lots to once dimly-lit areas between pipes, workers benefited from clear light as well as better color rendering and instant-on capability.

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Load, lift palletized materials from ground level to ergonomic working heightThe Zero Lift raises palletized materi-als from ground level to an ergonomic working height without a forklift or other equipment. The lift lowers to ground level for easy loading of wheeled carts or pallets with a pallet jack. Surface mounted, no pit required, the lift comes in capacities from 2,000 to 4,000 pounds and is fully powered. It operates reliably thanks to self-lubricating bushings with hardened chrome pins for pivot points. Positioning is provided with a NEMA 4X push button control. To prevent uncon-trolled descent, velocity fuses are con-nected to the cylinders for safe, smooth operation. Kelley, 877-558-6960, www.kelleyentrematic.com

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FOCUS ON Ergonomics

Electro-mechanical, zero-low lift tablesIdeal for forklift-free operations, zero-low ground level lift tables are powered by an electric motor, with lifting action by machine or ball screw

instead of hydraulics. Operation is quiet, smooth and clean, mak-ing them useful for laboratory, food processing and pharmaceutical operations. Tables may be specified in stainless steel or aluminum construction, and come in capacities from 250 to 6,000 pounds. Standard and customizable sizes range from 26 x 36 inches to 60 x 72 inches, with raised heights from 0 to 48 inches. Powered by 110 volts AC, 230/460-volt three-phase electric, or battery, the table can be controlled momentary contact hand-held pendant or foot pedal. Air Technical Industries, 440-951-5191, www.airtechnical.com.

Lightweight, compact ratchet lever hoist Certified by the Hoist Manufacturers Institute (HMI) as meeting requirements for technical, service and after-market support, the CM Bandit ratchet lever hoist is offered in 0.75 and 1.5 ton capacities. The lightweight device comes standard with RFID technology for easier inventory and inspection management. Features include a 360-degree rotating handle for easy transport and use in confined spaces; corrosion protection with a load-tested, gold chromate chain, plus zinc plating on major components; forged upper and lower hooks with a wide throat opening for easy load attachment; a handle-type chain end-stop for quick take up and positioning of slack; and comfortable rubber grip for a secure hold. Columbus McKinnon, 800-888-0985, www.cmworks.com.

Handle up to 1,100 pounds with counterbalanced ergonomic manipulator

To allow an operator to effortlessly suspend, rotate, tilt and transfer prod-uct with precision, a line of ergonomic manipulators precisely counterbalance heavy loads. Equipped with appropriate end-of-arm tooling, they can be used in manipulating, transferring or installing product. Models handle load capaci-

ties up to 1,100 pounds in a working radius up to 20 feet. The manipulators adapt to the operator’s preferred working height and position. Once suspended, the product can be moved man-ually or under power. A simple, intuitive control console adjusts the counterbalance force, rotation, tilt, braking and parking. Suspended product can be rotated ±90 degrees under power, or rotated continuously by hand, with a powered tilting range of 0 to 93 degrees. To support the product until it reaches its destination, a safety device is incorporated. Famatec North America, 855-326-2832, www.ergonomicmanipulators.com.


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FOCUS ON Ergonomics

Handle a variety of loads with hoist that accommodates multiple attachmentsEngineered for single-handed operation and guidance of loads, the DCM-Pro Manulift includes a chain hoist and a quick-discon-nect coupling to accommodate multiple load handling attachments, including a load hook, slewing load hook, open hook, belt sling parallel gripper, pantograph tongs for square or round goods, and a load hook adapter. All attachments connect with a swivel-lock connecting pin. The hoists’ manual or electric trolleys travel on the supplier’s profile sections and I-beams for integration into existing work and production processes. They handle loads weighing up to 550 pounds. Demag Cranes & Components, 440-248-2400, www.demag-us.com.

Two-wheel hand truck with powered lift platformThe LNB-350 combines the vertical lifting of a small powered stacker with the con-venience, versatility and simplicity of a two-wheel hand truck. The device makes it faster, safer and easier to transport and reposition items and transfer loads. Push-button controlled, the unit’s powered platform uses a linear actuator to raises or lowers loads to a comfortable height to eliminate bending and stretching.

Capable of handling loads up to 350 pounds, the hand truck is built on an aluminum frame that rolls on 10-inch polyurethane tires. It is equipped with a maintenance-free, on-board 12-volt battery with built-in charger. To keep the device upright and freestanding, a stationary base plate is integrated into its con-struction. Lift’n Buddy, 701-499-5290, www.liftnbuddy.com.

Drive through hydraulic lift tables can be customized with hinged rampsGuardian low profile electric hydraulic platform lift tables can be equipped with an optional hinged ramping system. The system allows for drive through lifting of mobile products; the item can be wheeled onto the platform and secured with caster brakes or a floor lock. As the lift elevates, the hinged ramps retract to create a front and rear barrier that, along with the integrated side bar-riers, secures the product an all four sides. In addition to giving an operator 360-degree access to loads weighing from 1,100 to 3,300 pounds, the device may be outfitted with indexing pins for use as a dual-stage work platform. Loadable with a pallet jack due to a lowered height of 3.25 inches, the tables come in platform sizes from 31.5 x 55 inches to 39.6 x 61 inches. Lift Products, 877-543-8776, www.liftproducts.com.


FOCUS ON Ergonomics

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Updated stackers offer performance, ergonomic enhancementsSeveral new features have been added to all models of PowerStak compact, fully powered stackers to boost performance and ergonomics. A turtle speed setting reduces drive speed by 50% for more precise positioning. For addi-tional rigidity and to eliminate deflection, even under a maxi-mum load of 2,200 pounds, the stackers’ straddle legs are

fabricated from solid steel. Power is delivered by two sealed, maintenance-free batteries, while a heavy-duty, built-in charger has fuse protection and a rugged casing. Built on a short, stable wheelbase to enhance maneuverability in tight quarters, the unit’s ergonomic handle has forward and reverse thumb switch-es on both sides of the handle for left- or right-hand operation. A narrow mast and offset control handle ensure a clear forward view, while an auto-reversing belly switch protects operators from injury when walking the unit backwards. The stackers’ maximum lift heights range from 62 to 150 inches. Presto Lifts, 800-343-9322, www.prestolifts.com.

Replace neoprene cloth vacuum tubes with copolymer resin modelConstructed with a copolymer resin, the Rhino Tube vacuum tube for lifters can perform up to 1 million flexes. Impervious to chemical exposure and safe for wash down areas, the tube has an operating range of -40°F to 240°F. It is ideal for replacement of neoprene cloth tubes in any diameter, from 4.5 to 10 inches. The tube is equipped with mounting cuffs on both ends, and comes in standard lengths of 9- and 10-feet (custom lengths may be specified). For operator and load safety, the tubes are sup-plied in a high-visibility yellow. UniMove, 510-826-7855, www.unimove.com.


FOCUS ON Ergonomics

Handle 55-gallon drums with below-hook attachmentThe BHDL series of mechanical below-hook attachments can be used to lift, position and lower 55-gallon drums overhead for placement in or out of overpack drums, containment ves-sels, scales or similar applications. The attachments ensure that the lifted drum remains fully vertical during its movement. Equipped with two curved arms that conform to the underside of the load, the device works with drums made of steel, plastic or fiber in a range of outer diameters from 21 to 25 inches. Capable of lifting up to 2,500 pounds, the attachment connects to any overhead-lifting hoist, or to a forklift adapter that enables its use with forks. Liftomatic Material Handling, 847-325-2930, www.liftomatic.com.

Take rolls for a spin with lightweight turner that lifts up to 500 poundsThe Conco Quick Turn lightweight roll turner allows an operator to manually upend and downend a load with minimal effort. To ensure precise position-ing, an adjustable mandrel expands from 3 to 6 inches to easily accommo-date varying roll widths. Once lifted, loads spin like a wheel on a bearing, allowing for smooth reorientation and proper placement at drop off. The unit can be incorporated into a hoist, balancer, air lift or articulated jib lifter. Capable of lifting loads up to 500 pounds, options include integrated con-trols, auto leveling, air-powered rotation, manual or pneumatic grip control, and custom core sizes. Positech, 712-841-4548, www.positech.com.

Hydraulic and pneumatic work positioners A full line of portable work positioners improves worker ergo-nomics by eliminating reaching and other movements dur-ing palletizing and depalletizing. Offered with a heavy-duty, 360-degree rotating turntable and either hydraulic or pneumatic operation, the units are ideal for transporting heavy loads from work cell to work cell. Options include accordion skirts, over-sized platforms, bev-eled edge platforms, pit mounting, detent stops, programmable logic controller or foot pedal control, and an external power unit. Verti-Lift, 502-361-0180, www.verti-lift.com.

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MODERN 60 Seconds with...

Brian Butler TITLE: Chairman, Industrial Truck Association; President & CEO, Linde Material Handling North America

LOCATION: Washington, D.C. (ITA)

EXPERIENCE: Butler is a 33-year industry veteran and been involved with ITA for the past nine years

DUTIES: As ITA chairman, Butler works with the executive board to determine the strategic direction of the industry association. He is also responsible for building a consen-sus behind that strategic direction and providing a voice to the asso-ciation’s position on industry issues.

Modern: How did the industry fare in 2013, and do you have any insight into sales through the first half of 2014?

Butler: Last year was another strong year. Based on reporting from our members from this past May, we believe we will be more than 200,000 units and could see an approximate 5% increase for 2014 if everything stays constant. Part of that growth is coming from some residual pent-up demand from the slowdown, although that is diminishing. I think customers are also looking at different ways to operate their facilities. We could see the sale of 60,000 units of Class 3 product. Customers are looking for more cost-effective ways to move materials.

Modern: Our cover story this month looks at how CN, one of North America’s largest railroads, is partnering with its OEM to manage an inventory of parts that are critical to uptime. Are you finding that the maintenance side of the lift truck industry, such as parts management, is becoming more important to end users?

Butler: It’s all about productivity. Every customer has a specific need. CN may need parts available in specific places. For another company, their need could be access to technicians. For another, it could be the availability of rental trucks during their peak season. Those all fall under fleet management, which is becoming more important. Again, its all about productivity and uptime.

Modern: Related to above, are users today still maintaining their own fleets, or are they turning fleet management duties over to distributors and third parties?

Butler: The trend over the last few years is that more customers are turning to their OEM and the OEM’s distributor network to support their operations. Whether a company turns all or just some of its requirements over to an OEM or distributor depends on its expectations and business needs.

Modern: One of the biggest issues facing the automation

side of the materials handling industry is the availability of skilled technicians to maintain increasingly complex systems. We know that lift trucks are also becoming more technologically sophisticated and complex. Is the industry grappling with a shortage of skilled technicians?

Butler: Yes, and that’s one of the reasons our customers are leaning on their OEMs. Our members have qualified technicians, and they have an inventory

of parts because they understand the demand for parts out in the field. That’s becoming more difficult for customers, even if they’re operating a fleet of 100 trucks. And yes, the lift truck has become more technologically advanced, which makes it more difficult to troubleshoot and repair. The upside is that as OEMs focus on providing service and parts management, there’s a better total cost of ownership for the customer.

Modern: As you look to the future developments coming in the industrial truck industry, what excites you the most?

Butler: I think the industry has entered the phase where we’re not just about what’s on the lift truck, but what’s around it. For instance, I think you’ll see more software integration around the lift truck, whether it’s fleet management, truck tracking or improved productivity in the warehouse. What the industry does with the data around the forklift truck is what will be exciting. M

hyster.com © 2014 Copyright Hyster Company. Hyster and are registered trademarks of Hyster Company.

Hyster offers the broadest capacity range in the industry with more than 130 models available—each one designed to get the job done for less thanks to 80 years of engineering excellence that never settles for “good enough.” So whether your job calls for a container handler, a narrow aisle reach truck or something in-between, Hyster has the hardworking, innovative lift trucks for you.

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Documents

mmh.com August 2014 · An ideal arrangement of component parts ensures easy access and convenience for maintenance. A design based on human engineering relieves fatigue and increases