Mhlnews 1596 Columns0200
Mhlnews 1596 Columns0200
Mhlnews 1596 Columns0200
Mhlnews 1596 Columns0200
Mhlnews 1596 Columns0200

Do Your Due Diligence

June 1, 2007
When selecting material handling equipment, buyers must look beyond fit, form and function.

By Ken Cowman

The first cut at selecting equipment is the fit, form and functions required for the material loads to be moved and the environments that the machinery will be used in. In order to get the number of models and vendors down quickly, develop a ‘must have' list of requirements. For example, freezer storage, the presence of potentially explosive/flammable gas or outdoor applications require some unique features that are not common to all vehicles. Load types, weight and handling features will also create unique requirements.

One factor of growing importance is your organization's ‘green goals.' If you have embarked on an environmental initiative, then the operating characteristics of the equipment will eliminate some models from the procurement cycle.

Operator Comfort and Safety
There are two potential downsides to not paying enough attention to operator comfort and safety:
1) lost time due to injury; and, 2) lost productivity due to fatigue or operator discomfort. Depending upon your location, the cost of lost time due to injury has different levels of impact. However, due to the combination of litigation potential and the penalties for breach of regulatory compliance requirements, operator safety features will be on your ‘must have' list of requirements.

Operator fatigue or discomfort may lead to injury but will definitely lead to lower productivity. By ensuring that the operator is well supported and comfortable in the use of the equipment, their concentration on the task at hand will remain at a good level and their ability to maintain a brisk pace will be maintained.

Movement Recording
In some organizations, such as those that must comply with the U.S. Bioterrorism Act (e.g. pharmaceuticals, food products, etc.) and other regulations that require tracking of materials and the people who have access to the materials, another ‘must have' requirement is the ability for the operator to easily record inventory and material movement information. This might be as simple as clear-view access to use an RF scanner or the ease of equipment mount/dismount.

Some organizations also want to track equipment movement for utilization and efficiency purposes as well. So, embedded RFID or grid location/GPS-types of technology may make it to your ‘must have' list.

Warranty & Maintenance Services
Procuring the equipment is great but insuring against undue and excessive cost of ownership is also part of the purchasing process. Fortunately, this can be negotiated once you get down to a final list of vendors.

As part of the information needed to begin this process, you should have determined the number of operating hours (maximum daily and annual usage) and conditions of operation that the equipment will be subjected to. Based on this information, you should get the standard warranty information (length, cost and extendibility) as part of the qualification round for comparison between vendors. You should also request estimates from the vendors for normal repairs post-warranty.

Once you've created a ‘must have' list of features and functions and the list of eliminators (e.g. environmental), a telephone call lasting less than ten minutes to local vendors will eliminate the models that are not going to be in contention. Structure the call in such a way that the most important ‘must have' features are answered first. If the answer is not suitable, then the call cycle is much shorter. In one situation, I eliminated three vendors within the first three questions.

At this point, quantifiable issues such as procurement cost, warranty and maintenance estimates can be taken into consideration to reduce the list further and then qualifiers such as operator comfort/safety and movement recording beyond the ‘must have' list.

Get the list down to two (maximum three) vendors and then do a "go/no go" budget analysis and preliminary financial approval. Then the physical visit and formal negotiation cycle can go ahead to determine the winner.

Ken Cowman (647-234-3244, [email protected]) is the managing director of eMerging commerce inc. (Mississauga, Ont.). He has over three decades of experience in materials, manufacturing and service management, and over 24 years as a consultant and educator to North American industry.