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Beware of Hidden Costs: Why Cheaper Equipment Can Hurt Your ROI

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Why cheaper Equipment Can Hurt Your ROI

When purchasing equipment, it’s tempting to buy based on price, especially when the discount between emerging manufacturers and established ones can be as high as 20%. The pressure to cut costs, shorten payback periods, and the human tendency to seek the best deal can be irresistible. However, this approach can sometimes hurt your return on investment (ROI) in the long run.

The Importance of Established Manufacturers

Distribution Networks
Well-known manufacturers have established distribution networks that supply parts and technical support to get troubled equipment up and running faster than new, up-and-coming makes. These networks take years to establish and mature, providing a significant advantage in terms of equipment availability and uptime.
Established vs. Emerging Manufacturers
Let’s assume there is no difference in the availability rate (the percentage of time the machine is ready to work) between equipment from an established manufacturer and one from an emerging manufacturer. The key difference lies in the service life: 8 years for th established manufacturer (Make A) and 5 years for the emerging manufacturer (Make B). Longer service life from established manufacturers is common and impacts overall ROI.

Key Factors Affecting ROI

Acquisition Cost
Emerging manufacturers often offer lower acquisition costs, which can be appealing. However, this initial saving can be offset by other factors.
Total Rental Revenue
Equipment from established manufacturers typically generates higher rental revenue over its longer service life.
Total Maintenance and Repair (M&R) Cost
Emerging manufacturers may have higher M&R costs due to less established support networks and potentially lower-quality components.
Residual Value
Equipment from established manufacturers usually has a higher residual value, meaning you can sell it for more at the end of its service life.
ROI Comparison
Table of Key Factors
Acquisition Cost
Years In Service - Total Rental Revenue
Annual Maintenance and Repair Cost (M&R)
Total Rental Revenue + Residual Value - Total M&R Cost Over Ownership Period

As seen in the table, the ROI for equipment from the established manufacturer is significantly higher (108%) than that from the emerging manufacturer (86%), even after accounting for the 20% initial acquisition cost advantage of Make B. Additionally, the higher residual value of Make A equipment further enhances its ROI.

Evaluating Purchases
While there are occasionally good reasons to purchase cheaper equipment from emerging manufacturers, it’s prudent to evaluate the purchase using both short-term and long-term perspectives. The short-term view considers the immediate payback period, while the long-term view takes into account your business’s sustainability and overall ROI.
Purchasing equipment based on price alone can sometimes hurt your ROI. Consider the long-term implications of your investment, including service life, maintenance costs, and residual value. Established manufacturers often provide better long-term value despite higher initial costs.

For more tips and insights on optimizing your equipment investments, connect with us on Facebook and LinkedIn.

Unlock Key Insights: Reasons Why Measuring the Availability of Your Equipment is Important

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Why measuring availability of your equipment is important

Equipment availability is a critical metric that equipment owners should measure regularly. It represents the percentage of time the equipment is available to work and serves as a good proxy for reliability. The higher the availability, the more reliable the equipment. Understanding and calculating equipment availability can significantly impact your operational efficiency and bottom line.

What is Equipment Availability?

Definition
Equipment availability is defined as the percentage of time your equipment is available to work. It is a key indicator of equipment reliability and performance.
Importance
High equipment availability means your machinery is dependable. It directly correlates with increased productivity.

Factors Affecting Equipment Availability

Expected Working Hours
The first factor in calculating availability is the number of hours a machine is expected to work in a day. For instance, if a forklift is scheduled to operate for two shifts (16 hours), this figure becomes the baseline for availability calculations.
Downtime Hours
The second factor is the number of hours the equipment is down due to repairs or maintenance. If the forklift is down for 2 hours, these hours are subtracted from the expected working hours.

Calculating Equipment Availability

Formula

The formula to calculate equipment availability is:

Example Calculation
If a forklift is expected to work for 16 hours but was down for 2 hours, its availability would be:

This means the forklift was available to work for 87.5% of the scheduled time.

Understanding the Results

Availability vs. Actual Work
Availability does not necessarily mean the equipment worked for the calculated hours. It indicates the time the equipment was ready and available to perform work.
Identifying Downtime Causes
To gain deeper insights, it’s crucial to identify what caused the downtime. Maintenance and repair software can help log and analyze the reasons for downtime, such as specific component failures.

Tools for Tracking Equipment Availability

Maintenance and Repair Software
Using maintenance and repair software helps track and organize repair jobs. This software can capture which components failed and why, providing valuable data for improving equipment reliability.
Fleet Management Solutions
Fleet management solutions like Repnotes offer web-based applications to calculate and track equipment availability. These tools help equipment owners make data-driven decisions to maximize ROI.

Benefits of Measuring Equipment Availability

Improved Decision Making
By measuring availability, you can compare different models and makes of equipment. This data helps in making informed purchasing decisions based on reliability and performance.

Enhanced ROI
Tracking equipment availability allows you to identify and address issues promptly, reducing downtime and maintenance costs. This leads to better utilization of resources and higher returns on investment.

Increased Operational Efficiency
High availability ensures that your equipment is always ready to perform, leading to smoother operations and increased productivity.

Measuring and understanding equipment availability is crucial for maximizing operational efficiency and ROI. By using maintenance and repair software, and fleet management solutions, you can track availability, identify downtime causes, and make informed decisions to enhance equipment performance.For more tips and insights on staying on top of your equipment’s performance, connect with us on Facebook and LinkedIn. 

Unlock Big Savings: How to Save on Battery Costs for Your Electric Forklifts

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how-to-save-on-battery-costs-for-your-electic-forklifts

Deep cycle battery pack replacements often represent the largest expense in maintaining a fleet of electric forklifts. Extending the lifespan of these battery packs is crucial to reducing operating costs. Two key concepts to understand for maintaining your forklift’s battery health are the State of Charge (SOC) and over-discharging.

Understanding State of Charge (SOC)

What is SOC?
State of Charge (SOC) refers to the amount of charge a battery has at any given time, expressed as a percentage. For example, a battery with an 80% SOC is charged to 80% of its full capacity, similar to the battery indicator on your smartphone.
Importance of Maintaining SOC
Maintaining a high SOC is essential for battery longevity. Ideally, you should keep your battery pack at 80% SOC. However, in practical scenarios, aiming to maintain at least 50% SOC can help preserve battery health and extend its lifespan.

The Impact of Over-Discharging

What is Over-Discharging?
Over-discharging occurs when the battery pack is used until it can no longer provide power. Although batteries typically retain about 20% charge for emergencies, frequent over-discharging can severely impact battery performance.

Signs of Over-Discharging

  1. Long Charging Times: A significant increase in the time required to charge the battery fully. For instance, a new battery may take 4 hours to charge from 0% to 100% SOC, but if it starts taking 6 hours or longer, it’s a sign of over-discharging.
  2. Reduced Work Capacity: A noticeable drop in the forklift’s performance on a full charge. If a forklift that previously operated for an entire 8-hour shift now only lasts 4 hours, over-discharging might be the cause.

Strategies to Extend Battery Life

Monitor and Maintain SOC
Regularly monitoring the SOC and maintaining it above 50% can prevent the detrimental effects of over-discharging. Training forklift operators to keep an eye on the battery charge indicator and recharge when necessary can make a significant difference.
Implementing a Battery Management Plan
Using tools like Repnotes Fleet Management Solutions can help track battery consumption and identify forklifts that replace an unusual number of battery packs. Implementing a comprehensive battery management plan can further reduce the frequency of battery replacements.
Training and Awareness
Educating Forklift Operators
Training operators about the importance of maintaining SOC and avoiding over-discharging is crucial. By understanding their role in preserving battery health, operators can actively contribute to reducing costs and improving the efficiency of the warehouse operations.
Ongoing Monitoring and Adjustment
Regularly reviewing battery performance and adjusting practices based on real-time data can optimize battery usage. Using fleet management software helps in maintaining oversight and making informed decisions to extend battery life.
By understanding and managing SOC and preventing over-discharging, you can significantly reduce the costs associated with battery replacements for your electric forklifts. Training your team and implementing a robust battery management plan are key steps in achieving these savings.

How To Select The Right Engine Oil For Your Machine

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How To Select The Right Engine Oil For Your Machine

Let’s talk about engine oil, sometimes referred to as lubricants. Engine oil performs different functions, primarily providing lubrication and cooling. The benefits of proper engine oil are less wear on engine parts and optimal engine performance. But what do the numbers like 15W-40 mean, and how do you know it’s the right oil for your engine? Let’s explore an example: Shell Rimula 15W-40.

Understanding Oil Viscosity Grades

What Do the Numbers Mean?

The grade of 15W-40 consists of two numbers. The “15W” refers to the oil’s viscosity in winter, while “40” refers to its viscosity at 100°C. Viscosity measures the oil’s thickness and its ability to flow. Higher viscosity means better lubrication and cooling, but too high viscosity can make the engine harder to start.

Importance of Viscosity

An engine oil’s ability to lubricate and cool your engine depends on its viscosity. The more viscous an oil is, the better it lubricates and cools. Conversely, less viscous oil provides poorer lubrication and cooling. Since viscosity degrades with heat, oils with higher second numbers (like 40) maintain their viscosity better at higher temperatures.

Balancing Viscosity for Optimal Performance

Cold Starts

Choosing an oil solely based on high viscosity at 100°C has downsides. Highly viscous oil can make it difficult to start the engine, especially in cold conditions, potentially overworking the electrical system that fires up the engine.

Additives and Modern Solutions

Today, lubricant manufacturers use additives to balance viscosity levels, protecting your engine while ensuring quick and easy start-ups. This innovation provides the right balance, allowing the oil to perform well across a range of temperatures.

Consulting Manufacturer Guidelines

OEM Recommendations

Original Equipment Manufacturers (OEMs) typically publish recommended engine oil grades for different ambient temperatures. Always consult your operator’s manual to select the best oil for your equipment.

Importance of Following Guidelines

Following OEM guidelines ensures that your equipment operates efficiently and lasts longer. Using the right oil minimizes wear and tear, reduces maintenance costs, and improves overall performance.

Benefits of Choosing the Right Engine Oil

Enhanced Engine Performance
Using the correct engine oil enhances performance by reducing friction and heat buildup. This leads to smoother engine operation and better fuel efficiency.
Prolonged Engine Life
Proper lubrication prevents excessive wear on engine components, extending the life of your machinery. Regularly using the recommended oil can prevent costly repairs and replacements.
Cost Savings
While premium oils may cost more upfront, they save money in the long run by reducing maintenance needs and improving fuel efficiency. This results in lower operational costs over time.

Selecting the right engine oil for your machine is crucial for maintaining optimal performance and longevity. By understanding oil viscosity grades and following OEM recommendations, you can ensure your equipment runs smoothly and efficiently.

Unlock Hidden Resources: Essential Equipment Manuals Your Provider Won’t Offer Unless You Ask

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manuals for equipment

When purchasing equipment, it’s easy to assume that all necessary documentation will be included. However, there are two critical resources that your equipment provider might not automatically provide unless you specifically ask for them: the parts manual (parts catalogue) and the service manual. Understanding the importance of these manuals and knowing how to request them can significantly impact your equipment’s efficiency and longevity.

Importance of Manuals

Parts Manual (Parts Catalogue)

The parts manual is an indispensable tool for anyone using complex equipment. It contains detailed diagrams and information on every component of your machinery. Without this manual, ordering replacement parts can become a guessing game, leading to costly downtime.

Service Manual

The service manual is your guide to troubleshooting and maintaining your equipment. It includes detailed instructions on diagnosing issues, performing routine maintenance, and making repairs. Having access to this manual can save you time and money by reducing the need for professional service calls.

Benefits of Self-Sufficiency

Understanding Fault Codes

By having the service manual, you can quickly identify and understand fault codes. This knowledge allows you to diagnose problems without waiting for a technician, reducing downtime and keeping your operations running smoothly.

Troubleshooting Skills

Developing troubleshooting skills not only saves time but also empowers your team to handle minor issues in-house. This can lead to significant cost savings and improved equipment reliability.

Balancing Self-Sufficiency with Provider Support

While it’s important to be self-sufficient, it’s equally crucial to maintain a positive relationship with your equipment provider. They remain your best resource for technical support and access to critical parts. Demonstrating loyalty can lead to perks such as faster response times, waived fees, and prioritized service.

Don’t hesitate to ask for the parts manual and service manual from your equipment provider. These tools are vital for maintaining your equipment and ensuring its optimal performance. By fostering a cooperative relationship with your provider, you can enjoy the benefits of self-sufficiency while still receiving the support you need.

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