In the final part of the two part blog series on forklift-free driving safety, we cover the consequential costs associated with forklift labor, and the benefits that result from implementing driverless automated tugger solutions safer alternative.
Forklift-Free Environments Drive Cost Reduction
Beyond safety and lean manufacturing, automated tugger solutions drive down cost normally incurred from labor wages, medical costs and training expenses, as well as expenditures suffered from facility, equipment, and unsaleable product damage due to forklifts.
Forklift operators require expensive labor, approximately $62,000 per year to operate the machinery in the U.S. and £60,000 in Europe. Derek Cribley, Director of Systems Engineering at Bastian Solutions explained, "Increasing labor costs combined with the availability of a steady workforce can make it difficult for companies to maintain enough trained forklift operators. High turnover rates also create an expensive training regimen as operators come and go."
Three forklift operators moving product during three shifts would cost employers $186,000 in U.S. labor wages per year. The forklift operator accounts for 96% of the operating cost over the vehicle life. Where as, with an automated tugger solution replacing manned forklift travel, the vehicle can operate for approximately $3 per hour, 24/7.
Cribley noted, "Forklifts can be effective tools for many distribution and manufacturing environments, but in facilities where space is limited and a high number of product loads must be handled, forklifts are often not the most effective or safest form of material handling. The transportation of loads by forklift is labor intensive. Operators must be thoroughly trained, but accuracy concerns often remain due to human error or lack of training. Small aisles and tight turns can also be a challenge for operators, which can lead to safety hazards including employee injuries and damaged equipment."
When injuries occur the impact is substantial. According to The American Society of Safety Engineers, businesses spend $170 billion a year on costs associated with occupational illnesses and injuries. Employers spend billions on wages and medical care. OSHA reported lost productivity in the workplace costs companies $60 billion each year. Such productivity losses paired with expensive medical and wage payments greatly affect bottom-line performance.
Further to the bottom-line, forklifts transporting palletized goods often result in product and pallet damage, and unsaleable merchandise. In the 2008 Joint Industry Unsaleables Report: The Real Causes and Actionable Solution, the Grocery Manufacturers Association (GMA), Food Marketing Institute (FMHI), and Deloitte reported that 2007 industry survey data showed manufacturers' unsaleables rates range from 0.4% to 2.64%, averaging 0.83% of gross sales. Retailers' and distributors' unsaleables rates range from 0.24% to 2.78%, averaging 1.21% of gross sales. The report shared an example of what this data means for a $5 billion manufacturer and retailer. Unsaleables for a manufacturer represent a cost of $41 million on average. Unsaleables cost for a retailer before reimbursement is $60.5 million on average.
Automation Benefits with Driverless Automated Guided Vehicles
Not all accidents or damage result from misuse of forklifts, often, supplementary factors such as physical limitations, training, work stress, perception, and decision-making affect operators. Therefore, reducing exposure to forklifts by deploying driverless vision guided vehicles (VGVs) will reduce consequential costs from human error associated with incidents, such as death benefits, medical costs, workers' compensation claims, lost workdays, litigation fees, and fines, among others. Such concerns have influenced companies to examine safety and other benefits from automation with driverless VGVs.
Automated tugger solutions maximize efficiency, and just as importantly accuracy. According to Cribley, "VGVs provide a higher efficiency environment. Breaks are not needed and non-productive time is nearly eliminated. Maintenance costs are also typically higher for forklifts as operators can be hard on the equipment creating more frequent need for repairs. Overall, VGVs provide a more productive, safe, and cost-efficient facility."
Cribley also explained that VGVs are an effective solution for a variety of tasks such as "the transfer of product over long routes between pickup and drop off points. They are also a good option for transporting work in process (WIP) between assembly cells, replenishing work cells with raw materials, and removing finished goods from work areas."
Automated tugger solutions eliminate the concern of running out of parts for production. VGV delivery is predictable and consistent, and is important in 2014 and beyond as manufacturers move to smaller lot deliveries. VGVs ensure the delivery of the right parts to the right place every time.
Complexity Factor Driving Forklift-Free Environment
Ensuring the delivery of right parts in an efficient manner has become somewhat more difficult to maintain, as customization in large volumes of manufactured product is good for sales, but adds complexity to the production process. Throughput can be stifled by order complexity, impacting inventory, lead times and profits, though the effect is not easily quantified.
According to Trilogiq's National Sales Director, Randy Blaylock, "Complexity and efficiency are two key factors driving the current urgency for forklift-free environments. Virtually all manufactured products are becoming more complex as consumers demand more specialized features, color choices, and power options. This requires more part density in the line side assembly area, which in turn requires more forklift traffic to move the parts to the line with higher frequency."
Blaylock stated, "A forklift-free environment is far more than a direction. Several major manufacturers have a top down edict that all new lines will be FTF. This is driven by the desire to meet the demands of complexity, kitting, and efficiency while increasing safety, reducing line side inventory, delivering parts accurately, and increasing quality."
With Forklift-Free Environments, Safety and Profitability are not Mutually Exclusive
Obviously, there is no greater concern than the safety, health, and lives of workers; profits while very important are secondary. However, safety and profitability are not mutually exclusive, and no greater is that evident than with forklift-free environments. Suited for safety and profitability, automated tugger solutions provide added benefits of lean manufacturing, and an efficient and productive operation.
Vision guided vehicles provide benefits that make sense for companies suited for a forklift-free environment in terms of both reducing employee injuries and deaths, to reducing production costs through lean manufacturing. Given these additional cost burdens, safety considerations, and lean manufacturing initiatives, there is pressure to seeking alternatives to forklifts, especially where automated tugger solutions can accomplish the same job (material flow and movement) as they prove to be safer, more productive, and efficient than traditional forklifts.
Communication with Derek Cribley, Director of Systems Engineering, Bastian Solution: http://www.bastiansolutions.com
Communication with Randy Blaylock, National Sales Director, Trilogiq USA: http://www.trilogiqusa.com
Corporate Manslaughter Law: http://www.alltask.co.uk/reports/CorporateManslaugherReport.pdf
Joint Industry Unsaleables Report: http://www.gmaonline.org/downloads/research-and-reports/UnsaleablesFINAL091108.pdf
National Safety Council: http://www.nsc.org/news_resources/injury_and_death_statistics/Documents/Costs_web_2011.pdf
The American Society of Safety Engineers: http://www.asse.org/professionalaffairs-new/bosc/impact.php