WAREHOUSES: An ounce of prevention

Regular equipment audits and inspections can reduce repair costs

As anyone who owns a car knows, regularly inspecting and maintaining an auto is much cheaper than fixing a car once it breaks down – not to mention the cost of replacing the car. Likewise, by conducting regular audits of the equipment in your catalog distribution center, you can save money by identifying any badly worn equipment before it breaks.

In fact, equipment audits can save your reputation as well, since forced downtime brought on by equipment failure can delay order fulfillment, says Kenneth Ackerman, president of Columbus, OH-based operations consultancy The Ackerman Co. And a warehouse shutdown could lead to lost orders – and lost customers.

The catalogers that regularly inspect their equipment are better able to determine whether gear should be replaced or refurbished, says Michael Hastings, director of operations for Emeryville, CA-based health and beauty products cataloger SelfCare. At companies that, unlike SelfCare, do not perform regular audits, “I’ve seen cases in which new equipment was purchased that wasn’t really needed,” Hastings says. “I’ve also seen cases in which companies have invested heavily to maintain a piece of equipment where it didn’t make sense because of excessive wear.”

Before deciding whether to invest in a new piece of equipment, SelfCare refers to records from previous equipment audits to see how frequently the item was repaired in the past.

Rye, NY-based Lillian Vernon began conducting equipment audits 12 years ago, when it first moved into its Virginia Beach, VA, distribution center. Four times a year between January and August, a maintenance team of 20 inspectors check and replace worn equipment throughout the $252 million cataloger’s 1 million sq. ft. of warehouse space (which includes a seasonal call center in Las Vegas).

“Naturally we try to fix equipment before it breaks,” says Lillian Vernon spokesman David Hochberg. “The maintenance program is less costly, especially when a part breaks. And by shopping for spare parts in our leisure, we can comparison-shop for the lowest possible price on spare or replacement parts, such as worn belts and rollers.”

It was during an equipment audit in 1995 that Lillian Vernon’s maintenance crew found that worn conveyor rollers were badly worn and in need of replacement. Now the warehouse staff monitors the conveyor rollers as a matter of course. “Conventional rollers are replaced on an as-needed basis, usually about 10-20 per week,” says Bill Kirby, group leader for the cataloger’s maintenance crew.

Vendors can lend a hand

Multititle cataloger Hanover Direct inspects its warehouse equipment every month, says Blair Burns, director of facilities planning at Hanover’s Roanoke, VA-based distribution center. “Then our vendors come in the fall for the Christmas peak season to check critical equipment such as our automated conveyor system and our automated tilt tray sorter.”

In fact, your vendors are critical in the equipment audit process, especially when it comes to power equipment such as forklifts. Even if you can’t convince the vendor to do the checkup for you, Ackerman recommends that you consult with the company to determine how often you should conduct maintenance checks and what to look for. Most power equipment has a meter that reflects the number of hours the machine has logged, so you can typically keep track of how much the equipment has been used and when you need to check it.

According to operations consultant Ken Ackerman, a preventative maintenance program for warehouse equipment does not require additional staff or even a full plant shutdown. But catalogers do need to make the time to check equipment – and to do the checks regularly and correctly. Below, some tips to help you set up your own equipment audit program.

Schedule regular checkups. The warehouse manager should schedule periodic maintenance checks on equipment – typically in the off-season – at least twice a year, if not more often. Checkups should be performed by warehouse equipment experts who know what sort of wear and tear to look for.

Keep accurate maintenance records. Detailed records of repair costs will help you determine which units are worth repairing and which are more likely to soon break down. Without accurate repair costs, it’s hard to determine whether you should rebuild or replace equipment that does not meet inspection.

Enlist your vendors’ help. You may be able to get the equipment vendor to perform maintenance checks for you. Particularly in this tight labor market, Ackerman says, many catalogers don’t want to devote warehouse staff to equipment maintenance if they can avoid it.

If you plan to move warehouses, you definitely want to make sure your equipment is worth the time, effort, and expense to move. So before making the move, don’t just review your equipment to make sure it works, says consultant Kenneth Ackerman. Also consider how your equipment will work in the new warehouse, and if you even need to bring it there.

If you plan to bring your forklift, for instance, make sure that it isn’t too big or too small for the new space. “Many businesses change space but forget about the new warehouse design,” he says. If the existing forklift doesn’t fit or is otherwise obsolete in the new facility, moving it is counterproductive.

Even if something won’t work in your new facility, however, you may be able to make use of it. Hanover Direct maintains a parts inventory – mostly of rebuilt engines – for its fleet of 80 tilt trucks and forklifts. And if a piece of power equipment is being replaced, says Blair Burns, direct of facilities planning at the cataloger’s Roanoke, VA-based distribution center, “we take what parts from it we can before we replace it.”

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