What Factors into the ROI on Replacing your Forklift?

posted on: Thursday November 26, 2015

xtralargeLast post, we discussed a few of the major cost factors associated with using forklifts. Between labor, safety, and product integrity, forklifts can be major liabilities for manufacturers. Many companies are converting to forklift-free environments as a Lean and/or safety initiative. After all, the purpose of a forklift is to move product vertically; however, the majority of their movements are horizontal. Replacing the means for horizontal transportation results in more efficient, productive, and cost-effective work.

If you’re already running an operation with lift trucks, though, you may be concerned about what it takes to make such a transformation. Is it really worth the money to convert, especially when you’ve invested in people and equipment already?

Moving to a forklift-free or forklift-reduced environment should be considered a Lean or Just in Time (JIT) initiative. Fundamentally, these models eliminate waste, non-efficient processes, and non-value-added activities. A properly designed system will create immediate process improvements. The best way to accomplish this is by utilizing a battery-powered cart pusher, or tug.

A tug can be operated by any worker without special training. It is hooked up to a cart or carts, and provides the muscle necessary to overcome hundreds, if not thousands, of pounds of “Draw-bar Pull.” Tuggers moving carts, dollies, or a train of carts easily move the right amount of product for JIT, keeping inventory low and aisles free from excess product.

From both an efficiency and cost standpoint, the tugger’s ability to allow one person to effortlessly move a lot of material in one trip can drastically improve the ROI. Depending on how product is moved now, this alone may make a significant impact on your business. Any manual horizontal movement is dangerous and laborious to workers. Worker’s compensation claims for chronic or acute injuries from pushing and pulling tasks can cost over $50,000 a year. Without equipment, there are only two ways to make pushing/pulling tasks safer. Either add manpower or reduce the weight of each load. Both of these options hinder productivity, tacking on tens of thousands of dollars to your annual costs.

When looking at ways to increase efficiencies and save money, space requirements are an untapped resource. With forklifts, a lot of space is necessary to move down aisles, around corners, through workstations, and also to store when not in use. Power tugs are compact and easily maneuver around corners. They require minimal maintenance and simply need to charge overnight. This frees up a lot of valuable space in the warehouse and plant.

The initial investment into a tug and cart system depends on the size of your operation as well as the application. A power tug costs between $7,000 and $12,000, with the variations capable of different push/pull capacities.  Carts cost around $2,500. Consider these factors:

  • Workers’ comp and other costs associated with work place injuries
  • Increased productivity
  • Labor and training – cost and time
  • Limited damage to product and pallets
  • Space requirements

Looking at the costs associated with electric powered tugs and carts, as well as the benefits of a lean strategy, it is entirely possible to see a ROI after 1 year. It is unusual for a ROI to take longer than 5 years with a tug and cart system. Load Mover Inc. will help you determine what you need and what your ROI will be. We are manufacturing industry experts who can help you reduce costs, increase efficiencies, and minimize or eliminate your need for forklifts. Call 952-767-1720 or email info@loadmoverinc.com to reduce your operational costs today.