In many ways, the business evolution of the past two decades has radically reduced the barriers to entry for new businesses across a number of sectors. But is enough being done to ensure this remains the case within logistics and manufacturing? Industry 4.0-inspired innovation is rapidly transforming the efficiencies and cost to market that can be achieved by larger organisations – but where does that leave the SME?
Rather than taking a product-only approach to materials handling equipment (MHE), it is essential to match this to the specific application requirements, business size and budget. And that means while some SMEs will make great use of innovative ergonomic designs and tight integration with warehouse management systems, there are also many organisations requiring nothing more than a reliable, workhorse forklift truck – one that is used a few times a week, to move a pallet from A to B.
So why are MHE manufacturers expecting SMEs, start-ups or companies with low usage applications to pay for an all-singing, all-dancing forklift, when a traditional model could be far more suited to meet every single need at the required budget? Neil Warren, Business Director, Jungheinrich UK, explores.
Polarised Materials Handling
The pace of innovation within materials handling equipment over the past few years has been extraordinary. From the rise of automation to the huge productivity gains attained through the addition of fingertip controls and enhanced ergonomics to forklift designs, logistics intensive organisations are gaining the significant advantages in performance that are essential in an era of 24×7 delivery, online customer demands and escalating labour challenges.
Yet, while the MHE market is pushing forward with ever more sophistication, it is also at risk of alienating another huge swathe of its customer base. Innovation comes at a price – and from start-ups to SMEs, indeed even larger organisations with lower use forklift demands, the current generation of state-of-the-art equipment might not be the perfect fit.
After all, there is no one-size-fits-all solution. If businesses are to maximise the value of their MHE investment it is essential to not only find a product that matches the specific application requirements – and available budget – but also to provide an overarching solution that encompasses flexible financing, seamless upgrades and effective maintenance and support.
Right Application, Right Price
Industry 4.0, automation and robotics are without any doubt increasingly essential to the competitive performance of many retail, manufacturing and third party logistics organisations; but failing to cater to the needs of less intensive applications risks creating a barrier to entry for many others.
A start-up company may be unable to justify the expense of a fully configured top end forklift truck – or even raise the finance. It will certainly struggle to accurately and effectively embrace automation when the processes are completely untried and untested within their application. For example, does a company requiring a forklift for no more than ten hours a week need to invest in fingertip controls, or could standard hydraulic levers do the job?
Based on over a decade’s proven design, highly functional entry level forklift equipment can deliver the productivity, efficiency, and comfort required – at a lower price tag. These essentially mechanical products also have a high level of reliability – and any replacement parts can be swiftly swapped in and out on site. The complex and incredibly sophisticated telemetry being embraced at the top end is fantastic for those organisations looking to leverage in depth performance insight to save precious time from their warehouse operations; but for a smaller or start up business, manufacturers need to appreciate it might all be about simplicity, reliability and ease of use.
Flexibility and Agility
Of course, the issue is not simply access to appropriate equipment – finance models are also incredibly important for SMEs and start-up businesses. In an era of economic and political uncertainty, few organisations want to take on long term commitments. Expecting companies to sign up to five or ten year contracts is restrictive; while some organisations’ requirements will remain unchanged, others will evolve and develop – a consultative approach, rather than a product-only focus, is key to ensuring each organisation achieves its goals, irrespective of size.
Furthermore, companies need flexibility – from agile payment models to support peaks and troughs in usage, to the provision of a complete solution designed to flex with a business’s performance. Again, companies require more than a stand-alone product sale – they need access to high quality support and maintenance to avoid downtime, as well as the option of seamless upgrade to top end equipment as and when the business need evolves, and the opportunity to embrace other forklift usage models to achieve that essential business agility and flexibility.
Life Time Cost
Business demands are changing – from the escalating concerns regarding labour shortage to the consumer driven expectations for faster and totally accurate picking and delivery processes. As a result, companies of every size are looking for efficiency and performance and, increasingly, that means considering the full life time cost of equipment.
For the 3PLs, retailers and manufacturers, this increasingly means automation and robotics; it means embracing innovative charging models that leverage the latest battery technology to remove the need for in-shift battery changing; and it means the use of telemetry to enable proactive maintenance that eradicates downtime. But smaller companies have different needs – and that means a strong demand for reliable, affordable materials handling equipment, good support to minimise downtime, the availability of viable models to support peaks in demand and, critically, an upward migration option; needs that product ranges such as Ameise®, a brand exclusive to Jungheinrich, have been specifically developed to meet.
There is no justification for overlooking the individual requirements of smaller companies. By creating a complete business solution – from the initial cost to the end to end support and options for upgrade – that addresses not just the top of the line materials handling requirements but those of every business, the industry can level the playing field.