Calhoun: The NPS Institutional Archive
DSpace Repository
Theses and Dissertations
Thesis and Dissertation Collection
1986-12
Improving the quality of the Navy's material
handling equipment (MHE) fleet with special
emphasis on forklifts at Naval Supply Centers
Bump, Robert J.
http://hdl.handle.net/10945/21920
Downloaded from NPS Archive: Calhoun
DUDLEY KFOF LIBRABY
SCHOOL
93943-800S
CALIFORNIA
MONTEREY,
NAVAL
P08'r<iK;:*.0D.^rB
NAVAL POSTGRADUATE SCHOOL
Monterey, California
THESIS
IMPROVING THE QUALITY OF THE NAVY'S
MATERIAL HANDLING EQUIPMENT (MHE) FLEET
WITH SPECIAL EMPHASIS ON FORKLIFTS
AT NAVAL SUPPLY CENTERS
1
by
Robert J. Bump
December 1986
Thesis Advisor:
Alan W. McMasters
Approved for public release; distribution is unlimited
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11
IMPROVING THE QUALITY OF THE NAVY'S MATERIAL HANDLING EQUIPMENT
WITH SPECIAL EMPHASIS ON FORKLIFTS AT NAVAL SUPPLY CENTERS
(MHE
)
FLEET
PERSONAL AUTHOR(S)
12
Bump, Robert J
13a
TYPE OF REPORT
13b
Master's Thesis
TIME
COVERED
DATE OF REPORT
14
FROM
{Year,
1986, December
TO
Month. Day)
15
PAGE COUNT
SUPPLEMENTARY NOTATION
6
COSATI COOES
FIELD
GROUP
ABSTRACT (Continue on
'9
18
SUB-GROUP
reverse
if
necessary arid identify by block numtter)
Material Handling Equipment; Forklifts
Economic Life; Logistics
necessary
if
SUBJECT TERMS (Continue on reverie
and
identify by block
number)
Reliable and readily available MHE is vital to all large scale military
Therefore, the need to
supply, maintenance and transportation operations.
The
over-emphasized.
be
cannot
fleet
improve the quality of the Navy's MHE
quality
this
improving
for
methods
and
current MHE inventory quality is poor
This thesis considers the Navy's forklift trucks because
are essential.
A review of current MHE
they comprise a large majority of the MHE fleet.
and replacement
plan,
and
management policies, maintenance concept
Navy forklifts at the
of
status
methodology is provided. Next, the current
average age and
the
eight Naval Supply Centers is analyzed to determine
criteria, utilizareplacement
over-age of MHE, the compliance with DOD MHE
results of
The
MHE.
obsolete
tion rates and the extent of economically
are
trucks
these
of
this analysis showed that a significant percentage
Distribution /AVAILABILITY of abstract
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SAME AS RPT
Q DTiC
NAME OF RESPONSIBLE INDIVIDUAL
Prof. Alan McMasters
DDFORM 1473, 84 MAR
ABSTRATT SECUfUT.Y CLASSIFICATION
USERS
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.
UNCLASSIFIED
SECURITY CLASSIFICATION OP THIS PAGE (Whmt Dtm Enfr^d)
#19
-
ABSTRACT
-
(CONTINUED;
over-aged and economically obsolete.
The DOD criteria
need to be replaced by the private sector approach for
determining the economic life of MHE
S'
N 0102- LF- 014- 6601
2
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Approved for public release; distribution is unlimited
Improving the Quality of the Navy's
Material Handling Equipment (MHE) Fleet
With Special Emphasis on Forklifts
at Naval Supply Centers
by
Robert J. Bump
Lieutenant Commander, United States Navy
B.S., University of Louisville, 1976
Submitted in partial fulfillment of the
requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
-<i
ABSTR?^CT
Reliable and readily available MHE is vital to all large
scale military supply, maintenance and transportation opera-
improve the quality of the
the need to
Therefore,
tions.
The current MHE
Navy's MHE fleet cannot be over-emphasized.
inventory
quality
quality
are
poor
is
essential.
forklift trucks
the MHE fleet.
and
methods
thesis
This
for
improving
considers
the
this
Navy's
because they comprise a large majority of
A review of current MHE management policies,
maintenance concept and plan, and replacement methodology is
provided.
eight
Next, the current status of Navy forklifts at the
Naval
Supply
Centers
is
analyzed
to
determine
the
average age and over-age of MHE, the compliance with DOD MHE
replacement
economically
showed
that
criteria,
utilization rates and the extent of
obsolete MHE.
a
significant
The
results
percentage
over-aged and economically obsolete.
of
of
this
these
analysis
trucks
are
The DOD criteria need
to be replaced by the private sector approach for determining the economic life of MHE.
TABLE OF CONTENTS
I.
II.
INTRODUCTION
A.
PURPOSE
12
B.
METHODOLOGY AND SCOPE
13
C.
THESIS ORGANIZATION
14
BACKGROUND
15
A.
OVERVIEW
15
B.
ORGANIZATIONAL STRUCTURE
16
C.
D.
III.
12
1.
Naval Supply Systems Command (NAVSUP)
16
2.
Hardware Systems Command (HSC)
18
3.
Major Claimant
18
4.
Defense Logistics Agency (DLA)
19
5.
Ships Parts Control Center (SPCC)
20
SPCC MANAGEMENT
1.
Engineer and Equipment Specialist (EES)
2.
Program Manager
CHANGES IN SPCC POLICIES AND PROCEDURES
-
21
23
23
1.
Management
23
2.
Utilization
24
3.
Annual Report
26
4.
Budgeting
27
5.
Replacement
28
MAINTENANCE AND REPAIR
A.
20
INTRODUCTION
30
30
B.
MAINTENANCE CONCEPT AND PLAN
1.
Preventive Maintenance Scheduling
33
2.
Organizational Level Maintenance
Responsibilities
34
Intermediate Level Maintenance
Responsibilities
35
4.
Repair Time Standards
37
5.
Quality Deficiency Report (QDR)
38
3.
C.
D.
E.
IV.
V.
3 2
NON-STANDARDIZATION
39
1.
Non-standardization
39
2.
Supply Support
40
REPAIR COSTS AND REPLACEMENT
42
1.
Repair Cost Estimates
42
2.
Repair Cost Limits
43
ECONOMIC LIFE OF MHE AND REPLACEMENT
THE CURRENT STATUS OF NAVY FORKLIFT TRUCKS
44
47
A.
AVERAGE AGE
47
B.
FUNDING FOR PROCUREMENT
51
C.
DOD REPLACEMENT CRITERIA COMPLIANCE
52
1.
Average Repair Cost
52
2.
Average Accumulated Repair Cost
54
3.
Average Downtime
55
4.
DOD Criteria Compliance
56
D.
UTILIZATION GOALS
57
E.
ECONOMIC LIFE ANALYSIS
62
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
A.
SUMMARY
66
66
B.
CONCLUSIONS
67
C.
RECOMMENDATIONS
68
APPENDIX A:
APPENDIX
B:
EQUIPMENT COST CODES AND DESCRIPTIONS
FOR MHE
71
REPAIR LIMITS & LIFE EXPECTANCIES
FOR MHE (SHOREBASED)
72
APPENDIX
C:
MHE ON-BOARD (UPDATE INFORMATION) FORM
73
APPENDIX
D:
REPORT OF EXCESS PERSONAL PROPERTY
74
APPENDIX
E:
PREVENTIVE MAINTENANCE GUIDE
75
APPENDIX
F:
SHOP REPAIR ORDER
76
APPENDIX
G:
QUALITY DEFICIENCY REPORT
77
APPENDIX
H:
1986 STANDARD FORKLIFT REPLACEMENT COSTS -
79
LIST OF REFERENCES
80
INITIAL DISTRIBUTION LIST
82
LIST OF TABLES
I.
UTILIZATION GOALS FOR NAVAL SUPPLY CENTERS
26
II.
PREVENTIVE MAINTENANCE CYCLES AND SCHEDULES
34
III.
FORKLIFT AGE DISTRIBUTION
48
IV.
AVERAGE AGE AND OVER-AGE OF FORKLIFTS
50
V.
FORKLIFT FUNDING AND POPULATION OVER-AGED
51
VI.
FY 85 AVERAGE FORKLIFT REPAIR COST
52
VII.
FY 85 AVERAGE FORKLIFT ACCUMULATED
REPAIR COST
55
VIII.
FY 85 AVERAGE FORKLIFT DOWNTIME
56
IX.
FY 85 MHE VERSUS FORKLIFT UTILIZATION
59
X.
EXPECTED UTILIZATION VERSUS ACTUAL
UTILIZATION
61
XI.
INEFFICIENT UTILIZATION
61
XII.
ECONOMICALLY OBSOLETE FORKLIFTS
63
XIII.
FY 85 ECONOMICALLY OBSOLETE FORKLIFT DATA
64
LIST OF FIGURES
2.1
Management Structure for Navy MHE
17
3.1
Optimal Operating Point of MHE
46
4.1
Forklift Funding and Over-aged Percentage as a
Function of Fiscal Year
53
DOD Replacement Criteria Compliance
58
4.2
TABLE OF ACRONYMS AND ABBREVIATIONS
APL
Allowance Parts List
BSM
Budget Simulation Model
CINCPACFLT
Commander in Chief, U.S. Pacific Fleet
CINCUSNAVEUR
Commander in Chief, U.S. Naval Forces, Europe
CNET
Chief of Naval Education and Training
CNO
Chief of Naval Operations
CONUS
Continental United States
CPA
Central Procurement Agency
DCSC
Defense Construction Supply Center
DGSC
Defense General Supply Center
DLA
Defense Logistics Agency
DLSIE
Defense Logistics Studies Information Exchange
DOD
Department of Defense
EES
Engineer and Equipment Specialist
FICP
Fleet Issue Control Point
GAO
General Accounting Office
HSC
Hardware Systems Command
ISEA
In-service Engineering Agency
LAPL
Lead Allowance Parts List
LPG
Liquified Propane Gas
MHE
Material Handling Equipment
MSC
Military Sealift Command
NAVAIR
Naval Air Systems Command
10
NAVSEA
Naval Sea Systems Command
NAVSUP
Naval Supply Systems Command
NSC
Naval Supply Center
NSCC
Naval Supply Center Charleston
NSC J
Naval Supply Center Jacksonville
NSCN
Naval Supply Center Norfolk
NSCO
Naval Supply Center Oakland
NSCP
Naval Supply Center Pensacola
NSCPH
Naval Supply Center Pearl Harbor
NSCPS
Naval Supply Center Puget Sound
NSCSD
Naval Supply Center San Diego
NSD
Naval Supply Depot
NSN
National Stock Number
O&MN
Operation and Maintenance, Navy
OPN
Other Procurement, Navy
PM
Preventive Maintenance
POM
Program Objectives Memorandum
PTD
Provisioning Technical Documentation
PWC
Public Works Center
QDR
Quality Deficiency Report
RCP
Request for Contractual Procurement
SAMMS
Single Automated Material Management System
SM&R
Source Maintenance and Recoverability
SPCC
Ships Parts Control Center
SRO
Shop Repair Order
USN
United States Navy
11
INTRODUCTION
I.
In
1979,
audit
an
the General Accounting Office
with
the
purpose
Material
Handling Equipment
After
thorough
a
review
determining
of
of
performed
(GAO)
the
if
could be
(MHE)
costs
five
different
Navy's
reduced.
types
of
Navy
activities, the GAO reported that:
elimination of unneeded material handling equipment,
and
establishment of reasonable equipment allowances,
efficient use of needed equipment would save $5.3 million
future replacement costs at the five activities
in
reviewed.
If the Navy exercised effective management of
material handling equipment at all its activities, future
replacement costs and annual maintenance and repair costs
could be reduced by tens of millions of dollars.
[Ref. 1]
.
.
.
As a consequence of the GAO report, the Navy Ships Parts
Center
Control
Systems Command
deficiencies
revised,
(SPCC)
directed
promptly
SPCC
noted.
by
the
Naval
Supply
to effect corrective action of the
(NAVSUP)
administrative
the utilization,
ments,
was
policies
replacement,
and
established,
procedures
disposal,
and overall management of MHE.
and/or
governing
reporting requireHowever, the quality
of MHE continues to be in question.
A.
PURPOSE
The
purpose
of
this
thesis
is
to
analyze
the
current
methods and policies of maintaining the Navy's fleet of MHE
and
to
determine
ways
of
improving
12
these
in
order
to
increase
quality
the
that
of
fleet.
In
particular,
the
analysis seeks to determine the extent to which utilization
goals are being achieved,
obsolete,
replacement
and
if
Department
the
criteria
fleet is economically
if the MHE
valid
are
Defense
of
and
followed
MHE
(DOD)
at
Naval
all
Supply Centers.
B.
METHODOLOGY AND SCOPE
A field trip was taken to SPCC to familiarize the author
with the current policies and procedures of MHE management.
A field trip was also taken to NSC Oakland and NSC San Diego
to acquaint the author with local MHE maintenance policies
and procedures and the operating environment.
A review of pertinent literature included SPCC functional
descriptions,
instructions,
management
point
reports,
NAVSUP publications
and
papers,
instructions,
and
and
a
search of the Defense Logistics Studies Information Exchange
(DLSIE)
A statistical
analysis was then conducted to deteirmine
average repair costs,
average downtime, and average MHE age
of Navy owned equipment.
The data used in this analysis was
obtained from SPCC's Ashore Activity Verification and Allowance
Listing
Report
for
fiscal
contained the most recent data.
MHE
year
of
manufacture,
year
1985
because
it
That report documented the
acquisition
repair cost, past year's downtime,
cost,
past
year's
accumulated repair cost,
utilization percentage and accumulated hours of operations.
13
C.
THESIS ORGANIZATION
Chapter II describes the Navy's current overall organizational
structure
policies,
and procedures.
and
management
MHE
responsibilities,
Chapter III discusses the Navy's
non-standardization,
MHE preventive maintenance system,
two methodologies for determining MHE replacement.
IV
presents
data
the
generated
Report
Allowance
Listing
determine,
per Supply Center,
from
and
Chapter
Verification and
the
analyzes
data
to
the average repair cost,
the
average downtime and the average age of forklift trucks.
It
and
this
also discusses the impact funding for procurement of forklifts
has
Finally,
and
had
concepts.
the
over-age
chapter discusses
this
compares
on
the
DOD
and
status
of
these
trucks.
forklift under-utilization
private
sector
MHE
replacement
Chapter V provides a summary and conclusions and
recommendations
14
BACKGROUND
II.
The purpose of this chapter is to describe the organi-
structure and management policies used to control
zational
and maintain Navy MHE.
followed
presented,
breakdown
and,
First,
finally,
organizational
the
by
a
brief overview of MHE is
a
description
of
SPCC
structure
management
responsibilities, policies and procedures.
OVERVIEW
A.
Material Handling Equipment (MHE)
,
for purposes of this
is defined as
study,
equipment
normally
used
all
self-propelled
in
storage and handling operations in and around warehouses,
•shipyards,
industrial
plants,
airfields,
magazines,
depots, docks, terminals, and aboard ships.
It includes
all self-propelled materials handling equipment, such as,
but not limited to, warehouse tractors, forklift trucks,
platform trucks, pallet trucks, straddle carrying trucks,
and mobile (warehouse) cranes.
[Ref. 2: p. 2]
.
.
.
The Navy recognizes the need for a large dependable MHE
fleet dispersed throughout the world in order to perform the
physical
handling
requirements
various
its
activities.
June 1986, the Navy's MHE inventory stood at 14,874
As of
1
items
with
a
replacement value of
This inventory is composed of:
Naval
of
Shore
establishments;
(1)
(2)
$368
million
[Ref.
3].
MHE at approximately 300
MHE on approximately 250
ships including those of the Military Sealift Command (MSC)
(3)
rotatable pools of MHE located at Fleet Issue Control
15
Points
at
(FICP's)
the
Naval
Supply
Centers
(NSC's)
in
Norfolk, Virginia, San Diego and Oakland, California and the
Depots
(NSD's)
Subic Bay,
Philippines and
Naval
Supply
Guam,
to provide immediate replacements to fleet customers;
and
in
prepositioned war reserve stocks at NSC Norfolk and
(4)
Oakland [Ref. 4].
B.
ORGANIZATIONAL STRUCTURE
MHE
is
structure
Agency
defense
managed by a highly centralized organizational
that
(DLA)
involves
activities.
activities
respective
their
both
and
Defense
Logistics
Figure 2.1 displays the various
involved
roles.
Navy
in
To
the
more
management
fully
MHE
and
understand
the
of
various interfaces between these activities, their responsi-
bilities are described in the following subsections.
1
.
Naval Supply Systems Command (NAVSUP)
As
the
Navy's
MHE
program
sponsor/ functional
manager, NAVSUP has several major responsibilities which are
as follows:
(A)
Provide
SPCC
formal
guidance
and
direction
in
preparing the MHE budget based on Program Objectives
Memorandum (POM) requirements received from the major
claimants.
(B)
Approve operation and general utilization standards
that are developed and recommended by SPCC.
(C)
Review and approve
limit criteria.
(D)
Review all new MHE specifications and significant
revisions to existing Navy MHE specifications for
compliance with the Department of Defense (DOD) Standardization Program. This program requires all the
MHE
16
life
expectancy
and
repair
CNO
NAVSUP
PROGRAM SPONSOR
HARDWARE
SYSTEMS COMMANDS
NAVAIR
NAVSEA
SPCC
LIFE CTCLE MANAGER
MAJOR
CLAIMANTS
CENTRAL
PROCUREMENT AGENCIES
DCSC
DGSC
HL
FLEET
INVENTORY
CONTROL
POINTS
Figure 2.1
ASHORE
NSC, NSD,
NAVSTA, NSYD,
AFLOAT
ETC.
Management Structure for Navy MHE
17
services to utilize standard specifications when
possible in order to achieve common administrative,
technical, or logistic procedures and interchangeable
supplies or equipment.
Approve standards
training.
(E)
2
operator and maintenance
MHE
for
Hardware Systems Command CHSC^
The Naval Air Systems Command (NAVAIR) and Naval Sea
Command
Systems
Commands
(HSCs)
Systems
that have an important role in MHE manage-
Essentially,
ment.
Hardware
two
the
are
(NAVSEA)
environmental
establish
they
require-
ments (i.e., nonsparking forks and bumpers on forklifts)
for
the handling of hazardous or explosive materials and develop
necessary to meet new mission
recommend design changes
or
requirements or to improve the material handling operation.
The HSCs also advise SPCC of unique operational requirements
desired by activities such as MHE used in cold storage or
sand blast areas such as shipyards.
a
vital
link
between
SPCC
and
Basically, the HSCs are
the
field
activities
with
regard to identifying environmental and operational changes.
3
Major Claimant
understand
To
the
major
claimant's
role
in
MHE
management, it is first appropriate to describe what a major
claimant is.
the
word
commands
Education
The term "major claimant" is synonymous with
"headquarters"
and
and
bureaus
of
Training
includes
and
the
Navy
(CNET)
,
independent
such
as
Commander
Chief
in
offices,
of
Chief,
Naval
U.S.
Pacific Fleet (CINCPACFLT) or Commander in Chief, U.S. Naval
18
Europe
Forces,
Operations
(O&MN)
(CINCUSNAVEUR)
issues
(CNO)
Operation
funds to the claimants who,
budgets
to
Naval
of
Maintenance,
and
Navy
issue operating
in turn,
claimants
major
The
activities.
field
Chief
The
.
are
accounting and reporting of
responsible for the budgeting,
these funds.
Regarding
the
management
MHE,
of
major
claimants
have the responsibility to:
(A)
Advise SPCC of any mission changes which may impact
on MHE requirements.
(B)
Endorse MHE allowance change requests for activities
under their jurisdiction prior to sending them on to
SPCC.
(C)
Budget and fund new mission or initial allowance
requirements
(D)
Fund the maintenance and repair of MHE at cognizant
using activities.
4
Defense Logistics Agency (DLA)
.
Two
the
activities within
management
Center
(DCSC)
of
in
DLA are heavily
The
MHE.
Columbus,
Supply Center (DGSC)
in Richmond,
Procurement Agencies
(CPAs)
MHE
and
Requests
military
nonpowered
MHE,
for Contractual
services
since
Construction
Defense
Ohio
the
and
Defense
in
Supply
General
Virginia, are the Central
for all
DOD for self-propelled
respectively.
Procurement
they
involved
are
They
(RCP's)
the
receive
from all
sole
MHE
four
authorized
purchasers of MHE.
Because spare parts used to repair MHE are common to
the services,
DLA is also tasked with management of these
19
using
parts
spare
MHE
manages
DCSC
parts.
Single
the
Automated Material Management System (SAMMS) which is a DLAinventory
wide
management
program application
based
levels
customer,
on
calculates
that
spare
stock to
is
a
parts
computer
inventory
received
(requisitions)
demands
distributes
SAMMS
system.
from
recom-
activities,
needing
the
mends when to buy and quantities to buy, computes quarterly
demand
and
information.
provides
[Ref.
common
other
inventory
management
6]
Ships Parts Control Center fSPCC)
5.
In 1973,
NAVSUP designated SPCC as the Navy's life-
cycle manager for MHE.
Service
As such,
Engineering
Manager/Inventory
SPCC functions as the In-
Agency
Control
Point
operated by Naval activities
[Ref.
for
all
2:p.
Program
and
(ISEA)
MHE
1].
owned
and
According to
SPCC Instruction 10490.2, SPCC is charged with:
inventory management,
requirements determination,
procurement initiation, budgeting,
asset distribution,
administration and approval of allowances, rental/lease
approval,
establishment
of
utilization
goals,
specification
development,
engineering
analysis,
maintenance policy, disposal authority, and monitoring the
overall performance of the MHE program.
[Ref. 5:p. 2]
.
.
.
A more detailed description of SPCC management policies and
procedures in provided in Sections C and
C.
D.
SPCC MANAGEMENT
Prior
to
procurement,
April
1973,
budgeting,
Since that date,
NAVSUP
and
was
inventory
responsible
management
for
the
of
MHE.
SPCC has performed those functions.
The
20
technical
remaining
from NAVSUP
ferred
(Code
at
0302)
billets:
in
July
specialist
three
and
directly to Code
03,
managers,
engineers,
five
supply
This
clerks.
three
equipment
one
office
between
cooperation
the
manager, engineer and equipment specialist (EES)
reports
the program manager,
program
is required
A description
to efficiently perform their assigned tasks.
of
sixteen
the director of the Fleet/Industrial
Close
Group.
program
three
program managers,
following
the
of
trans-
present MHE office
The
1976.
consists
SPCC,
were
functions
engineering
director,
a
assistant
Support
and
engineer and equipment
specialist
responsibilities is provided in the following subsections.
1.
Engineer and Equipment Specialist (EES)
As mentioned
earlier,
SPCC,
Service Engineering Agency (ISEA)
Code 0302,
for MHE.
is
As such,
three major functionsal responsibilities to perform.
it
is
tasked
with
developing
the
equipment
concept and the procedures to implement it.
assignment
(SM&R)
code.
of
a
Source,
Maintenance
and
the Init has
First,
maintenance
This includes
Recoverability
The SM&R code specifies the appropriate level
of repair capability for a specific end item and prescribes
disposition
the
Input
from
the
action
unserviceable
for
manufacturer
and
support
application
and
items.
design
complexity of the item determine the SM&R code [Ref. 7:p. 222]
.
21
Developing and updating Lead Allowance Parts Lists
A LAPL is a complete listing
the MHE maintenance concept.
of
all
in developing
is another duty performed by the EES
(LAPL's)
parts
repair
significant
maintenance
that
may
be
SPCC uses input
required to repair a specific unit of MHE.
provided from the manufacturer and the fleet to keep LAPL's
current.
MHE
maintained
and
specifications
procurement
by
This
SPCC.
are
includes
developed
also
preparation
of
procurement technical packages which contain the Request for
Contractual
Procurement
(RCP)
delivery
document,
funding
,
destination, transportation instructions and other pertinent
SPCC
data.
specifications
performance
designs
also
for
specialized MHE applications and environmental factors.
SPCC
Finally,
reviews
technical
conducts
of
first
article tests, technical manuals, and Provisioning Technical
Documentation
(PTD)
inspection
The
.
and
testing
of
the
first unit of MHE produced by a manufacturer, commonly known
as
article
first
manufacturer
testing,
complies
is
required to
specification
with
thorough review of technical manuals
ensure
complete
operating
(including
service
illustrated
parts
and
list
and
overhaul
are
is
assure that the
requirements.
A
also necessary to
maintenance
procedures
inf onnation)
provided.
Lastly,
and
PTD
an
is
reviewed for accuracy to ensure that Navy requirements for
the
equipment,
such
as
range
22
and
depth of
spares,
repair
are properly conveyed
parts and related support equipment,
turer provides
the manufac-
Upon completion of PTD,
to the manufacturer.
DCSC with
spare parts require-
initial
the
ments and the procurements are initiated.
2
.
Program Manager
spec's MHE program managers (Code 0302) are vital to
the MHE
They are basically
program.
development
and
implementation
of
responsible
MHE
for
the
program policy.
A
program manager is tasked with evaluating and approving or
disapproving
requirements
allowances,
determination,
initiating procurements and acting as contract administrator,
performing inventory control
monitoring
MHE
utilization
analyzing and
functions,
against
goals
and
developing
budget requirements.
D.
CHANGES IN SPCC POLICIES AND PROCEDURES
As a result of the 1980 GAO report which criticized Navy
management
of
management
control
Subsection
two
The
MHE,
and
provides
subsections
other
initiated
SPCC
improve
insight
discuss
procedures
the
productivity
these
into
SPCC
to
tighten
of
MHE.
improvements.
policies,
still
in
effect, that have been strongly re-emphasized.
1.
Management
MHE
at
SPCC
series).
is
using
centrally controlled by Code 0302 personnel
U.S.
Navy
registration
National Stock Numbers
23
(NSN's)
numbers
(13-00000
are not used
for
of MHE
Each piece
MHE.
assigned
is
unique number that
a
will never be duplicated.
For the purposes of budgeting and procurement,
according
grouped
is
to
describes the type of MHE
propulsion
etc.),
propane
gas)
,
type
tires
which
code
tractor,
crane,
electric or liquified
diesel,
of
cost
forklift,
(i.e.,
gas,
(i.e.,
and
equipment
an
MHE
(pneumatic
or
solid)
Appendix A provides a complete listing of these standard MHE
cost codes [Ref.
2
End. 6].
5:
Utilization
.
According
to
SPCC
Instruction
10490.2,
"Equipment
should be utilized to the maximum possible extent in order
to
recover the capital
5:p.
that
To monitor utilization,
3].
each
the
unit
of
MHE
have
[Ref.
SPCC policy now requires
hour-totalizing
an
meter
Meter reading information provided by the user
installed.
on
investment of the equipment"
MHE
ON-BOARD
form
used by SPCC to compute the
is
actual hours the equipment was used.
Utilization of each piece
of MHE
is
calculated as
the percentage ratio of actual hours of use divided by 2,000
available operating hours in
hours per week)
acquired
[Ref.
equipment,
5:p.
which
a
3].
fiscal year
(50 weeks
at 40
Utilization rates for newly
has
not
been
activity for the entire reporting period,
assigned
is
to
an
calculated on
the basis of 2,000 available hours pro rated by the number
of months assigned to an activity.
24
It
is
essential that all hour meters be maintained
in good operating condition since utilization has a direct
impact on procurement decisions and an activity's allowance.
At the user level,
SPCC's new policy states that a
central point of control must be established for the purpose
of pooling MHE to ensure the best possible utilization.
dispatching
equipment
pool
from this
to
operations
By
rather
than assigning it full-time to individual activities where
it may sit idle,
costs can be kept to
minimum and operat-
a
Additional advantages to cen-
ing efficiency at a maximum.
tralized control are that activity MHE requirements/allowance
can
better
be
deteirmined
preventive maintenance
and
scheduled more easily.
As
was
stated
rates were highlighted
in
Chapter
in
a
I,
low
MHE
GAO report dated
utilization
1980.
As
a
result, SPCC initiated a five-year plan to establish minimum
MHE
utilization goals
adjust allowances,
for
various
activities
in
order
to
to eliminate excesses and to dispose of
or redistribute excess equipment.
Since the scope for this
thesis is limited to Naval Supply Centers, a description of
their five-year plan is provided in Table
The
former
goal
of
in
the
40%
goal
of
60%
for
MHE
was
This goal was based on the life expectancies
impractical.
listed
utilization
I.
DOD
criteria
in
Appendix
B.
A utilization
was chosen because that percentage is used at
the DLA Supply Centers.
25
TABLE
I
UTILIZATION GOALS FOR NAVAL SUPPLY CENTERS
OVERSEAS *
CONUS
TARGET UTILIZATION GOALS
By 30 Sep 1980
30%
25%
2%
2%
40%
35%
Yearly Increment
By 30 Sep 1985
lower due to noncommercial
repair
*The overseas MHE utilization goal is
and
sources
supply
of
availability
5:Encl.l].
[Ref.
facilities.
These utilization goals were established to maximize
effective
application of MHE while considering the varied
As these goals are attained
functions performed by NSC's.
the MHE inventory throughout the Navy should decrease.
3
•
Annual Report
.
The primary source of information that SPCC uses to
make
allowance,
procurement,
budgeting,
and
decisions concerning MHE is the Annual Report.
15
replacement
On or about
September of each year SPCC requires all activities with
MHE to
fill
out an MHE ON-BOARD
(SPCC-10490/2)
(see
Appendix
C)
(UPDATE
.
These
past fiscal year usage and inventory data.
data
includes downtime,
INFORMATION)
forms
form
reflect the
Other pertinent
material condition code,
months on
board, current hour meter reading and repair costs.
In
addition,
authorized MHE
each
activity
a
inventory
for
the
computer
from
SPCC
purpose
26
listing
files
of
is
of
current
forwarded
comparing
to
on-board
Current SPCC policy
equipment with authorized allowances.
inventories match authorized allowances.
requires that MHE
SPCC requires that all excess equipment be reported as part
(see Appendix
of the Annual Report form on Standard Form 12
D)
Delivery
.
equipment
holding
allowance.
excess
in
equipment
If
not be made to
new MHE will
of
the
of
needs
exceed
activities
authorized
total
the
allowance,
an
allowance change request with complete justification must be
submitted to SPCC
via the respective activity's
(Code 0302)
major claimant.
Return
of
these
forms
to
SPCC
by
15
November
is
essential because the data contained on these forms are used
in
the
preparation
of
MHE
procurement budgets
and
in
the
determination of an individual activity's priority for the
replacement of MHE.
4
.
Budgeting
Budgeting
for
MHE
is
between
divided
requirements and replenishment requirements.
initial
The respective
major claimant is responsible for budgeting and funding all
its
activities
increased
initial MHE
mission
requirements to support new or
These
responsibilities.
new
allowance
requirements are incorporated and prioritized by the major
claimant into its total Program Objectives Memorandum (POM)
requirements for a given year.
Replacement
approved
allowances
requirements
are
SPCC's
27
for
MHE
in
responsibility.
existing
MHE
replacement
figure
budget
reached
are
or
for
exceeded
Therefore, the over-age position of the
determines
fleet
SPCC
to
have
which
MHE
in-use
of
their economic age.
MHE
assigned
responsibilities
budgeting
the
future
for
Navy
Procurement,
Other
replacement
of
The
MHE.
(OPN)
MHE
program goals established by NAVSUP and the Navy Comptroller
are less than
2
0% over-aged MHE ashore and no over-aged MHE
on board ship [Ref.
8].
To calculate the projected number of units of MHE to
replace in a given year, while maintaining these goals, SPCC
uses
Budget
a
Simulation Model
(BSM)
Some
.
the
of
more
significant parameters used in the model include the current
current replacement costs,
year of manufacture,
inventory,
life spans, MHE due in and funds available in a given budget
recommends buys for the projected oldest
The model
year.
units of MHE in each category of equipment cost code.
8: p.
[Ref.
The BSM enables SPCC to make sound and reasonable
1]
budgeting decisions for future years.
5
Replacement
.
MHE replacement decisions are made by SPCC based on
Department
of
These
incorporated
are
criterion,
Defense
MHE
is
to
replacement
age
and
factors
in
retired
accumulated repair cost,
relative
criteria
(DOD)
the
well
as
replacement
provide
28
the
on
as
Appendix
According
BSM.
based
(see
its
age,
to
B)
.
this
condition,
one-time repair costs
cost
of
equipment.
The
manager
with
program
criteria
explicit
to
determine
consistently
economical time of replacement.
most
the
past repair records
First,
are reviewed to determine if the equipment has required an
unusual amount of maintenance.
Secondly, MHE utilization is
ensure that the equipment
reviewed to
is
adequately used.
Thirdly, the annual report provides information on equipment
condition
their
and
equipment.
recommendation
comparing
By
to
replace
information
this
or
to
retain
the
DOD
the program manager at SPCC makes a rational and
criteria,
objective decision on which units of MHE should be replaced.
[Ref.
9:p.
1]
Further
discussion
of
the
DOD
MHE
replacement
philosophy is provided at the end of Chapter III.
Chapter IV,
concept
a
from
Then,
in
comparison is made between the economic life
the
private
sector
concept for forklift trucks.
29
and
the
DOD
replacement
III.
MAINTENANCE AND REPAIR
INTRODUCTION
A.
The successful operation of material handling equipment
quality
dependent upon proper periodic maintenance and
is
The frequency of repairs required is directly
repair work.
related
amount
the
to
type
and
of
usage
as
well
the
as
quality of preventive maintenance services performed.
The
preventive maintenance system has been effective in prolonging
the
life
of
interruptions,
minimizing unscheduled service
equipment,
and promoting
minimizing replacement costs,
the effective use of maintenance manpower.
The purpose of this chapter is to describe the Navy's
preventive maintenance policies and procedures pertinent to
the
operation
and
Supply Centers.
described
handling
Also,
since
of
MHE
used
with
a
Naval
at
repair cost estimates and limits are
repair
costs
are
discussion
of
significant
a
considered in the replacement of MHE.
ends
ashore
factor
Finally, the chapter
non-standardization
two
and
approaches for determining when to replace a unit of MHE.
A brief
gain
a
definition of
several
terms
is
appropriate to
better understanding of the discussion to follow.
Preventive Maintenance
— Preventive
Maintenance
is
that
maintenance which is the responsibility of and performed by
a
using organization on its assigned equipment.
30
It consists
of
the
inspection,
surveillance,
servicing,
adjusting,
and
lubrication of equipment in order to minimize breakdown and
keep equipment in good operating condition.
Corrective Maintenance
(repair)
— Corrective
maintenance
includes all maintenance required as a result of equipment
or parts
failure,
restore
to
unit
a
equipment back to
of
operational condition.
Organizational Level Maintenance
nance
is
operates
equipment
mainte-
maintenance performed at the site where the user
equipment.
the
performing
external
— Organizational
maintenance
adjustments
basically
It
limited
equipment
to
performance.
This
visual
to
and
level
consists
users
inspections,
periodic
does
of
checks
remove
not
of
and
replace components or repair equipment but forwards it to
the intermediate level
Intermediate
Maintenance
Level
— This
level
of
mainte-
nance is performed at a specialized shop located near the
Equipments
consumer.
are
repaired
by
the
removal
replacement of major assemblies and piece parts.
and
The basic
responsibility of the intermediate level is to provide onsite maintenance to hasten the return of equipment to active
status in an accelerated manner.
One-Time Repair Cost--One-time repair cost refers to the
limit
each
on
the
complete
cost
of
repair
corrective maintenance applicable to
job
performed on an
equipment.
The
intermediate level of maintenance determines the repair job
31
If the estimate does not exceed the DOD criteria
estimate.
If the repair estimate exceeds the
the repair is permitted.
criteria the equipment should be replaced.
cost limit
costs
is
Cost
Repair
Accumulated
the sum of all actual
incurred during the
accumulated
Limit--The
entire
repair
inspection and repair
life
of
the
item.
This
includes the price of parts actually consumed in the repair
the
process,
subassemblies
involved.
exchange
charge
10 :p.
complete
assemblies
or
and all direct and indirect labor
installed,
[Ref.
for
1]
With reference to repair costs, both the one-time repair
cost
and
the
accumulated
repair
cost
limit
are
values
imposed as part of the DOD MHE replacement criteria.
MAINTENANCE CONCEPT AND PLAN
B.
The
ll:p.
maintenance concept as defined by Blanchard
[Ref.
104]
delineates maintenance support levels, repair poliorganizational responsibilities for maintenance,
effectiveness measures (e.g., maintenance environment (s)
and is a principal factor in determining logistic support
requirements
.
.
.
cies,
He
further
indicates
that
this
concept
has
a
three-fold
purpose:
It provides the basis for the establishment of
(1)
supportability requirements in system/equipment design.
It also provides design criteria for major elements of
logistic support (e.g.
test and support equipment, large
,
facility, etc.
)
It provides the basis for the establishment of
(2)
requirements
for
the
total
logistic
support.
The
maintenance concept, supplemented by the logistic support
32
analysis,
leads to the identification of maintenance
tasks, task frequencies and times, personnel quantities
and skill levels, test and support equipment, spare/repair
parts, facilities, and other resources.
It provides a basis for detailing the maintenance
(3)
plan and
concept,
support,
production
The
training
impacts upon the supply concept,
services,
phased
logistic
supplier/ customer
criteria,
and
and
handling
transportation
[Ref. ll:pp. 104-105]
data needs.
current MHE maintenance concept
requires that
all
operating equipment be maintained in a safe and serviceable
condition in accordance with the Materials Handling Equipment
Maintenance
Manual,
Publication
NAVSUP
respective manufacturer's technical manual.
that
and
538,
the
The subsections
follow present a broad description of the specifica-
tions from NAVSUPUB 53 8.
1.
Preventive Maintenance Schedulincr
preventive
The
maintenance
plan
must
be
based
on
actual equipment operation as measured by an hour totalizing
meter.
A well
maintenance
planned program also needs
staff.
However,
in
order
to
a
well trained
carry
out
the
preventive maintenance program in proper fashion sufficient
management authority must be in place.
The most significant
part of a preventive maintenance scheduling program is the
requirement for an accurate record keeping system in order
to
record
repair
requests
and
record must be kept up-to-date
and
must
be
periodically
maintenance
for
This
of
equipment
general
equipment
for each unit
reviewed
steps.
condition and indications of repetitive failures in the same
component.
33
It is more efficient to group equipment with similar
The maintenance
utilization patterns by maintenance cycle.
determines
cycle
maintenance
for
scheduling
the
each
frequency
Table
group.
II
of
preventive
displays
the
preventive maintenance cycles and schedules.
basic
10:p.
four
[Ref.
27]
TABLE II
PREVENTIVE MAINTENANCE CYCLES AND SCHEDULES
PM
CYCLE
DEFINITION
B
2
.
SCHEUDLE:
EVERY
Equipment operating under
adverse environmental
conditions
40 to 65 days or
100 to 260 hours
Equipment utilized over
100 hours per 65-day period
65 days or 260
hours
Equipment used less than
100 hours per 65-day period
130 days
Non-powered
90 days
Organizational Level Maintenance Responsibilities
primary
The
responsibility
for
preventive
maintenance belongs to personnel at the organizational level
maintenance
of
Daily,
prior
to
who
operate
placing
material
the
equipment
handling
in
equipment.
operation,
operator is responsible for:
a.
Checking fuel, coolant, and crankcase oil levels.
b.
Checking operation of lights, brakes, windshield
wipers, gauges, horn, and hydraulic controls.
34
the
c.
condition
Checking tire pressure,
external condition of equipment.
d.
Cleaning the outside of the radiator with compressed
air if applicable.
e.
Ensuring required safety equipment is on the equipment.
This consists of a first aid kit and a fire
extinguisher.
[Ref. 10 :p. 3]
tires,
of
In addition to these daily checks,
and
the operator is
responsible for ensuring that the equipment is never overBy exceeding a truck's rated load capacity,
loaded.
strain
placed
is
component
all
on
added
maintenance
parts,
increases, and the life of the equipment is shortened.
Before personnel can become qualified operators they
must receive training in the safe and proper operation of
DOD Instruction 4145.19R-1 outlines
MHE.
the-job
licensing
training,
and
become qualified operators of MHE.
included in this course are:
tests;
a
physical
testing
of
course of on-
personnel
to
Some of the requirements
hearing and reaction
vision,
examination;
a
fundamental
advanced
and
training in fork truck operation; and operating rules [Ref.
E-11]
12 :p.
.
proper
The
training
of
operators
can
contribute to minimizing the need for equipment maintenance
and repair.
3
.
Intermediate Level Maintenance Responsibilities
The
corrective
intermediate
direct
responsibility
maintenance
level
is
assigned
maintenance
35
for
to
shops.
preventive
personnel
These
and
of
the
shops
are
normally located in close proximity to normal MHE operations
to afford timely repair and reduce downtime.
MHE
When
brought
is
into
shop
a
for
preventive
maintenance service an inspector performs a thorough review
of the equipment in accordance with the Preventive Mainte-
nance Guide (NAVSUP From 1377, see Appendix
this
uses
tor
provide
form
record
a
services
of
maintenance
assign
to
performed,
records
maintenance
servicing
and
NAVSUP
to
can
be
The inspec-
.
responsibility,
indicate
and
the
By referring to past
specific areas that require servicing.
maintenance
E)
Form
limited
to
1377,
preventive
specific
items.
This procedure eliminates the overservicing that is common
when maintenance history is not considered.
If,
ments
or
however,
the inspection indicates major adjust-
corrective repairs,
Shop Repair Order
(SRO)
inspector will prepare a
the
(NAVFAC 11200/3A,
see Appendix
F)
.
This form outlines the required maintenance for the equipment,
identifies the work center responsible, and lists the
cost of labor and material.
An individual history jacket for each piece of MHE
is
maintained
by
the
maintenance
The
shop.
information
contained in this jacket provides a complete history of the
service life of the equipment.
of
the
hours
materials,
of
operation,
inspection
data
the
from
Shop Repair Orders.
36
Information filed consists
costs
NAVSUP
of
maintenance
Form
1377
and
and
all
The maintenance shop also has the responsibility of
maintaining
the
manufacturer's
technical
manuals.
This
consists of updating the manuals upon receipt of manufacturer's changes related to maintenance procedures or safety.
These manuals provide the manufacturer's recommended
maintenance
procedures,
time
schedules,
principles of operation,
schedules,
lubrication
trouble shooting guide,
repair instructions and other useful maintenance data relaThe manuals also contain
tive to the specific unit of MHE.
an illustrated parts breakdown of assemblies and a complete
parts list.
4
Repair Time Standards
.
standards
Repair time
have
been
established which
list the actual steps to be performed and the average times
The time standards for the
required to perform those steps.
repair,
overhaul,
and preventive maintenance of MHE are to
be utilized as management tools
for the purpose
of
estab-
lishing a measurement and comparison of the time actually
consumed
on
maintenance
This
operations.
information
assists in evaluating the effectiveness of first line super-
vision in monitoring repair work and it helps to measure the
productivity of labor forces.
tion
538
contains
the
Chapter
repair time
common units of MHE.
37
4
of NAVSUP Publica-
standards
for
the
more
Quality Deficiency Report fODR)
5.
The Quality Deficiency Report (Standard Form
used
by
Nayal
all
performance
actiyities
used
be
to
inadequacies
report
G)
in
design
faulty
to
material in an equipment (see Appendix
also
68)
is
reporting unsatisfactory
attributable
failures
or
for
3
or
This report can
.
the MHE
technical
manual
If a defectiye equipment is still under the manufac-
turer's warranty the local seryice representatiye should be
correct
notified
to
extends
for
deliyery.
a
deficiency.
the
period
fifteen
of
standard warranty
A
months
from
date
of
which may later become apparent
Latent defects,
by causing failure or nonusability of the item well within
nonnal service life expectancy,
warranty.
In either case,
are also covered under the
QDR should be submitted.
a
According to NAVSUP Publication
538,
a
QDR may be
initiated for any of the following reasons:
a.
The
deficiency
equipment.
b.
The design of certain parts considered necessary for
proper operation, maintenance, or handling of equipment is imperfect.
c.
The deficiency is a result of excessive deterioration
sooner
than
expected
under
normal
operating
conditions.
d.
Defective material
deficiency.
poses
a
is
the
threat
to
apparent
personnel
cause
of
or
the
When a deficiency occurs, a QDR is submitted to SPCC
for technical
review.
SPCC then
38
forwards the QDR to DCSC
investigation
for
resolution.
and
The
QDR provides
SPCC
with a feedback mechanism to highlight and identify MHE and
technical manual deficiencies.
NON-STANDARDIZATION
C.
Two problems that complicate maintenance of MHE are the
usage
procuring
specifications
performance
non-standard
of
in
unit of MHE and the supply support the equipment
a
receives during its lifetime.
Non-standardization
1.
A common problem that exists today is the usage of
the non-standard performance specification
ment
of
included
the Request
in
specification
performance
A
MHE.
Contractual
for
the procure-
in
is
a
document
Procurement
(RCP)
that sets forth the criteria or standards of performance of
It expresses criteria in terms of functions
a piece of MHE.
to
be
performed
such
capacity
operation,
function
inventiveness
imagination
and
resulting
can
13 :p.
lead
to
further
in
speed
precision,
of
environmental
levels,
performance
and
specification [Ref.
procurement
degrees
protection
of
and
The degree of restriction in describing
quality standards.
the
as
6].
limited
is
the
of
writer
In addition,
another
by
only
devising
the
the
each successive
manufacturer
non-standardization.
and
design
Finally,
maintenance costs rise due to the inefficiency of requiring
mechanics
to
be
familiar
with
models of MHE.
39
many
different
makes
and
forklift
The
complex document.
T-21868B for
a
specifications
tests.
standards,
[Ref.
59
standards,
9
combinations
of
and
different
extensive
and
inspections,
and
tests
a
shipboard diesel forklift truck refers to 27
industry
separate
is
military specification MIL-
For example,
Federal/Military
other
specification
truck performance
physical
performance
13]
The difficulties associated with an over-specification such as this
are
extensive.
the manufacturer
First,
must be capable of interpreting the intertwined and cross-
referenced specifications.
access to testing
Second,
he must possess or have
facilities that include a 542
feet
long
track complete with obstacles; salt water fog equipment; and
a
hi-shock (vibration) testing capability.
2
Supply Support
.
The Navy's MHE
inventory includes approximately 66
types of equipment and 87 different manufacturers.
of
this
non-standardization,
increasingly difficult.
receives
(APL)
a
must
contract
be
for
produced
repair parts
Each time
MHE,
for
a
that
a
Because
support becomes
different manufacturer
new Allowance
buy
of
MHE.
Parts
In
List
turn,
provisioning for the range and depth of spare parts must be
accomplished for each APL.
that
involves
screening
This is a time consuming process
manufacturer's
part
numbers
descriptions to determine if a National Stock Number
40
and
(NSN)
already exists for those items.
When an NSN does not exist,
one is assigned.
This
from APL
entire process,
initiation to
spare
parts being available at a stock point, averages between one
to
three
years.
activity
new equipment
Therefore,
could be
down
for
before
time
long
a
received by an
the
spare
parts are available in the supply system.
Requisitioning parts through the Navy supply system
is
also
time
consuming,
causing
downtime
increase.
to
Fortunately, an activity can use the open purchase method to
obtain
spare
parts
With
equipment.
achievement
activity's
possible.
utilization
priority
top
Therefore,
rather than
available
to
is
open
within
one
or
being
goals
[Ref.
of
on
the
2:p.
3],
the
reduce downtime as much as
has
become
Because
such
spare parts
two
that
placed
purchase
exception.
the
dramatically.
emphasis
great
MHE
of
manufacturer
local
the
from
days,
downtime
the
is
rule
are
reduced
Unfortunately, open purchasing has a negative
impact in two ways;
first,
it places a heavy paperwork load
on an activity's supply department;
and second,
the supply
system is deprived of demand being recorded against the DLA
managed
items,
resulting
in
these
spare
parts
inventory
levels being reduced.
Older units of MHE also experience a distinct lack
of
supply
decrease,
support.
As
the
numbers
of
old
equipment
recorded demand for their respective spare parts
41
Thus, parts may not be on the shelf
decreases dramatically.
to fill
the part is probably obsolete due to upgraded or
business,
changed
Even if the manufacturer is still in
requisitions.
design
of
the
The
equipment.
part
must
then
be
fabricated, which is very costly and time consuming.
D.
REPAIR COSTS AND REPLACEMENT
The repair costs are important for determining when to
replace DOD MHE.
The accumulated repair cost and the one-
time repair cost are used together with other criteria to
determine the most economical time of replacement.
The
following
subsections
explain
the
methodology
for
They also provide a descrip-
making repair cost estimates.
tion of the DOD methodology used
in
making MHE repair or
replacement decisions.
1
.
Repair Cost Estimates
Prior to performing major corrective
unit of MHE
(i.e.,
repairs
on
a
engine overhaul), a repair cost estimate
must be considered to determine if it is more economical to
repair or to actually replace the equipment.
DOD instruc-
tion 7220.21 prescribes the uniform procedures for obtaining
repair cost estimates.
Four elements of cost are used in
estimating the repair cost:
indirect expenses
and
direct
specifically
performed.
and
material
applied
direct labor,
direct material,
other direct charges.
are
and
that
labor
identified
and
to
Direct
material
the
labor
that
repair
is
job
The indirect costs include administrative costs
42
the manufacturing
and
can be
or
production expense
identified to the maintenance shop.
charges"
contractual
include
services,
"Other direct
preparation
shipment, and freight (if shipped overseas).
It
is
batteries,
included
incurred that
[Ref.
for
14:p.
6]
important to note that such items as tires,
tire
chains,
repair
the
in
and
antifreeze
estimate
cost
not
are
be
to
except
where
replacement is the result of accident damage.
2
.
Repair Cost Limits
As stated in Chapter II,
governed by
the
DOD
the replacement of MHE is
constraints
contained
Appendix
in
B.
These are designed to avoid excessive expenditures for the
The decision to replace or repair equipment
repair of MHE.
is
basically straightforward using these limits.
However,
other factors should also be considered.
When a unit of MHE requires repairs which exceed the
DOD constraints
further
no
will
for one-time,
repair
usually
be
expenditure
retired
from
or accumulated repair costs,
is
permitted,
operational
and
use.
the
item
However,
retirement will not be effected if:
a.
The required repairs exceed the maximum cumulative
cost limit, but will extend the life of the equipment
for a period comparable with the expenditure required.
This decision is made at the individual activity
level.
SPCC closely monitors equipment that meet this
criterion.
b.
The item is beyond the maximum utilization years and
any one-time repair cost does not exceed 10% of the
current replacement cost.
In addition, the maximum
[Ref. 10 :p. 8]
cumulative limit must not be exceeded.
43
This procedure can best be demonstrated and under-
with
stood
manufactured
in
1983
costing
tires,
estimated
an
Appendix H lists the current replacement cost of
$6,200.
According to the DOD criteria
this type of MHE as $12,500.
in
capacity,
pneumatic
with
repairs
needs
pounds
4000
a
truck
forklift
powered
gasoline
Suppose
example.
an
Appendix
the
B,
maximum allowable one-time repair cost
limit is 40% of current replacement cost or $5,000.
should
equipment
the
be
unless
replaced
one
Thus,
two
the
of
exceptions listed above can be applied.
ECONOMIC LIFE OF MHE AND REPLACEMENT
E.
In the private sector the determination of the economic
life of a unit of MHE is used in deciding upon the most cost
effective
replacement of that unit.
90]
,
advantageous
most
therefore,
and,
time
According to Chester [Ref.
for
15 :p.
the "economic life" of MHE is the point at which it has
attained its maximum use for the least cost.
Maximum use is
defined
equipment when
as
that
point
in
the
life
of
the
utilization of the equipment is consistently high.
usually
much
shorter
than
the
"useful
This is
which
life"
he
describes as somewhere in the 10 to 15 year range, depending
on
the
kind
of
maintenance,
the
amount
of
usage
and
the
environmental working conditions experienced.
Tracking the economic life of a piece of MHE requires
the determination of two cost com.ponents:
ownership.
Typically,
operating
as
44
maintenance and
hours
accumulate,
maintenance costs rise while ownership costs fall.
In this
discussion, the ownership cost is the difference between the
purchase price of the equipment and its salvage value when
traded in.
For example, assume a unit that cost $12,000 new
and operates
for 8,000
engine hours over five years.
industry standard trade-in value of
2
is
0%
The
subtracted from
the original price to determine the ownership cost of $9,600
or $1.20 per engine hour.
The cumulative maintenance cost is the total of mainte-
nance
labor
Suppose,
and
for
material
this
cost
from the
that
example,
date of delivery.
total
the
is
$7,000.
Dividing by the engine hours results in a total maintenance
The total cost per cumulative
cost per engine hour of $.87.
engine hour is therefore $2.07.
Andrew
[Ref.
16 :p.
2]
states
that
the
lowest
total
cumulative cost per engine hour is the time for MHE replacement.
Figure 3.1 shows the curves of ownership and mainte-
nance costs as a function of engine operating hours for the
example.
It
also
shows their total.
The value of
$2.07
precedes the equipment's lowest cumulative cost per engine
hour and replacement is therefore unnecessary.
replacement
time
is
that
point where
the
The optimal
maintenance
and
ownership hourly costs are equal; approximately 9600 hours.
45
3.00
2.75
ance
6
8
10
12
14
16
Thousands of engine hours
Figure 3.1
Optimal Operating Point of MHE
46
18
20
THE CURRENT STATUS OF NAVY FORKLIFT TRUCKS
IV.
order
In
maintain
a
develop
to
recommendations
to
improve
and
high quality MHE fleet, an analysis was conducted
by the author to ascertain the current state of MHE.
The
size of the Navy's MHE inventory and the lack of available
time limited the scope of this analysis to the Navy's eight
Naval Supply Centers.
The scope of the statistical analysis
was
to
further
limited
forklift
trucks,
since
forklift
trucks are considered to be the logistic workhorses of the
Forklifts comprise over 75% of the total MHE fleet
Navy.
and approximately
stated
in
Chapter
80%
of
I,
the
the NSC
data
used
in
as
was
analysis
was
Finally,
fleet.
this
acquired from the fiscal year 1985 Ashore Activity Verification and Allowance Listing Report produced by SPCC.
This chapter will present and discuss the results of the
It will also address compliance with
statistical analysis.
DOD
replacement
criteria,
the
achievement
of
utilization
goals and the current status of the NSC forklift fleet with
regard
to
economic
The
life.
statistical
analysis
is
limited to comparing the sample average values.
A.
AVERAGE AGE
As
was
stated
in
Chapter
II,
the
projected
over-age
position of the MHE fleet helps to determine the amount of
funds budgeted
for the procurement
47
of
new equipment.
The
is an important factor in managing an
age of MHE, therefore,
equipment replacement program.
An
view
overall
activities
is
of
provided
forklift
age
Table
in
at
III.
all
Naval
shore
This
table
is
a
snapshot of the age distribution of forklift trucks on hand,
by year of manufacturer, as of 30 June,
Based on NAVSUP
'
s
definition,
MHE
is
1986 [Ref.
17:p.
over-age when
it
3].
"is
beyond the maximum utilization years of economical use as
shown in" Appendix B
[Ref.
10:p.
9].
It can be seen that
33% of the forklifts with a life span of both eight and ten
years
are
over-aged.
24%
of
the
forklifts having an age
life of fifteen years are over-aged.
TABLE III
FORKLIFT AGE DISTRIBUTION
1971
&
#
of trucks
yr life)
of trucks
(10 yr life)
of trucks
(15 yr life)
(8
#
#
#
of trucks
yr life)
of trucks
(10 yr life)
of trucks
(15 yr life)
(8
#
#
prior 1972
363
47
104
1973
1974
1975
1976
48
8
139
19
1
27
11*
50
1977
1978
127
156*
36
74
114
113
401*
11
85
13
37
34
1979
1980
1981
1982
1983
1984
1985
1986
221
522
145
227
258
322
135
105
1
27
50
12
41
69
13
2
106
78
164
139
127
149
133
1
*Over-age trucks include this year and all prior years.
48
It
significant to note that almost half of these over-
is
aged forklifts are sixteen years old and older.
These
greatly
figures
over-aged MHE ashore.
exceed
NAVSUP
the
goal
of
2
0%
Based on the 743 additional forklifts
in the eight year life category that will become over-age in
two years,
it
is
likely that the over-age position of this
category of forklifts will be degraded even more.
Table IV shows the average age of
the percentage of over-age
eight
Puget Sound
eight
The
NSC's.
(NSCPS)
forklift trucks at each of the
NSC's
Naval Supply Center Jacksonville (NSCJ)
typical
,
NSCJ
(NSCP)
Naval Supply Center
,
(NSCSD)
Naval Supply Center
,
and Naval Supply Center Norfolk (NSCN)
forklift
years.
Center
Naval Supply Center Charleston (NSCC)
,
Naval Supply Center San Diego
Oakland (NSCO)
Supply
Naval
are:
Naval Supply Center Pensacola
,
Pearl Harbor (NSCPH)
forklift trucks and
and
total
the
in
NSCSD
meeting NAVSUP 's goal
are
of
inventory
NSC
the
two
only
less than
2
.
averages
Supply
The
7.2
Centers
over-age equipment
0%
ashore.
Once an equipment reaches or exceeds its expected life
span,
considers
SPCC
it
over-aged.
The
life
spans
for
various types of forklifts and other MHE are contained in
Appendix
These
B.
over-age
equipments
are
cost
not
continued operation because
maintain
for
probably
obsolete
or
difficult
49
and
effective
repair parts
costly
to
to
are
obtain.
TABLE IV
AVERAGE AND OVER-AGE OF FORKLIFTS
Average Age
# Trucks
on hand
NSCPS
NSCP
NSC J
NSCPH
NSCC
NSCSD
NSCO
NSCN
(in years)
# Trucks
over-age
% Trucks
over-age
13
18
11
29
24
25.5
30.0
13.3
31.9
21.8
14.5
23.1
24.0
7.4
8.9
5.7
7.8
7.2
6.3
6.9
7.6
51
60
83
91
110
186
321
630
27
74
151
Replacement of over-aged equipment with new and more efficient
models would reduce excessive costs attributable to
maintenance
preventive
repair,
and
However,
downtime.
replacement of over-age equipment cannot apparently occur in
sufficient
because
numbers
constraints
and
activity's
an
of
procurement
own
recommendation
funding
not
to
observed,
a
replace.
As
SPCC
an
assistant
program
manager
forklift that is over-age and qualifies for replacement is
sometimes
retained by an activity because
costs
downtime are
and
its
Although this
low.
maintenance
is
in
keeping
with the DOD criteria, it raises the over-age percentage of
the MHE population.
In
addition,
the
mechanic
is
very
familiar
with
the
maintenance history of the equipment which helps to reduce
maintenance
costs
and
downtime.
5.0
The
replacement
of
the
forklift with a new version would require the mechanics to
spend time learning how to maintain the new one.
B.
FUNDING FOR PROCUREMENT
Table
funds
V
displays
budgeted
respective years.
for
the
ashore
procurement
over-age
of
new
status
MHE
and
for
the
those
Funding increased dramatically for fiscal
year 1981 and the following years.
This caused the over-age
percentage of forklifts to drop accordingly.
TABLE V
FORKLIFT FUNDING AND POPULATION OVER-AGED
FISCAL YEAR
BUDGETED
OVER-AGE
$
(millions)
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
15.9
14.5
18.7
17.5
23.6
20.6
24.0
25.7
23.0
8.6
9.5
19.8*
15.8*
15.6*
15.6*
14.6*
48
45
43
40
37
38
30
26
23
36*
39*
34*
37*
41*
47*
48*
*Projected
It appears that
Figure 4.1 plots the data in Table V.
an
increase
or
decrease
in
51
funds
has
a
direct
impact,
although not linearly or even consistently,
tage
of
over-age
forklift
projected funding figures,
Navy-wide.
the
on the percen-
Based
on
reduced
future percentages of over-
age forklifts ashore can be expected to climb dramatically.
C.
DOD REPLACEMENT CRITERIA COMPLIANCE
Chapters
DOD
to
II
and
III
economically
discussed the methodology used by
replace
examines the repair costs,
This
equipment.
downtime,
section
and accumulated repair
costs of MHE located at the Navy's eight NSCs in an attempt
to
identify the extent of compliance with the DOD replace-
ment criteria.
1.
Average Repair Cost
The average cost of repairing forklift trucks in FY
1985, per Supply Center,
is illustrated in Table VI.
TABLE VI
FY
#
85
AVERAGE FORKLIFT REPAIR COST
trucks
on hand
NSCPS
NSCP
NSC J
NSCPH
NSCC
NSCSD
NSCO
NSCN
51
60
83
91
110
186
321
630
Total
Repair Cost
1
52
$43,047
36,854
84,450
157,286
152,467
85,422
462,099
,070,540
Average
Repair Cost
$844
614
1,018
1,728
1,386
459
1,440
1,699
52
34
1
48-
30
44
40
26
-
-
Sercent
ver-aged
,
^
x
-
22
u
^36
18
0)
cn
(C
sL
32
XJ
14
eDlacement
0)
uac
>
o
c28
(u
'
10
<u
o
u
3
p-
24
ca
6
2077
79
81
83
85
87
89.
91
FISCAL YEAR
Figure 4.1
Actual and Projected Forklift Funding
and Over-aged Percentage as a Function
of Fiscal Year
53
Average repair costs range from a high repair cost of $1728
per truck at NSC Pearl Harbor to an extremely low $459 per
truck at NSC San Diego.
The
average
cost
will
vary
the
number
per
and
NSC
age
depending
of
on
forklift
several
factors
trucks,
the quality of the preventive maintenance program,
the knowledge
such
and
as:
level
skill
of
operators and mechanics,
and whether the repair work is done at the organizational or
intermediate
During
level.
research
a
the
trip,
author
noted that MHE maintenance at NSC San Diego is performed at
organizational
the
major
overhauls
level
(Public
which
Works
level maintenance
(PWC)
with
level
is
exception
the
performed
are
Center)
In
.
of
one-time
the
intermediate
contrast,
intermediate
at
performed by the Public Works Center
for all of NSC Oakland's MHE.
Although NSCSD has 42%
less forklift trucks than NSCO, a quick comparison suggests
that organizational maintenance is more cost efficient than
intermediate maintenance.
It is significant to point out that five out of the
eight Naval Supply Centers use PWC as the intermediate level
of maintenance
for MHE.
Of the remaining three,
NSCSD and
NSCPH use the organizational level of maintenance and NSCJ
recently contracted-out maintenance to a commercial firm.
2.
Average Accumulated Repair Cost
Table
VII
lists
the
average
repair cost for fiscal year 1985.
54
forklift
accumulated
The total repair cost is
the
summation
forklifts
of
lifetime repair costs
for
the
number of
Dividing this value by the number of
present.
trucks on hand gives the average accumulated repair cost per
truck.
TABLE VII
FY
85
AVERAGE FORKLIFT ACCUMULATED REPAIR COST
#
trucks
on hand
NSCPS
NSCP
NSCJ
NSCPH
NSCC
NSCSD
NSCO
NSCN
Once
51
60
83
91
110
186
321
630
again,
NSCSD
has
the
Total Accum
Repair Cost
Avg Accum.
Repair Cost
$207,436
201,751
362,536
614,360
738,085
492,752
1,922,961
4,242,660
$4,067
3,363
4,368
6,751
6,710
2,649
5,991
6,734
lowest
repair
.
cost
per
truck.
Comparing the NSC over-age percentage in Table IV with the
accumulated repair cost in Table VII, there appears to be
a
direct correlation between NSCSD 's low over-age percentage
and low repair cost per truck.
The correlation also exists
between NSCPH 's high over-age percentage
and high
accumu-
lated repair cost.
3
.
Average Downtime
The average downtime per forklift,
1985,
is
presented in Table VIII.
for fiscal year
Downtime hours refer to
the total hours the equipment was not operating due to being
repaired or while waiting for required repair parts.
55
In the
interviewed at NSCSD and
personnel
of maintenance
opinion
waiting for repair parts was the dominant factor of
NSCO,
the downtime figure.
shown
As
in
Table
average
the
VIII,
downtime per Supply Center ranges in value from
truck
at
Pensacola
NSC
to
hours
289
truck
per
NSCJ has the lowest average age of forklifts.
difference
large
hours per
2
at
in
Because of
average downtime between NSCP and
the cause of this difference should be examined
NSCJ,
possible
NSC
This is noteworthy considering the fact that
Jacksonville.
the
forklift
application
in
reducing
overall
downtime
at
for
all
NSC's.
TABLE VIII
FY 85 AVERAGE FORKLIFT DOWNTIME
#
Trucks
on hand
NSCPS
NSCP
NSCJ
NSCPH
NSCC
NSCSD
NSCO
NSCN
4
(;
7,557
1,670
23,999
15,023
19,248
17,010
65,358
139,742
51
60
83
91
110
186
321
630
.
Avg
Downtime
(in hours)
.
downtime
in hours)
148
28
289
165
175
91
204
222
POD Criteria Compliance
The
replacement
basic
is
to
intention
prevent
of
the
DOD
maintenance
criteria
funds
expended on uneconomical or over-age equipment.
56
for
from
MHE
being
In order to
demonstrate
compliance
appropriate
to
with
combine
the
repair
DOD
criteria,
it
accumulated
costs,
repair
costs and downtime figures onto one graph, Figure 4.2.
illustrates
figure
Centers
do
that,
comply with
as
whole,
a
Naval
the
criterion because
this
is
This
Supply
each
curve
As the age of MHE increases, the dollar value
flattens out.
of maintenance associated with that equipment increases but
This implies that over-age equipment
at a decreasing rate.
is
maintenance
before
replaced
being
increase
costs
dramatically.
Additionally,
longer
the
MHE
is
operated,
the
greater the probability of parts failure and inability to
This leads to increased repair
acquire replacement parts.
Because such increases are not evident
costs and downtime.
in
Figure
4.2,
it
that
implies
also
MHE
is
replaced
in
accordance with the DOD criteria.
D.
UTILIZATION GOALS
The
five-year plan
established by SPCC
utilization was presented in Chapter II.
MHE
utilization goals
CONUS and 35% overseas.
Center.
for
all
MHE
as
increasing
This plan set the
Supply Centers
for Naval
at
40%
in
These goals were to be achieved by
Table IX lists the utilization
the end of fiscal year 1985.
rates
for
of
30
September,
1985,
per
Supply
Forklift utilization rates are also presented to
demonstrate
their
importance
in
Center's overall utilization rate.
57
determining
a
Supply
The utilization rate was
(sjnoq UT)
9uiT:;;uMoa
^
a,
rH
r'
g
0)
3
u
4J
u
n3
m
(t:
•H
4-1
r^
3
^
0)
•H
^-1
in
r~
<4-l
u
IT]
0)
r»
r>
>>
CD
e
(U
Jj
f3
r^
(Ti
r~
^U
c-H
a.
0)
c:;
Cm
r-f
00
Q
Q
o
CM
ro
•
00
U
in
CO
o
o
o
o
o
o
^M
OJ
SJLSOD
HIYdZH 3D^3AV
o
o
o
o
o
^
o
O
-H
,H
o
o
o
o
o
kO
-^
Si SOD aiVd3"<i IViIOi
58
o
o
Cn
determined by summing the accumulated hours of operation and
dividing by the hours available in
a
year
(2000)
for each
unit of equipment.
TABLE IX
FY
85
MHE VERSUS FORKLIFT UTILIZATION
# MHE
on hand
NSCPS
NSCP
NSC J
NSCPH
NSCC
NSCSD
NSCO
NSCN
As
40%
is
#
%
106
134
213
405
829
shown,
%
Utilized
40.7
31.1
30.7
30.0
32.1
34.0
23.5
29.0
51
60
83
91
110
186
38
27
31
27
36
33
23
22
62
63
93
Trucks
on hand
Util ized
321
630
none of the NSC's achieve the Navy's goal of
utilization,
although NSCPS
and NSC
Charleston
(NSCC)
were close at 38% and 36%, respectively.
An interview with the MHE Maintenance Branch Foreman at
NSCSD indicated one possible factor that contributes to low
utilization.
That
totalizing meter.
the average,
tion.
is
factor
is
the
replacement of the hour
Hour totalizing meters are replaced,
on
every two to three years depending on utiliza-
When an hour meter is replaced, the old meter reading
frequently not recorded.
At the end of the fiscal year,
the reading on the new meter is recorded in SPCC's Annual
Report.
Thus, utilization for that year drops.
59
Another cause of low utilization is that some forklifts
cannot be supported on a utilization basis due to isolated
locations
operating
18: p.
[Ref.
the requirement to handle material at a
However,
5].
requirements
mission
unique
and
remote location must still be satisfied.
The physical layouts of various activities prohibit the
pooling
of
example,
For
MHE.
there
NSCSD,
at
are
four
separate locations all of which require forklifts to perform
separated
by
locations
These
missions.
their
approximately
five
or
geographically
are
more
miles
from
each
other which makes the pooling of forklifts impractical.
Table X lists the actual utilization of specific units
of
several
types
forklift
of
trucks
in
the
current
NSC
inventory which have reached or exceeded their expected age
in
The
years.
number
years
of
operate
the
of
expected
associated
usage
column
equipment was
accordance with SPCC Instruction
in
"expected
years
total
hours
of
usage"
column
is
lists
expected
10490.2.
calculated
the
to
The
by
multiplying the expected number of years by the available
hours
in
a
year
(2000)
.
The result is then multiplied by
the 40% utilization goal for Supply Centers to arrive at the
total number of hours the unit of MHE is expected to operate
in its life.
The four examples were selected to demonstrate
the "worst case" under-utilization of MHE.
The inefficient utilization of MHE is shared by all the
NSC's.
Table
XI
lists
data
60
concerning
the
numbers
of
TABLE X
EXPECTED UTILIZATION VERSUS ACTUAL UTILIZATION
ACTUAL USAGE
EXPECTED USAGE
Equipment
Total
hours
8
6,400
11
2,533
40%
8
6,400
11
1,804
28%
15
12,000
16
4,501
38%
10
8,000
10
3,118
39%
Forklift, gas,
6,000 lbs.
Forklift, gas,
15,000 lbs.
Forklift, elec.
15,000 lbs.
Forklift, diesel,
15,000 lbs.
over-age
Expected
use
Total
hours
Years
which
equipment
have
Years
not
provided
the
hours
useful service anticipated when they were purchased.
of
These
figures were calculated in the same manner as those in Table
X.
TABLE XI
INEFFICIENT UTILIZATION
Over-aged trucks
not providing
anticipated hours
of service
#
# Trucks
over-age
NSCPS
NSCP
NSC J
NSCPH
NSCC
NSCSD
NSCO
NSCN
13
18
7
8
11
29
24
27
74
11
17
22
21
27
122
151
Over-aged trucks
not providing
anticipated hours
of service
%
53.8
44.4
100.0
58.
6
91.7
77.8
36.9
80.8
61
The
combined
magnitude
totals
inefficiency.
utilization
this
of
NSC's
eight
all
of
over-age equipments in the current inventory,
reveals
the
the
347
Of
235 units
of
MHE or 67.7% have qualified for replacement based on age but
have not operated the expected hours.
result
forklifts
over-age
that
It can be
increased
in
inferred
downtime
and
hence lower utilization.
E.
ECONOMIC LIFE ANALYSIS
Identifying the economic life of MHE is crucial to its
Continued repair and overhaul
productivity and replacement.
of
an equipment appears
surface to be a reasonable
on the
It must be realized,
method of extending MHE service life.
however,
that the longer the equipment is used, the greater
Increasing maintenance
the downtime and maintenance costs.
costs
ultimately
will
result
in
an
equipment's
economic
obsolescence.
Chapter III discussed the private sector's view of the
economic
life
of
MHE
as
being the point
maintenance costs equal ownership costs.
XII and XIII
in
time at which
The data in Tables
are presented to show the status of forklifts
based on this economic life concept.
Table
forklifts
XII
is
from
the
list
a
FY
1985
of
NSC
four
economically
inventory.
The
obsolete
ownership
cost per hour were derived by dividing the acquisition cost
by the accumulated engine hours and assumes no scrap value.
To
determine
the
maintenance
62
cost
per
hour,
the
total
accumulated maintenance costs were divided by the accumulated engine hours.
TABLE XII
ECONOMICALLY OBSOLETE FORKLIFTS
Equipment
Age
Accum.
eng.
hrs.
Forklift,
electric
Forklift,
gas
Forklift,
LPG
Forklift,
gas
These
Purchase
cost
Ownership
cost/hr
Maint.
cost
.81
$13,561
$1.67
Maint.
cost/hr
15
8141
$6,596
14
3543
7,081
1.99
12,260
3.46
21
11,439
3,855
.34
15,485
1.35
8
3193
8,650
2.71
11,864
3.72
economically
obsolete
forklifts
are
$
because
maintenance costs per hour are higher than ownership costs
per hour.
Under the private sector's concept of economic
life, these forklifts should have been replaced long ago.
Table XIII shows the percentage of the total NSC forklift
population
private
that
sector's
are
definition.
trucks is also presented.
at
NSCSD
aggregate,
to
353
a
economically
high
or
23%
of
of
The
obsolete
average
using
age
of
the
these
The values range from 5% obsolete
31%
obsolete
the total
at
NSCC.
In
the
Supply Center forklift
fleet is economically obsolete.
The DOD replacement criteria also appears to provide an
economic life model.
However, the basic difference
63
between
TABLE XIII
FY
#
85
ECONOMICALLY OBSOLETE FORKLIFT DATA
NSCPS
NSCP
NSC J
NSCPH
NSCC
NSCSD
NSCO
NSCN
51
60
83
91
110
186
321
630
Average age
% Trucks
obsolete
# Trucks
obsolete
Trucks
on hand
(in years)
17.5
19.8
16.4
15.5
12.6
13.3
12.8
13.4
16
17
10
29
31
8
10
8
26
34
10
84
173
5
26
27
the DOD and the private sector replacement philosophy is the
ownership cost.
is
the
difference
equipment
salvage
As discussed in Chapter III ownership cost
and
value
decisions,
the
its
is
between
the
salvage
value.
zero.
When
private
sector
purchase
For
this
making
uses
the
price
of
the
discussion
replacement
MHE
original
purchase
price whereas DOD uses the current replacement cost of the
equipment.
Because replacement costs usually increase every year,
use of the current replacement cost,
cumulative repair cost limit.
by DOD,
increases the
Therefore, total accumulated
repair costs can increase over the years and still
within the maximum cumulative repair limit.
remain
This eventually
leads to replacement of the equipment at an older age than
would be obtained from the private sector model.
64
The private sector ownership cost remains constant over
the years,
therefore,
replacement would occur at an earlier
age.
65
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
V.
A
.
SUMMARY
Reliable and readily available MHE is vital to all large
scale
military
supply,
Therefore,
operations.
maintenance
and
transportation
the need to improve the quality of
the Navy's MHE fleet cannot be over-emphasized.
This
presented
has
thesis
an
in-depth
review
of
the
Navy's current management policies, maintenance, concept and
plan, and replacement methodology for the present MHE fleet.
It has also analyzed the current status of Navy forklifts at
CONUS Naval Supply Centers to determine the average age and
over-age
of
MHE,
the
compliance with
DOD MHE
replacement
utilization rates and the extent of economically
criteria,
obsolete MHE.
The results of this analysis showed that a
significant percentage of forklift trucks are over-aged and
economically obsolete.
The findings of this thesis indicate the seriousness of
the
current
designed
to
prescribed
state
of
increase
goals
and
The
MHE.
utilization
to
also,
downtime.
66
proposed
in
an
reduce
solutions
attempt
to
repair
costs
are
attain
and
B.
CONCLUSIONS
Several
reviewing
conclusions
have
been
the current methods
reached
as
policies
and
result
a
of
maintaining
of
the Navy's fleet of MHE.
the Navy's forklift truck fleet is unusually old
First,
and
its
suggests
state
that the rest of the MHE
is
also.
The advanced age of this fleet directly contributes to the
high
cost
of
maintenance
repair
and
parts,
increased
handling
equipment
downtime and low utilization.
the
Second,
current
material
SPCC
utilization goals are attainable.
realized
central
if
established,
control
they cannot be
However,
and
pooling
not
is
well-
if allowances are allowed to be excessive,
if economically obsolete equipment
and
is not disposed of in a
timely fashion.
Third,
the
Department
of
Defense
MHE
replacement
methodology is inappropriate for determining the proper time
to
replace
equipment
because,
criteria are complied with,
a
although
it
appears
the
significant percentage of the
forklift fleet is still over-aged and economically obsolete.
Fourth,
fications
the usage of the complicated performance specifor
the
procurement
of
MHE
differently designed pieces of equipment.
results
in
many
This causes non-
standardization of the Navy's MHE inventory which leads to
problems of repair and spare parts support.
67
C.
RECOMMENDATIONS
In light of the conclusions reached above,
dations
following
the
in
paragraphs
the recommen-
made
are
to
further
reinforce the results of this study.
The DOD replacement criterion is over 30 years old and
is
inadequate
for
determining the most economical time to
It is recommended that
replace material handling equipment.
a
study
conducted
be
develop
to
a
computer program that
could be used to determine the economic life of an equipment
based
on
the
private
replacement
sector
The
concept.
program must be capable of generating useful information for
monthly and cumulative costs per
decision making such as:
engine
the
hour;
projected
replacement equipment;
hour
engine
per
cost
of
a
the annual savings if the equipment
were replaced at that time;
and
finally,
percent return on
investment.
In order to lower MHE expenditures,
it is proposed that
standardization of the more common types of forklift trucks
be
effected.
This could be
implemented by procurement of
off-the-shelf equipment.
commercial,
The Navy could
take
advantage of lower costs accruing from high volume production.
turers,
boost
By significantly reducing the number of MHE manufac-
cost-efficiency
because
Additionally,
efficiency
service
and
and
downtime
would
improve
productivity
supply
would
decrease
because
68
support
the
would
receive
would
and
mechanic
a
increase.
maintenance
previously
forced to work on all makes can now become master of a few.
Before
taking
this
initiative,
however,
a
thorough
cost/benefit analysis must be conducted to ensure adequate
industry support.
A review of the current overall MHE maintenance concept
and
plan
should
efficient
be
conducted to determine the most
effective method
and
Supply Centers.
repairing
of
This should include
MHE
costNaval
at
study of Public Works
a
Center operations, contracting repairs out commercially, and
the organizational level of maintenance.
The format of the Annual Report presently in use is ade-
quate
for
deteiTtiine
documenting the
an
activity's
equipments to replace.
massive manual
activities,
in
the
information required by SPCC to
utilization
and
which
specific
However, the time lag caused by the
input of data at SPCC,
late submissions from
and the general frequency of the report results
Verification
slightly outdated.
and
Allowance
Report
Listing
to
be
It is recommended that the frequency of
the report be changed to quarterly in order to obtain more
current information to make sound decisions.
large
volume
of
feedback
reports
Because of the
received,
however,
the
success of implementing this change depends on the automation of the feedback report itself.
In addition to the manual input mentioned above,
records
are manually maintained at the majority of activities.
is proposed that simplification of data collection,
tion and reporting be accomplished
69
through
It
calcula-
computerization.
would
This
these
reduce
resources
to
labor
required
be
resources
utilized more
and
redirect
efficiently
in
other
forklifts
at
Naval
tasks
This
Supply
report
Centers.
extended
to
that
has
only
forklifts
The
study
of
on
board
ships.
shipboard operations,
ment,
considered
The
should
high
next
be
tempo
of
the exposure to a corrosive environ-
and the rapid turnover of both qualified operators and
mechanics create difficulties such as increased downtime and
non-accomplishment of scheduled preventive maintenance.
70
APPENDIX A
EQUIPMENT COST CODES AND DESCRIPTIONS FOR MHE
Equip.
Hquip.
Cmt
Gmup
Cost Acct.
Description
foUa
C<Hi«
Maint.
Oper.
64 RO
6JR0
pa
64 RO
licctnc
64R0
64 RO
64R0
64 RO
65 RO
r,5R0
--
Tractor, wvehouaa, up to and including 4,000 pounds 'DBP, pneunutic
IIQQ
IlIO
mo
1200
1210
1220
1230
1240
1300
1305
1310
1320
1325
1330
1340
1350
1360
1370
1375
1380
1390
1395
1400
1410
1420
1430
1440
1500
1600
1610
18(X)
1310
1320
1830
1340
1850
1360
1870
1880
1900
R
R
R
Tractor, warehouas,
R
R
C-ane, truck, warehouse and industnai, solid
tire,
Crane, tnick, warehouse and industnai, solid
tire, electric
R
R
Cnne.
Cnne,
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
Truck,
Truck,
Truck,
Truck,
R
R
R
R
R
R
R
R
R
R
R
R
R
R
Z
ov«r
4,000 pounds DBP, pneumatic
Tractor, warcJiouse, 2,000 to 4,C00 pounds D13P, asiid
C-ane,
Truck,
Truck,
trucic,
warehouse ind industnai, pneumatic
truck, magazine, solid
gas-cicctric,
forkiifl,
forkiifl,
ail
tire, ciectric,
im.
forkiifl, all capacities, «jJid tire,
up
to
ail
tire, gas
tires,
LPG
tire, gai
gas
LPG
and including 6,000 pounds, pneumauc dre, diesd
forkiifl, all capacities,
wiid
pneumauc
tire, diessi
tire, diesei
capacities, solid tire, eiectnc
forkiifl, all capaatics, iolid tire, tiectnc,
spark enclosed
penumatic tires, iiectnc, spark enclosed
all capaaties. solid tire, dectnc, sxpiosion proof
tienng, straddle, and reach-type, jjectric
ail capaaties, stnckpickmg, eiectnc
forkiift, oil capaatics,
forkiift,
forkiifl,
Trtick, forkiifl,
Truck,
Truck,
Truck,
Truck,
Truck,
:park enclosed
pounds, pneumauc
forkiift, ail capaatics, iaiid
forkiifl,
gu
gas
up to and including 6,000 pounds, pneumatic
up to and including 6 jDOO pounds, pcnumadc
Trtick, forkiifl, ov«r 6,000 pounds,
Truck,
Truck,
Truck,
Truck,
Truck,
Truck,
tire,
tire,
cpaatics.SRT
forkiift, over 6 jDOO
forkiift,
tire,
tire.
fixed piatfomi, pneumatic tire, gas
nxed platform, pneumatic
tire,
iiectnc
lievating platform, solid tire, siectnc
elevating platform, pneumatic tire, gas
fixed platform, pneumatic
:ire, diesei
Truck, straddle <3rTy, up to and including 60,000 pounds, gas or dicsel
Truck-, lift, hand, pailet-type, ill capaaties, siectnc
Truck, lifl, hand, paOei-type, ail capaades, dectnc, spark enclosed
Truck,
Truck,
forkiift,
forkiifl,
rough
rough
terrain, ail capaaties,
pneumatic
tiro,
gas
terrain, all capaaties, crawler, gas
Truck, forkiift, rough terrain, ail capaaties, pneumatic tire, diesei
Truck, forkiifl, rough terrain, ail capaaties, crawler, diesei
Truck, side -loader, up to and including 10,000 pounds, gas
Trucic, side-loader, over lO.COO pounds, gas
Truck, side-loader, up to and including 10,000 pounds, diesei
Truck, side-loader, over
Truck, side-loader,
all
1
0.COO pounds, diesei
capaaties, iiectnc
Miscellaneous materials-handling equipment including
handcarts, and pailet-type handlift trucks
71
trailers,
handtrucks,
64 RO
64 RO
64 RO
64 RO
65 RO
65 RO
65 RO
65 RO
65
65
RO
RO
65 RO
65 RO
64R0
64R0
64 RO
64 RO
64 RO
64R0
64R0
64 RO
64 RO
64R0
64 RO
64R0
64R0
64R0
64R0
64R0
64R0
64R0
64 RO
64 RO
64R0
64R0
64R0
64R0
64R0
64 RO
64 RO
64R0
64 RO
RO
RO
RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 PO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
65 RO
6440
6540
65
65
65
APPENDIX B
REPAIR LIMITS
LIFE EXPECTANCIES FOR MHS
&
o
a
«
sO
tn
—
3
.-«.
^3
"3
a.
4>
a
U
H
a
<U
CJ
O
^
in
in
^
in
"•
O ^
O
rM
in
«N
in
cs
in
CM
O o
m O
en
O
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G«n«r«l Scrvicn Admmittntion iFPMfl 101
77
^S-')
APPENDIX G (CONTINUED)
BACK
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78
Cat*o*t*m a^
4
ISmmifyl
APPENDIX H
19 8 6 STANDARD FORKLIFT
EQUIPMENT
20ST CODE
DESCRIPTION
Forklift
Forklift
Fork lift
Fork-lift
Fork lift
Fork lift
Fork lift
Fork lift
Forklift
Fork lift
Forklift
Forklift
Forklift
Forkli ft
Forkli ft
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
Forklift
REPLACEMENT COSTS
Gas
Gas
Gas
LPG,
LPG,
LPG,
Gas
Gas
Gas
LPG,
LPG,
LPG,
,
.Pneumatic
Pneumatic
Pneumatic
Pneumatic
Pneumatic
Pneumatic
Solid
Solid
Solid
Solid
Solid
Solid
Diesel, Pne^jmatic
Diesel, Pneumatic
Diesel, Pneumatic
Diesel, Pneumatic
Diesel, Pneumatic
Diesel, Pneumatic
Diesel, Pneumatic
Diesel, Solid
Diesel, Solid
Diesel, Solid
Electric, Solid
Electric, Solid
Electric, Solid
Electric, Solid
Electric, Pneumatic
Electric, Pneumatic
Electric, Pneumatic
Electric, Pne^Jmatic
Electric, Solid (Eli)**
Electric, Solid, RST **
Electric, Solid, R&T
Electric, Solid, (SP )^
,
,
,
,
,
13QQ
1300
1300
1305
130 5
1305
1320
1320
1320
1325
1325
1325
133a
1330
1330
1340
1340
1340
1340
1350
1350
1350
1370
137a
137a
-1370.
1375
1375
1375
1375
1380
1390
1390
1395
Explosion proof
**Reach-type
# Stockpicking
*
79
CAPACITY
200.0
4000
6000
2000
4000
5000
2000
4000
6000
2000
4000
6000
2000
4000
6000
8000
10,000
15,000
20,000
2000
4000
6000
2000
4000
6000
8000
2000
4000
5000
8000
6000
3000
4000
2500
TECHNICAL
DATA '
UNIT
COSTS
12 7"
$11,500
$12,500
$17,000
Lift
Lift
Lift
Lift
Lift
Lift
Lift
Lift
Lift
12 7" Lift
144" Lift
180" Lift
144"
180"
127"
144"
180"
12 7"
144"
180"
12 7"
Uft
144"
130"
180"
IS 8"
Lift
Lift
Lift
Lift
210" Lift
210" Lift
127" Lift
144" Lift
ISO" Lift
12 7" Lift
144" Lift
180" Lift
180" Uft
12 7" Lift
144" Lift
180" Lift
180" Lift
144 " Lift
130" Lift
130" Lift
-
—
$12 ,000
$13,000
$17,500
$12,000
$12 ,000
$19,000
$12,500
$12,500
$18,000
$14,500
$14,500
$18,000
$34,000
$36,000
$37,000
$56,000
$14,500
$14,500
$18,000
$16 ,500
$20 ,500
$25,000
$32,000
$19,000
$22,000
$27,000
$34,000
$38,500
$22,000
$27,000
$20,000
LIST OF REFERENCES
1.
General Accounting Office Report, Navy Material
30 January
Handling Ecruipment Costs Can Be Reduced
U.S.
,
1980.
2.
Naval Supply Systems Command
Control
and
Administration
Equipment 5 August 1985.
Instruction 10490. 33A,
Material
Handling
of
,
3.
Assistant
Tony Detoma,
Personal interview with Mr.
Navy Ships Parts Control
Center,
Program Manager,
Mechanicsburg, Pennsylvania, 29 May 1986.
4.
Personal interview with Mr. George Fruhworth, Code 0302,
Navy Ships Parts Control Center, Mechanicsburg, Pennsylvania, 25 August 1986.
5.
Navy Ships Parts Control Center Instruction 10490.2,
Control
Materials
Handling
Administration
and
of
Equipment (MHE) for Naval Shore Establishments and LandBased Operating Forces 2 6 August 1981.
,
6.
Telephone interview with Mr. Norm Hobson, Supervisor
Inventory Manager, Defense Construction Supply Center,
Columbus, Ohio, 27 October 1986.
7.
Naval Supply Systems Command Publication 553,
Management 1981.
Inventory
,
8.
Personal interview with Mr. Jim Holtzinger, Program
Manager, Navy Ships Parts Control Center, Mechanicsburg,
Pennsylvania, 6 June 1986.
9.
Navy Ships Parts Control Center, "MHE (Material Handling
Equipment) Maintenance Program," Point Paper, 15 January
1982.
10.
Naval
Supply Systems
Command Publication
Maintenance Manual October 1981.
538,
MHE
Engineering
and
.
11.
12.
Blanchard,
Management
Benjamin
.
S.,
Logistics
2nd ed., Prentice-Hall,
1981.
Department of Defense Instruction 4145.19
and Materials Handling 15 September 1979.
.
80
R-1,
Storage
13.
Air University, The Air Force Institute of Technology,
School of Systems and Logistics, Government Contract
Law,
14.
1985.
Military Specification, MIL-T-21868B, General Specification for Shipboard, Diesel, Fork Lift Trucks, 5 May
1984.
15.
Department
of
Defense Instruction 7220.21,
Uniform
Criteria for Repair Cost Estimates Used in Determination
of Economical Repair 29 June 1978.
,
16.
Chester, Frank. B.
"The Economic
Trucks," Wire Journal Vol. 11, No.
,
.
17.
Life of Fork
April 1978.
Lift
4,
Andrew, Arthur A., "When to Replace Your Lift Trucks
and How to Make the Program Pay Off," Material Handling
Engineering July 1980.
.
18.
Naval Supply Systems Command, "Other Procurement Navy,
Supply Support Equipment, Back-up Data for the Fiscal
Year 1988/1989 NAVCOMPT Budget Submission," September
1986.
19.
Defense Audit Service Report, Report on the Review of
Management of Forklift Trucks Within DOD No. 80-142, 29
September 1980.
,
INITIAL DISTRIBUTION LIST
No.
Copies
1.
Defense Technical Information Center
Cameron Station
Alexandria, Virginia 22304-6145
2
2.
Defense Logistics Studies Information
Exchange
U.S. Army Logistics Management Center
Fort Lee, Virginia 23801
1
3.
Library, Code 014 2
Naval Postgraduate School
Monterey, California 93943-5002
2
4.
Professor A.W. McMasters, Code 54Mg
Department of Administrative Sciences
Naval Postgraduate School
Monterey, California 93943-5000
5
5.
Professor P.M. Carrick, Code 54Ca
Department of Administrative Sciences
Naval Postgraduate School
Monterey, California 93943-5000
1
6.
Rear Admiral E.K. Walker
Commander
Naval Supply Systems Command
Washington, D.C.
20376-5000
1
7.
Mr. Tony Detoma
2
Navy Ships Parts Control Center
Attn:
Code 03023
5450 Carlisle Pike
P.O. Box 2020
Mechanicsburg, Pennsylvania 17055-0788
8.
Mr. John Sparks
1
Naval Supply Center
Attn:
Code 4 61
937 North Harbor Drive
San Diego, California 92132-5044
82
9.
Mr. Andy Certo,
10.
LCDR Robert J. Bump
110 Rancindin Road
Butler, Pennsylvania
Director
Defense Standardization Program Office
Two Skyline Place, Suite 1403
5203 Leesburg Pike
Falls Church, Virginia 22041-3466
16001
83
I
7 6 G 3/7
DUDLPV KIHOX UBBARY
AVAL Pudri./b.....i;L./-;fE SCHOOL
MOUTBREY, CALIPOaiflA 93943-BOOS
IS
/
22G959
Thesis
B8471
c.
1
^
Bump
Improving the quality
of the Navy's material
handling equipment (MHE)
fleet with special emphasis on forklifts at Naval
Supply Centers.