Flat Tire Cost Savings Analysis
We hope this Cost Saving Analysis will shed some light on the flat tire cost issues and help you do your own analysis of tire repair costs and choosing the best solutions for you organization.
|Flat Tire Cost Issues||ForkLift|
|A. Flat Repair Cost|
This must include road service charges, demounting, puncture repair, remounting, and any other charges associated with flat repairs.
|B. Downtime Per Flat|
Average in hours.
|C. Number of Workers Idled|
This includes the equipment operator and all other workers idled due to the downed equipment.
|D. Hourly Pay Rate|
Include the cost of fringe benefits.
|E. Production Rate|
In dollars per hour.
|F. Total Flats for Tire Life|
|1. Repair costs for one flat=(A)||$100.50||$185.00||$395.00|
|2. Repair costs for lifetime tire flats=(AxF)||$301.50||$925.00||$1185.00|
|3. Repair costs idle labor for one flat=(BxCxD)||$108.00||$180.00||$720.00|
|5. Cost of lost production for one flat=(BxE)||$350.00||$180.00||$480.00|
|6. Cost of lost production for lifetime tire flats=(BxExF)||$1050.00||$900.00||$10800.00|
|7. TOTAL COST FOR ONE TIRE FLAT=(1+3+5)||$558.50||$545.00||$1475.00|
|8. TOTAL COST FOR FLATS FOR ONE TIRE DURING TIRE LIFE=(2+4+6)||$1675.50||$2725.00||$4425.00|
|9. PROJECTED COST TO FLATPROOF FOR ONE TIRE||$101.25||$1337.50||$1881.25|
|10. Number of tires you can flat proof instead of purchasing a Rhino magnetic sweeper||21||1||1|
|11. Number of tires you can flat proof instead of purchasing an Aardvark magnetic sweeper||96||7||5|
|12. PAYBACK PERIOD FOR AARDVARK SERIES MAGNETIC SWEEPER (in terms of # OF FLATS) = (COST OF AARDVARK $9749.99 divided by total cost for one flat tire above)||17||18||7|
|13. PAYBACK PERIOD FOR RHINO SERIES MAGNETIC SWEEPER (in terms of # OF FLATS) = (COST OF RHINO 84 $2199.99 divided by total cost for one flat tire above)||4||4||2|
Some of this cost data above was sourced from a flat proofing company. The final results of the analysis are highlighted yellow.
As you can see, the flat proofing company was making an argument that flat proofing pays because the #9. Projected cost to flat proof one tire is less than #8. Total cost for flats for one tire during the tire’s lifetime. So it seems that based on this you would be better off flat proofing than just continuing to fix flats.
However, below this in #10 and #11 is an additional analysis comparing buying a magnetic sweeper to flat proofing tires. This indicates that depending on the type of tire, and type of magnetic sweeper (either Rhino or Aardvark), that you can buy a magnetic sweeper instead of flat proofing in some cases just one tire or in other cases you can buy a magnetic sweeper instead of flat proofing 96 tires (in the case of fixing the least expensive tire and buying the most expensive magnetic sweeper). So you could flat proof the tires on not even one vehicle or possibly up to 24 vehicles instead of buying a magnetic sweeper. So in some cases it absolutely makes sense to buy the magnetic sweeper instead of flat proofing, but what about the case where you could flat proof 24 vehicles? Well if you had less than 24 vehicles and they all had tires that were the least expensive ones to fix, and if you could flat proof all those tires and if you knew that no other outside vehicles were able to access the area, then it may make sense.
However, this is rarely the case. In many cases, the tires are not the least expensive ones to fix. And in many cases you can’t flat proof all tires of the vehicles because you need to still drive them off premises such as on public roads and the flat proofing tires may not handle this use at road speeds.
And it’s extremely rare to have a facility that gets no visiting or customer or supplier vehicles, instead there is almost always a revolving door of vehicles coming onto properties that are not just the vehicles that work there, and they will still be getting flat tires if you just flat proof your own vehicle tires. What you really want to do is to eliminate all flat tires, not just flat tires on some vehicles. So let’s look at this another way. What is the payback period for buying a magnetic sweeper? What we’ve done above in rows #12 and #13 is calculate how many flat tires a magnetic sweeper has to prevent in order to pay for itself.
In Row #12 in the table we can see that if the Aardvark tow behind magnetic sweeper prevents somewhere between 7 and 17 flats it pays for itself. Whether it’s 7 or 17 flats depends on how expensive the tire repair is. In Row #13 we can also see that if you buy a Rhino tow behind magnetic sweeper, and if prevents between 2 and 4 flats it pays for itself. And by using a magnetic sweeper you’ll be protecting all vehicle tires, visitors, customers, suppliers, employees, not just the tires of some company vehicles.
We’re not saying that it doesn’t make sense to flat proof some tires, specifically on a vehicle that has very expensive tires to repair, where the vehicle operates all the time in an area of high hazard where flats are likely to occur, and where the tires can be flat proofed on the vehicle because it doesn’t need to leave the facility or use the public roads. But in almost all cases it is going to make sense to use a magnetic sweeper to protect all vehicles and because the payback period is short.
This makes perfect sense when you think about it from another perspective.
Having flat tires is nothing but waste. It doesn’t add any value, we want to eliminate them all. And when trying to eliminate waste, the general approach that is best is to find the root cause(s) and eliminate the waste as close to the source as possible. If we could, we would eliminate the waste of flat tires at the source by preventing the debris from falling off vehicles in the first place so that it never landed on the ground to begin with. Maybe that means better designed equipment in the future, maybe it means teaching people to secure their loads better. But while we work on that so that debris doesn’t get on the ground to begin with, the only thing we can do is pick it up as soon as it hits the ground. That just makes a whole lot more sense than leaving it there to be ran over for eternity and flat proofing every tire.
We hope this analysis has shed some light on the issues and helps you do your own analysis of tire repair costs and helps you choose the best solutions for you organization.