Phil Van Wormer. Sponsored by: Presented by: Executive Vice President & Chief Commercial Officer

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1 Applying the Latest Fleet Monitoring Innovations to Cure Costly Productivity Killers That Effect Fleet Utilization, Labor Productivity & the Safety of Operations Presented by: Sponsored by: Phil Van Wormer Executive Vice President & Chief Commercial Officer 2014 MHI Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 The Warehouse Industry s Challenge 1. Forklift trucks and drivers account for over 80% of operating expenses. 2. Lack of real time visibility to fleet movement, utilization and driver activity limits productivity improvement. 3. Substantial forklift truck accidents result in costly injuries, lost work time and damages. 4. Manual tasks associated with data collection and inventory tracking reduce driver productivity while increasing human error and rework. A $10k forklift truck can cost over $145,000 per year to operate Forklift related accidents cost employers in excess of $100M annually

3 Fork Truck Economics 101 Driver labor accounts for over 75% of costs Total Cost of Ownership (TCO) surveys consistently show operator/driver costs dwarf all other expenses 1-4 drivers per truck $45K avg. loaded cost 1% Energy 3% Insurance 3% Parts 1st Qtr 5% Maint. Labor 2nd Qtr 11% Trucks 3rd Qtr 77% Operator 4th Qtr Slice 5 Slice 6 Small gains in labor productivity beat large improvements in other cost areas

4 Business Value Warehouse Productivity Solutions Vehicle Task Automation Automated Warehouse Management Vehicle Tracking Driver Activity Tracking Automated Data Collection Driverless tasks Can still be driven Automated navigation Real time computer routings Mixed fleet management Optimized labor and asset s Interleaving Advanced slotting Fleet Utilization Fleet Maintenance Automated inventory tracking WMS integration Work-based LMS Operator Safety Traffic Safety Driver Alerts Pedestrian Alerts Driver accountability Utilization by task Fleet Management Vehicle utilization Labor Management Maintenance monitoring OSHA check list Shock sensing New Technology

5 Monitoring=Visibility=Accountability Standard Impact Reduction Reports

6 Leveraging Data for Productivity Event Alarms Enhanced Manual Driver Interfaces Improvements Automated Data Collection Automated & Actionable Business Intelligence Turning Events and Data into Actionable Business Intelligence and Automation is the next big opportunity for warehouse operations

7 Smart Truck Monitoring Innovations Proximity alert sensors Load detection Task tracking Multi-lingual capability Vehicle usage and functions Multi-axis impact sensing Zone and precision location sensing Automated inventory and vehicle tracking Distance traveled Speed sensing

8 ROI Benefits Safety Reduced cost of impact-related damage Reduced lost work time from accidents Improved OSHA compliance at reduced administration cost Fleet Management Usage, utilization and tracking data deliver insights for fleet size/type optimization Improved uptime with lower maintenance cost Reduced fuel and battery costs Reduced total cost of ownership Labor Management Improved accountability with less unproductive time Eliminating data collection and errors = more drive time and pallet moves per hour Decreased drive distance and drive times Reduced variability between drivers and increased average shift performance Regular labor standards updates without new costly time and motion studies Centralized traffic control for mixed fleets Automated Inventory Tracking Eliminates driver scanning, data collection and errors Improved inventory accuracy reduces search time, reconciliation, cycle counts Reduces mistakes, miss-shipments, obsolete inventory, buffer stock, etc. Reduced outbound QA inspection costs Valuable insights for rezoning/reslotting Real time, accurate vehicle and pallet location data supports true interleaving

9 Integrating MHE + OTR Data The integrated system knows who used each pallet jack for unloading and when, plus travel, impacts, etc. OTR system has driver stops, times, delays New metrics include: Time from arrival to pallet jack use, last use to departure Pallet jack travel and idle times Can compare drivers by site, time, etc. Recover up to 45 min. per driver per shift

10 Integrating MHE + WMS + Clock Data Actual vehicle data completes the picture of employee activity, including: Travel time & distance: Load on forks; Load not on forks Comparison of labor standards with actuals Drive employee productivity increase of 10-20% or more!

11 Integrating MHE + Your Data Solution automatically delivers driver data: Travel time & distance, with and without a load Utilization and Impact data, by driver and vehicle Time Logged in, on Deadman, in Motion, Idle Easily imported and merged with other (non-mhe) data sources to establish new metrics Integrated with WMS, LMS, time-clock, paper logs, maintenance, capital, and other systems Key metrics allow supervisors to coach employees and drive reductions in warehousing costs

12 Yeo Valley Farms The Problem: Scanning pick face locations did not guarantee that pallets were placed in the correct location. One misplaced pallet created inaccurate orders and delayed shipping. The Solution: Optical RTLS for tracking all vehicles and inventory Pick replenishment occurs several times per shift Elimination of replenishment of empty pick faces Pickers find the CORRECT stock in each bay every time Elimination of hand scanning Increased forklift truck and labor productivity 100% inventory accuracy

13 Turning Real Time Data into Action

14 Turning Real Time Monitoring Into Operating Insight

15 ...And Valuable Business Intelligence

16 The Scanned Data Gap 1 st Transaction Activity Not Recorded 2 nd Transaction

17 Vehicle Travel Distance Reduced travel = Increased Productivity = Lower Maintenance Costs

18 Reach Truck Activity Focus on Reducing the Idle Time

19 Results 30%+ Potential Staff Reduction Overall 20% Truck Reduction 33% reduction in Reach Trucks & Drivers

20 US Cold Storage THE CUSTOMER: BACKGROUND Go Live 2012 PURPOSE Improved Productivity and reduction in forklifts THE SOLUTION: IMPROVEMENTS Picking: 15% Putaway: 20% Relocation: 25% Replen: 15% MATERIAL HANDLING 19 forklifts with tracking system SOLUTION Forklift and Inventory Tracking System Integration with existing WMS BENEFITS > $210,000 estimated annual savings Reduction of 3 trucks; Reduction in cycle count and outbound inspection 6hr/day

21 Customer WMS Middle-Ware

22 Driver RF GUI

23 Dashboard

24 Customer WMS The Future Swisslog Dashboard Dynamic Intelligent Interleaving or Task Management 1 2 Swisslog Slotting TTX AVA Recommendations Server THE FUTURE Use TotalTrax data combined with WMS data to make and incorporate logic to provide intelligent and optimized recommendations 3 4 Warehouse Route Guidance Swisslog Driver GUI LMS interfacing Vehicle TTX Vehicle Service

25 A New KPI: The Perfect Move Done correctly, the first time, at minimum cost Right load picked Closest driver with right equipment (AGV or manned) Correct destination location and load orientation With no damage Optimal routing At optimum safe speed Minimum total time Fully tracked and updated in management software Truck load manifest verification

26 For More Information: Phil Van Wormer : Website: Al Marder: website: Booth # 7017 Charlie Brackley: website: Booth # 5431 Randy Jennings: website: Booth # 7613 Or Booth 5431

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