Parts inventories can be intimidating to manage, and if not done well, can be costly. On average, parts are 50 percent of what labor cost is for the typical trucking fleet.
Shop and technician productivity is gained in more efficient parts retrieval. Think about technician burdened labor – fixed expenses like federal and state taxes, health insurance, workman’s compensation, uniforms and paid time off – in terms of dollar per minute. The costs add up quickly when a technician is spending time trying to locate a part in a disorganized parts room.
My next few guest blog posts for Double Coin Tires will provide advice to trucking fleets on parts management -- excerpts from an article I wrote recently for Fleet Maintenance Magazine. In this post, I would like to share six simple inventory control tips:
What to have in inventory. Everything you need at a minimum level, along with those parts that a truck dealer doesn’t stock. This will help technicians stay busy and prevent the delay of a vehicle repair/service because a $5 part couldn’t be obtained after hours. Only those special items that are specific to your operation and deemed operationally required should be considered for stock.
What not to have in inventory. “Emotional parts,” rebuilt transmissions, engines, rear ends and an abundance of used parts.
Returns. Parts need to be returned on a timely and frequent basis. Do usage stock reports monthly. Six months of no usage, get rid of the parts. Return unused stock for credit. Any parts older than three months with no usage should be evaluated.
Minimums and maximums. These should be figured every day or so on the fast moving items. The more accurate you keep this information, the easier it is to order parts with intelligence.
What to do with old inventory. This is always a challenge. Selling old parts is difficult and usually the return may not be worth the investment in time. Ask your vendors if they will take back old inventory. As an incentive, offer to replace equal to the returns if they will buy back old inventory.
“Stock lift.” When, or if, you choose to change suppliers or update to new in- ventory, certain manufacturers/vendors may provide a “stock lift” and replace the old inventory with new or give a credit.
Let me know if you have any questions or comments about these tips and be looking for my next Double Coin Tires post detailing additional parts management advice.
Darry Stuart is a guest blogger for Double Coin Tires. He founded DWS Fleet Management Services in 1999 and has helped many fleets, both large and small, improve their bottom line. He advises his clients on tires (here's what he thinks about Double Coin), but devotes most of his efforts to personnel and organizational issues.