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Tire Inventory, Are you Counting at the Right Place?

Posted by Darry Stuart on Feb 5, 2020 8:50:23 AM

Everybody wants to get the last rotation out of a tire, the lowest cost per mile, and buy the tire at the cheapest cost, as well as put air in them on a daily basis.

Different fleet managers or accounting departments want inventory taken in various ways and at various times. Some want to take inventory annually, semi annually, quarterly and some every Friday . . . or even crazily on a daily basis.

They may delegate it to the janitor with a clip board to count the tires and rims. tire stackThey lock up the tires with a chain or cable; have you ever threaded a chain or cable thought the tires, try climbing around the tires in a white shirt ? . . . wasted time and efforts.

We take inventory on tires because we want to eliminate perceived theft or tire needs. So securing and daily inventory prevents theft, or politically said, tires unaccounted for. In most cases, the tires that maybe "missing"are probably on one of your pieces of equipment.

Now that we have counted all the tires, do we know, really know, what has gone out for cap, what is being capped, what is being scrapped?  Sure we do a scrap analysis and we know, or should know, what is being rejected. But do we really know and balance like a check book, what has gone out, and what has been returned? 

tire rowSome of the sophisticated companies have forms; some have papers filled out on a detailed sheet describing the tires picked up. Some have bar code labels put on each tire as they are picked up with all the  detail on the work order, DOT number, tread depth, and what tread design desired  etc.

That’s all well and good. Now the tires go to the tire company, hundreds of tires, piles of tires, sea of tires here, sea of tires there. All moved by a tire employee from location to location, to a point of capping.  Then the tires are capped and returned at some point, the next week, or stored at the capper for future call for inventory.

 In a lot of loosely managed fleets -- the place with the chains -- someone is not  available when the tires are picked up or returned. Most do not review the paper work on both ends of the transaction, 10 picked up and 10 returned. Because of the complexity of the tire’s repair prior to capping, not every tire that is picked up is returned on the next delivery.

There is a very easy way to control this . . . a very easy way to stand up to an audit. In a recent situation I was involved with, there was an out of balance issue of 206 tires unaccounted for in a 10 month period. After an internal audit, by the fleet and tire company, it was discovered that  20 casing  credits had not been accounted for and the fleet's accounting department “forgot to pass on the credit invoices." Thirty tires somehow never got to the scrapped analyses during the reviews,  some tires were in the process of being capped and some where in inventory for future delivery. The real story is that there were 76 tires missing!

In summary, the tire company was happy to participate in the fleet’s audit, or INVENTORY balancing; there were opportunities on all sides to improve -- the choice for the fleet was a credit for 76 casings or supplying replacement grade “A” casings.

So internal inventory makes accounting happy, but maybe they have not figured out where the real vulnerability is -- count where count matters, and audit your program before someone else does.

BOTTOM LINE -- Control what is leaving the shop and what returns!Darry Stuart

Darry Stuart is a fleet management expert and guest blogger for Double Coin Tires. For more information, visit www.darrystuart.com or email comments or questions to: dws@darrystuart.com

 

 

 

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Topics: Fleet management

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