Jan 13, 2011
Does your fleet keep a large inventory of parts on hand to hedge against the stress of sudden repair needs? Your pragmatism could be hurting your fleet’s bottom line. Take a look at what Light and Medium Truck had to say about this issue in a recent article:
Fleets trying to trim costs during a slow economy may want to take a closer look at the unused and obsolete parts sitting on the shelves in their parts departments. A fleet’s parts inventory can represent thousands (if not hundreds of thousands) of dollars, and all to often fleets buy too many parts and keep them too long, industry executives said.
“[Fleets] buy a lot to get a better price, but the cash that is tied up could be used elsewhere,” said Jett Kuntz, national sales director with Genuine Parts Co. Genuine is the parent of Integrated Business Solutions, the business arm that manages fleet parts programs of the National Automotive Parts Association.
Fleets also may hold on to parts that are either too old or for vehicles that are no longer in the fleet. Kuntz said fleets usually estimate that about 10% of the parts on their shelves are obsolete, but “in reality, we see it as high as 20% to 30%.”
“Take a part that costs $100,” said Jim Salas, president of JLS Transportation Services, Davie Fla. “If they have 100 $1 bills stacked up instead of that part, I guarantee you they would pay attention to it.”
“If a part has been on shelf for a year, send it back to the dealer,” he said.
Identifying old and unused inventory is not difficult. There are numerous services and programs that can help fleets get their parts process and costs under control. Every maintenance management program available, for example, has some type of parts control module with features ranging from a simple data entry of parts to high-end editions with detailed parts histories, automatic ordering from the dealer, even the ability to include photos, schematics or images.
“Ideally, if you could stock nothing, that would be perfect scenario,” he said, “but [fleets] have become very aware of carrying costs. They’re much more aware of shrinkage and issues they’ve faced and are only inventorying things that are fast moving. We see that going across the fleets in general. It’s becoming more normal because of the costs involved.”
To see the full article, click here.