Keep Those Cards and Letters Coming In!
I like to think that we do a pretty good job staying on top of the crucial issues in the fleet maintenance industry, but sometimes we need to have things pointed out to us…
Case in point: I got an interesting letter last week from a fleet superintendent for a medium-sized city fleet in the Midwest, asking why we don’t do any stories on parts. In fact, we haven’t done a feature story on parts since 2005, so it’s a fair question.
This gentleman was charged with reducing a $100,000 deficit in the operation of his city’s maintenance garage. “One of the first things that jumped out at me,” he wrote, “was that the parts room was open to anyone and there was no accountability for its inventory. After addressing some of the most obvious issues and installing a good fleet program on the computer, we have succeeded in controlling the parts room inventory and better managing the parts budget.”
That, along with some other operational changes, has resulted in the gentleman’s garage operating in the black for the past two years. But, he says, “After observing other fleet operations, it seems that quite a few of them are losing money through their parts rooms. I’m sure there are many fleets that could benefit from some good, sound advice from you. We could stand to learn more ourselves.”
That’s what I liked about this letter: this man is saving his city hundreds of thousands of dollars a year, and he feels there are still things he can learn! In that spirit, I’d like to open up my blog with the same attitude: I could stand to learn more myself, and I’d like to learn from you, our readers.
What about you? Let’s start by talking about parts: can your parts department benefit from some good, sound advice? Do you have advice for others who are wrestling with dysfunctional parts rooms? Let’s hear from you…
December 14th, 2007 at 8:10 pm
Sometimes its the timing that makes one look good. For instance, I go out annually for bids on commodity items such as batteries, filters, and lubricants. I recently had a conversation with the vendor that is currently supplying us with batteries and after just four months into this years contract he is losing 40% per battery to us because of the shortage of lead in the U.S. Normally we would not stand to save that much with our annual contracts but, like I said, it’s all about timing. The timing was perfect this year.
December 20th, 2007 at 9:32 am
I like that you added this blog. Were always looking for ways to save some money around the shop, and inventory issues are always a big concern. Eager to hear some suggestions.
January 4th, 2008 at 9:19 am
The fleet I joined about 3 years ago had a very disorganized parts room. In some cases they had stocked more of some parts than a vendor would. First was to set up shelving that was user friendly and to utilize the space I had. I then organized the parts in VMRS code order and used bin numbers. This made since as we track our maintenance by VMRS code and it made it eassier for the mechanics to find parts. Once this was done a physical inventory was performed with a huge negative variance of 32% that equalled about $35,000.00. Once we took the hit we started into cycle inventories weekly doing one bin per week. Our next physical inventory was a 5% variance and the last one was 2.7%. I was also able to reduce the inventory value from $85,000.00 to $65,000.00. The organization and cycle counts work.
January 21st, 2008 at 2:44 pm
It is pretty obvious that most fleets tend to stock pile items that are for specific maintenance. When a vehicle is sold or traded we forget about the inventory until it becomes obsolete. I took over a Ford Dealership only to find I had One Million dollars is obsolete inventory. Computers are great! I listed all of my inventory in magazines and web sites. My garage sold everything. Wish I had more to sell. Swap meets are great also. We sold an eighteen wheeler each weekend.
January 22nd, 2008 at 11:09 am
I think that the principle of FIFO (first in, first out)is critical to not having waste in regards to parts. If you have an organized computer system, and stick to the principle, then the chances of parts becoming obsolete before they’re used are lessened.