Technology helps minimize parts inventory and free up capital.
In June 2002, Anderson Erickson Dairies began using a new software system to manage the parts inventory of its 212-truck fleet. Four years later, the dividends poured in when Jerry Bender looked at the data and decided the time was right to reduce inventory.
“We ran our first obsolete parts report last summer,” says Bender, fleet manager of the Des Moines, Iowa-based company. “We found that we had $60,000 in inventory sitting on our shelves that hadn’t been used.” The company returned its unused parts for those the system indicated were utilized. The company has since kept inventory levels $50,000 below its previous mark.
Compared to vehicle downtime and unapplied labor – sending a skilled technician to buy parts – the cost of inventory may seem minimal. But in a low-margin business, that inventory represents precious capital that’s not earning a return. More importantly, if the inventory becomes outdated, it loses its value entirely.
No fleet would choose to do this, of course, but it happens because parts inventory also can be complex to manage, with part pricing, part numbers, usage and many other constantly changing details. However, with the right technology, fleets like Anderson Erickson Dairies can use inventory as a strategic tool to maximize vehicle uptime at the lowest possible cost.
Getting started
Most fleet maintenance management systems incorporate parts management as a feature, capturing details of each part – where it came from, where it is now, how many are left, and its value. The more accurate the data, the greater level of visibility and control fleets gain over their inventory. Yet realizing the full benefit of computerized inventory systems can take months – perhaps even years – of gathering information on what parts are used, and how frequently.
Considering the payoffs, vendors and customers agree it’s worth the effort. Recapturing the value of outdated parts in inventory often will pay for an entire fleet maintenance management system within six to eight months, says Charles Arsenault, president of Arsenault and Associates, provider of the Dossier software
system.
