When improving your trucking operation, your first priority might be to make changes to your maintenance program. Improving work order completion times and getting your trucks back on the road is key to making your operation more successful, but it’s not the only thing that can help increase your productivity and improve your financials. Your parts management program can have a large impact on your overall success as well.
One of the first things you can do to revamp your parts management program is look at how much you are spending on parts. Check your current contracts with your parts vendors. When is the last time you renegotiated prices? Or when did you last shop around for a better deal?
When Jeff Jenkins took over as CEO of a trucking operation, he discovered that none of the company’s vendor contracts had been renegotiated for 20 years. It’s understandable how this happens – we fall into a comfort zone with vendors where it’s easy – and takes less time – to just stick with the current vendor (even if you know you are overpaying). However, this can be very costly to your trucking operation. One of the contracts that Jeff renegotiated was the company’s tires contract. He opted for a less expensive tire that cost about one-third of the price they were previously paying. Was the cheaper tire the same quality as the more expensive tire? Not really, but the quality difference did not justify the current price they were paying. Jeff figured they could replace the tire three times and still be spending about the same amount of money. He knew it would not be the case with regular wear and tear. That one adjustment on vendor saved the company a little over $1 million annually.
Aside from renegotiating contracts, you can also look at the types of parts you are buying – and what’s sitting on your shelves. Are you spending money on parts your vehicles don’t even use anymore? Do you keep ordering the same parts without first checking inventory? This could result in unused parts just sitting in your parts room collecting dust, not to mention the money you’re wasting on purchasing the parts.
One of the keys to keeping your parts program running efficiently is knowing what’s in stock. This requires you to take inventory regularly. If you are doing this the old-fashioned way with a pen and paper, it can be quite the undertaking. However, there are easier ways to take inventory, like with barcoding tools. Using barcodes and barcode scanners allows your staff to quickly take inventory. This can be a more accurate process, and you can quickly look at the numbers and determine if there is an error. Instead of waiting for your staff to go back and recount the items, they can go back and rescan each item to get the correct amount.
This not only lets you take inventory more often, but it saves you time and money. You will greatly reduce the amount of labor needed to perform the inventory. In fact, implementing an FMIS with barcode capabilities can reduce inventory count time and improve accuracy by up to 80% over manually doing it. That’s a lot of repair time you get back into fixing your equipment.
When your technicians look for items in the parts room, how long does it take to locate them? Every minute they spend digging through shelves to find a part is additional time it takes them to complete the work order – and the longer the vehicle is off the roadways.
Fortunately, there is a solution – organize your parts room. Some tips for doing this include:
For both safety and organizational purposes, parts should not be stored on the floor or in areas where staff members walk. This will help prevent employees from tripping over parts. Putting parts on shelves and bins will also help employees more easily locate parts.
Instead of storing parts on shelves separately, place them in boxes and bins to keep shelves organized. Single parts are more likely to get lost or combined with other types of parts. Keeping items in boxes and bins will help parts be easily grouped and quickly located. Your trucking operation can choose how to organize the bins, if you want to group them by part type, manufacturer, or another convention that works best for your day-to-day needs.
To help employees quickly locate parts, all rows, shelves, and bins should be labeled with an organized structure. A potential structure could use the following: letter for row, numbers for shelving section, shelf number and bin number. For example, A5-3B4 would be in row A, on the fifth shelving section, on the third shelf, in bin 4.
Designate a Special-Order Shelf
To keep special-ordered parts easily identifiable – and to ensure they are not mistakenly used on another job — a shelf should be designated for them. Parts can also be tagged with a twist tag to note the vehicle number and Work Order ticket the part is for.
Parts that are being replaced under warranty should be kept in a separate area. This will help staff know not to use them on other vehicles and will help managers track what’s being covered versus what needs to be ordered new. Like the special-order items, these parts can also be tagged with a twist tag to note the vehicle number and Work Order ticket.
Parts rooms should have an area marked and labeled for return core parts. Staff members can make a note on each part to state when it is to be returned and reference the Credit Purchase Order.
Your trucking operation should determine a naming convention for all parts, so items are labeled consistently. This will help when taking inventory, ordering new parts, and looking for items in the parts room.
After you put all the work into organizing your parts program, you need to make sure it stays efficient. If your shop is large enough, this is a great way to have ownership and accountability added to your parts inventory. This can include a parts manager and parts clerk, and other roles as needed. These individuals can oversee ordering parts, negotiating with vendors, taking inventory, keeping the parts room organized, helping technicians locate parts, and other tasks to keep the program running smoothly.
Another way to add efficiencies to your parts program is by utilizing fleet management software. An FMIS can include modules to take parts inventory and help with the reordering process. You can set it to alert you when parts reach a certain threshold, so you can reorder them and make it easy to guarantee parts are in-stock when technicians need them.
Let RTA help improve your trucking operation’s parts management program. Contact Randy Davis to learn more and schedule a demo.