If you maintain equipment, you've got spare parts on the shelf. And if you have parts on the shelf, a computerized maintenance and inventory management system is one of the best investments you can make.
      "We've found that parts inventory management is one area where we can get almost immediate return or close to it if done properly," says Charles Arsenault, CEO of Arsenault Associates, a fleet maintenance consulting firm and maintenance software developer.
      For large fleets the payback can come as quickly as six months. It may take a little longer for small fleets to see enough savings to justify the investment, but they're definitely there.
      "From an asset management point of view, a fleet with 25 trucks has many of the same issues as UPS," Arsenault notes.
      Computerized management systems are intended to get you organized and keep you organized, but it takes some work and fine-tuning up front. "It's a little bit like raising a puppy," says Rick Rosenberg, president of TMT Software. "You put a good 12 months into working with that puppy and you end up with a really great dog."
      One way to get that great dog is to set up the system using Vehicle Maintenance Reporting Standards. VMRS is a parts identification system developed by the Technology and Maintenance Council of the American Trucking Associations. It's basically a standardized parts numbering system that enables fleet managers to monitor parts cost, usage and performance by type of part instead of brand. All alternators, for instance, will have the same VMRS code, no matter where they were purchased or who made them. Most systems also cross-reference VMRS with vendor part numbers for easy ordering and to allow performance comparisons of various brands.
      Rosenberg also recommends bar coding as part of the initial set-up. "When you have to enter a 17-digit part number on a repair order by hand, you're just begging for transposition errors," he explains. Systems such as TMW's Transman will automatically print a bar code label as parts are logged into inventory. Using inexpensive readers, bar codes can be scanned as items are removed from the shelves. Bar coding also enables easy and error-free assignment of specific parts to specific work orders and vehicles. It's still wise to do a manual inventory at least once a year, but bar coding simplifies the process. "You can do it in hours instead of days," he says.
      If a fleet has more than one shop, a good inventory system can link all locations. If parts are purchased centrally, the fleet manager or parts buyer can easily monitor inventory, parts usage and pricing throughout the system. And if one shop has a need for a high-cost, seldom-used part, they can check inventory at other locations before ordering a new part.

JIT for Parts
      Logistics planning and just-in-time deliveries are usually associated with manufacturing and retail operations, but the basics – and benefits – can apply to fleet parts inventories. "Everybody would rather have money in the bank than money on the shelf," Rosenberg says. "You want the right parts and the right amount of parts so you can run your business as efficiently and effectively as possible."
      Managers make the decisions but computers do the math. The most widely used method for determining when to reorder is to establish minimum and maximum inventory levels for each part. Based on usage and the time it takes to get replacements, users can then specify a "trigger point" or inventory level that will signal the system to reorder.
      For instance, the parts manager may decide he needs a minimum of six alternators on the shelf, but no more than 12. Delivery from the primary vendor normally takes a day, so the system is set up to order four alternators when the number in inventory drops to eight.
      As Rosenberg emphasizes, the process is not static. Through a variety of readily available reports, fleet managers can periodically review parts usage, out-of-stock incidents and vendor delivery performance to make adjustments in min/max levels and reorder points.
      Some systems use more sophisticated math to make those adjustments automatically. Diamond Connection Solutions, a maintenance and parts inventory management system offered through International truck dealers, lets users choose between min/max inventory levels or a formula method that calculates optimum inventory levels according to usage over a specified period of time (the previous 90 days, for instance).
      "A drawback with the min/max method is that you can end up with parts on the shelf you don't use," says Mike Frasure, national marketing manager for DCS. "If a part number changes or if you get rid of a vehicle and forget to pull those parts, the formula method will catch it pretty fast."
      Parts obsolescence is a bigger issue than you may think. During the initial set-up it's not uncommon to uncover a big stash of items the fleet no longer uses. "We find parts for trucks the company hasn't owned in years but nobody thought to take them off the shelf," Frasure says.

Warranty Recovery
      Another tedious task that's often overlooked is warranty recovery. Rosenberg says most fleets are pretty good at keeping track of new truck warranties and extended warranties on major components, but warranties on replacement parts are often lost in the shuffle. A good inventory system captures and stores that information when the part is purchased and will alert the user when a failed part may be covered. Many systems will even print warranty tags or stickers with all the necessary claims information.
      Inventory management systems are almost always part of maintenance management systems, which simplifies inventory tracking even more. When a work order is generated, the system should automatically check parts availability and alert the user when an item isn't in stock. It should also adjust the inventory database so users have real-time information regarding the number of parts actually available for use.
      Arsenault's Dossier Maintenance Software has templates for common maintenance tasks. Users also can save any repair order as a template, reducing the amount of manual entry required for repetitive maintenance or frequent repairs.
      Most of the major fleet management systems can now be set up to interface with on-board computers and telematic systems, allowing trucks to report mileage or other meter readings and even fault codes. Today, those systems generate a pending work order that must be reviewed by the shop manager or a technician to determine potential causes and solutions.
      Some day, Arsenault predicts, that human step won't be necessary. On-board computers will diagnose the problem and send the diagnosis to the maintenance system. The maintenance system will generate a work order and check parts availability. When the truck arrives at the shop the technician will be ready with everything needed to get it back on the road as quickly as possible.

Fleet/Vendor Links
      Even parts ordering can now be done with minimal human effort. With a few keystrokes, a parts manager can pull up a list of parts that need to be reordered, or he can program the software to automatically produce a requisition list at specified intervals – say the end of each day. Parts managers who are comfortable with their stocking parameters can even set up the system to automatically issue purchase orders to designated vendors when inventory levels reach specified triggers.
      Electronic communication between fleets and vendors is becoming more common with adoption of standard formats such as ASCII and HTML, or with popular programs such as Microsoft's Excel. The latest trend seems to be toward links that are even more seamless.
      Systems that accommodate multiple locations can be set up to include selected vendors. "If you have a long and trusted relationship with a vendor, we can provide access from their computer," Arsenault says. "The only thing they would see is inventory utilization and histories, and they can call up a parts reorder. It helps the vendor plan inventory and builds rapport between fleets and their vendors."
      International's DCS establishes a direct link between customers and dealers. On a customer-specified schedule, usually every night, the system downloads a parts usage report to the dealer. A pick ticket is generated and parts are usually delivered the next day. Customers have the option to review orders before they're placed, or they can choose to have inventory replenished automatically.
      Frasure candidly admits that the main objective of DCS is to help International dealers sell more parts, but the way to do that is through mutually beneficial working relationships, not just shared software, he says. "There's a huge amount of savings possible with systems like this. Customers can have the parts they need when they need them. The dealer can do a better job of predicting what parts he needs to stock because he has good information on the customer's needs."
      The most frequent objection to programs like DCS is that they give too much control to vendors. Not so, Frasure says. Customers and dealers work closely to establish optimal inventory levels, and a variety of reports makes it easy for fleet managers to review what parts are being ordered, how many, how often, and the prices paid. They can override DCS-generated orders and change stocking parameters at any time.
      "The key is that the dealer makes regular deliveries to the fleet customer, so there's really no need for the fleet to carry extra inventory," he explains. "If a fleet is getting daily deliveries they can maintain an absolute minimum of inventory. The fleet can let the dealer cover the carrying costs."
      Paccar Parts offers three levels of maintenance and inventory management services through its Connect programs (TruckCare Connect for Peterbilt, PremierCare Connect for Kenworth). Web Connect is an Internet-based entry-level program designed for fleets of 20 or more trucks. No special hardware or local software is required. Users simply need a high-speed Internet connection. Connect Professional and Connect Enterprise add progressively more capabilities for larger fleets that need more sophisticated shop and inventory management functions.
      "Generally, customers who are getting into a system for the first time will start with Web Connect or Web Professional," explains John Wisdom, director of customer systems. "Larger shops or shops that have had a maintenance management system for a while and want to do more might lean towards Enterprise."
      The Connect systems have a long list of features and benefits, but Wisdom says one feature that sets the program apart is the link with Paccar's state-of-the art information and supply chain technologies. "We're providing a level of service and IT support that most fleets can only dream of," he says.
      Paccar technology incorporates multi-layer security to protect unauthorized access to customer files, but fleet parts and service information stored at the company's data center is continuously aggregated and analyzed to help improve inventory planning at dealerships and parts distribution centers.
      "Availability is everything to most fleets," Wisdom says. "Price is important, but availability is No. 1 because they're all looking to keep their equipment running and on the road. The bottom line is that we're all looking to make sure we have the right part, in the right place, at the right time."
      Nevertheless, buying at the best possible price is key to effective parts management. Again, computerized systems can help. Easy access to numerous reports allows fleet managers to keep an eye on shop, vehicle, part, parts room and vendor performance. At any given time they can quickly find out what they're buying, how many, who they're buying from and what they're paying.
      "What happens is that you become very knowledgeable about your parts usage," Arsenault says. "You can speak logically and with authority to your vendors. The information makes you a better manager and a better negotiator."

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