There is little more frustrating than having a truck down and not having the parts on hand to fix it. The breadth and depth of your parts inventory and the way you manage that inventory are critical to having the right parts, when you need them, where you need them.
Parts availability is an important factor in an efficient service value chain, says Javier Ferraez, senior director of product management at Decisiv, a provider of service relationship management solutions.
“Having a well-managed parts inventory is a great way to reduce preventable delays and overall downtime,” he explains.
With parts, it’s all about “the right part, in the right place at the right time,” says Edward Kuo, founder of Kuo Consulting Group, a consulting firm that focuses on the heavy-duty truck parts aftermarket. “If a fleet has a good vendor who gets them parts right away, that eliminates the need for the fleet to have a big inventory,” because they will have the parts they need for maintenance and repair when they need them.
Here are some tips to help you do a better job of managing parts.
1. Use VMRS codes
Vehicle Maintenance Reporting Standards provide complete and consistent details about parts use. Ferraez says VMRS codes help fleets identify which parts to keep in inventory and which should be procured on an as-needed basis.
“When fleets consistently use VMRS codes in their operations, they’re able to look back at component and usage trends,” he says. “That historical perspective helps them improve parts inventory management and the purchasing process.”
According to the American Trucking Associations’ Technology & Maintenance Council, VMRS established a “universal language” for fleets, original equipment manufacturers, industry suppliers, computers, and the people who specify, purchase, operate and maintain equipment.
The most commonly used code, Code 33, is a nine-digit code that describes each part using a numerical system. It starts with three digits that describe the system, followed by three digits that describe the assembly and three that describe the component.
Ferraez explains that the VMRS standard was developed within the industry as the basis of many successful parts inventory control systems. “VMRS, If properly implemented, not only helps with inventory management, but also helps improve preventive maintenance schedules based on recorded failure rates over time,” he adds.
Kuo says VMRS coding is a critical element in a fleet’s parts management strategy because it gives them the ability to track usage, and that more fleets have started using the coding system. “It gives them a better idea of what parts they need to have in their inventory.”
2. Leverage technology
Computer software has long been available to help track parts inventory, with the help of scanners that can read barcodes or QR codes, but today, mobile apps and telematics are changing the game.
For instance, earlier this year TMW Systems introduced the TMW Parts Room app for users of its TMT Fleet Maintenance software. The parts manager or other employees can use an Android or iOS device to perform a complete physical inventory for the parts room, or narrow the list by bin, part number range or part type. Filters are available, such as uncounted parts, or parts that show a quantity variance. Users also can scan the part number for lookup in conjunction with an inventory adjustment.
Telematics systems provide fleets with a wealth of information they can use to enhance inventory management, which in turn will reduce downtime related to vehicle service.
“For example, knowing that a vehicle or group of assets placed in service at the same time will need a parts replacement campaign will allow for more efficient inventory control and cost effective purchasing practices,” Ferraez says. The fleet manager can order the parts in advance of the campaign so they will be available when the trucks are brought in for the service work.
Longer term, trends on system and component service life and failures based on telematics data can be used to determine upcoming parts needs, according to Ferraez.
3. See what service events can tell you about parts needs
Fleet managers likely know down to the penny what they are spending on maintenance and repairs, whether that service is performed in the fleet’s own shop or by an outside service provider. But delving deeper into vehicle repair histories and knowing specifically what maintenance and repair dollars are being spent on allows the fleet to allocate money where it is needed most – and that includes properly sizing parts inventory.
“Event reports will help you determine if you need to boost inventory for certain parts categories, order special equipment, budget for extra technicians, or add to the training budget based on the types of repairs being done,” Ferraez says.
4. Make e-commerce work for you
With the proliferation of online parts sellers, many fleets are at least considering purchasing parts online. Dave Seewack, CEO of online truck parts marketplace FindItParts, urges fleets to make sure they are doing business with a reputable company.
He explains it is no different than what you would do with a local vendor. “Although you can’t pop into an online vendor, if a company has been around for a long time that tells you something about them.”
Another thing a fleet can do to determine if a supplier is reputable is to view its ratings. And call them to see if they answer the phone. “Find out if they are courteous on the phone and if they can answer your questions,” Seewack advises.
Customer service is a very important part of the selection process when it comes to online parts purchasing. According to Seewack, a good online parts provider has a support staff, especially one that can offer technical support.
“If you don’t know exactly what you are looking for, find out if they help you find the right part.” If they can’t, you might want to look elsewhere for an online parts supplier.
In addition, customer service should extend past the order placement process. Fleets should be updated on when the order ships, given help if a part needs to be returned, and provided with information on core return policies. “We believe in having a lot of touchpoints with our customers,” Seewack says. “We want to make sure customers feel confident in their orders, because it is not like they are buying a jacket or shirt that if it shows up in a week it’s not a big deal. These are truck parts. They need them and they need to make sure they will arrive when promised.”
5. Rely on your parts suppliers
Parts vendors can be of assistance in helping ensure a fleet doesn’t get stuck with a lot of inventory it doesn’t need. A good parts supplier can use information on past parts purchases to predict future parts needs and make recommendations on stocking levels. Bar codes can facilitate the parts management process and give parts suppliers better information on which parts are moving and which aren’t.
Kuo explains that good distributors “have people on staff who can create solutions for fleets because they have knowledge across a variety of fleets. They can tell a fleet which combination of parts will give them better results such as longer durability.”
He adds, “Distributors are also well versed in how to come up with the best value in parts as opposed to just the lowest priced part and can help solve problems as opposed to just provide parts as needed.”
The right parts supplier is an important element to good inventory management strategy, and Kuo advises fleets to look for distributors whose counter staff is knowledgeable and experienced. In addition, the distributor ought to be able to tell the fleet if the part is in stock and how long it will take to arrive at the fleet’s location once it is purchased.
Kuo cautions fleets that there is some danger in playing the price game. “If you want to play the game of pricing everything out and sourcing from five different places, you likely are going to create more downtime. In the end you are going to lose money. Even though you are winning the price battle on sourcing parts, you are going to lose money on the time it takes you to fix trucks.”
He adds, “I can’t over emphasize the importance of having a relationship with a reliable and dependable distributor or distributor network.”
6. Pursue collaboration and integration
Fleets should also look at ways to more closely integrate their systems with those of their primary parts suppliers. “That makes the whole process easier and saves the fleet money,” Kuo says. “Whether it is tying the systems together electronically or collaborating with the distributor to make the transfer of parts more fluid, it is going to improve efficiencies in the long run.”
Vendor-managed inventory, or VMI, is one form of collaboration. VMI has been successful between manufacturers and distributors and dealers and has allowed them to improve fill rates to customers. When it comes to VMI between distributors and fleets, however, the jury is still out. “Unless there is a trusted, deep-rooted relationship between the fleet and the distributor, VMI won’t work,” Kuo says. “Any sort of VMI process won’t work well down to the fleet level unless there is a true commitment between the two organizations to make it work.”
When it comes to best practices for inventory management, data is critical. “Fleets need to maintain quality data in terms of parts numbers and VMRS codes,” Kuo says. “They need to be religious about making sure the information is accurate, because ultimately without good data, all the benefits of analytics is lost.”