With so many parts coming and going every day, it’s a huge opportunity for organisations to save money by managing it more effectively. This article will show you 3 ways you can save by considering ways to use and configure your fleet management software system. These areas are as follows:
- Parts Warranty Management
- Streamline Parts Inventory
- Core Part Policy & Returns
When it comes to managing a complex and large part inventory it’s critical to configure how parts are recorded and tracked against repair/replacement reasoning. Adopting this approach will enable your business to not only save time but create opportunities to save your company money. This will ultimately build confidence around having the parts necessary to keep your fleet maintained and operational at minimal cost.
1. Parts Warranty Management
How are you currently tracking warranties on parts? Recording warranty on parts in the system and monitoring this is critical. When a mechanic adds a part to a work order, the system will automatically notify them if the part being replaced appears to be under warranty. That will apply whether it’s under the part’s warranty or the piece of equipment’s warranty period. This notification is the first layer of defense to make sure parts are being claimed under warranty and not forgotten about. A saving is as follows:
- Let’s assume a total yearly spend on parts for a medium-sized fleet is £300,000.
- Let’s assume that 3% of parts break before the warranty period ends.
Potential savings on improved warranty claims:
£300,000 x .03(claimable warranties) = £9,000 savings through improved warranty claims per year.
2. Parts Inventory Reduction
Without proper tracking methods, it’s common to over-order parts. When a particular part gets low an employee may send in a request to order for 5 more. However, do you really need 5 more? Are there any upcoming projects or modifications on any pieces of equipment that will need those parts? When will they be coming in for the scheduled work?
In a conservative estimate, configuring software should help a fleet reduce spare or obsolete parts purchases by at least 10% after implementation vs manual methods. A simple calculation example is as follows: To estimate potential savings, let’s assume the fleet has a current parts inventory value of £100,000.
Potential savings on a reduced parts inventory:
£100,000 (current inventory value) x .10(reduced % of unused or obsolete parts ordered throughout the year) = £10,000 savings per year.
3. Core Part Policy & Returns (refurbishment)
Software alerts are useful to users when there is a core return opportunity and tracks when the return activity has taken place. These types of transactions are easy to miss without software in place, but when you do have the software and functionality in place it will be much easier to manage and have the data to prove that it’s being done. On average 5% saving in an annual parts budget can be achieved through better core part claims. Again, let’s assume the fleet has a current parts inventory value of £100,000 so we can calculate the potential savings.
Potential savings on core part returns:
£100,000 (current inventory value) x .05(% received from core part returns) = £5,000 savings per year.
These 3 areas of ways to improve parts inventory management are just the beginning. The above examples could reduce costs by £19,000 per year. For more information about how Winflotte could help you manage your inventory with its HGV and equipment module, please contact us.