The root of overbuying
As a general rule of thumb in the industry, between 30% and 35% of the average fleet’s maintenance costs are spent on inventory management. It’s little wonder when you look at the experience of purchasing parts. In 2021:
- 82% of repair shops experienced disruptions due to parts shortages in supply chains. Of this, 14% faced severe disruptions.1
- 84% reported increased delays.2
- 45% of shops needed to frequently purchase parts from outside their regular suppliers.2
With limited availability of parts, searching for what you need can take up valuable time. When you do find the part you need, it’s tempting to overstock to avoid future shortages. This not only increases inventory costs and parks money on a shelf, but you now have parts that might become obsolete over time, depending on the truck model and age. And let’s not forget the cost of the space required to store those extra parts.
There’s also the added problem of seasonal fluctuations. Some parts may be in higher demand during certain seasons. Overstocking during these periods can lead to excess inventory during off-peak periods, which can increase inventory costs.
This is what happens when your inventory management is inefficient. Poor inventory management practices can lead to overbuying or underbuying of parts. This is especially true for manual inventory management processes, which usually lead to inaccuracies in inventory levels, and hence overstocking, shortages, or both.
What you need is visibility into real-time data on inventory levels, parts demand, and maintenance needs. That’s how you make informed decisions about how much to stock. Otherwise, you end up overbuying to avoid shortages or underbuying due to inaccurate demand forecasting.
Real-time data holds the answers
With AMCS Fleet Maintenance software, you can tap into rich features that allow you to stay on top of your inventory.
For example, you can set min-max levels and reorder points for each part. You can even set these levels by month for parts with seasonal demands. This ensures that parts are only ordered when needed and inventory levels are always maintained at optimal levels. The software also offers automated reordering capabilities, which can help ensure that parts are ordered in a timely manner and prevent stockouts. By enabling you to more effectively manage your parts inventory, AMCS Fleet Maintenance can help reduce the costs associated with overbuying and maintaining excess inventory.
Another technique to help with supply chain, cost, and stocking challenges is to stock strategically within geographic regions. AMCS Fleet maintenance gives you visibility of all parts across sites and storerooms. This allows you to stock expensive parts like turbochargers regionally rather than at each site. You can safely have the inventory that you need while reducing carrying cost and obsolescence risk.
The system handles recording, tracking, costing, cycle counting and automatic reordering to ensure you always have the right number of parts on hand. Barcoding and QR codes can be used to accurately track parts usage and inventory levels in real time.
You can quickly and accurately find the parts needed for maintenance or repair. This helps reduce errors and avoid overbuying, which wastes resources and generates higher costs.
You can also add the ability to monitor and control external vendors by tracking activities and purchase history, plus their terms and contacts. By closely monitoring spending with vendors, you can use this data to negotiate better pricing for parts and services, while also holding vendors accountable for their performance.
These are just a few of the advantages of AMCS Fleet Maintenance. With accurate inventory tracking, and by reducing errors and overbuying, you improve efficiency. The result can mean significant savings in parts management and maintenance costs.
You might also find it helpful to read:
Controlling fleet costs with preventive maintenance
Watch On Demand Webinar: Fleet Expert Maintenance Tips
Other features include the ability to filter parts – even record photographic evidence – avoid duplication, and so much more. We invite you to learn more in our insightful webinar on ensuring best practice for managing your fleet maintenance.
Our panel of experts include:
- Bob Nolen, Transportation Services, Director of Fleet and Facilities
- Harold Graves, Stella Environmental Services, Director of Maintenance
- John Davis, AMCS, Head of Delivery – Fleet Maintenance
Get the whole story.
1Labor and parts costs driving truck maintenance bills higher, FreightWaves, 7 March 2022
2An analysis of the operational costs of trucking: 2022 update, American Transportation Research Institute, August 2022
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