3 Ways You’ll Save Through Better Parts Inventory Management
With so many parts coming and going everyday, it’s a huge opportunity for organizations to save money by managing it more effectively. This article will show you 3 ways you can save by using a high-end fleet management software system.
Collective Data software was built with the goal of making different elements of management easy and efficient. When it comes to managing a complex and large part inventory, that’s critical. By using a fleet management software system like Collective Data’s, you’ll be able to not only save yourself time but create opportunities to save your company money. Upper management may call you a hero. Maybe you’ll earn a raise. Whatever the result, managing parts will be much easier and you’ll be confident that you have the parts necessary to keep your fleet maintained and operational at minimal cost.
1. Recapture More Warranty Dollars
How are you currently tracking warranties on parts? Collective Data software makes it easy to track each and every warranty on parts. 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.
- Let’s assume a total yearly spend on parts for a medium-sized fleet is $500,000.
- Let’s assume that 3% of parts break before the warranty period ends.
Potential savings on improved warranty claims:
$500,000 x .03(claimable warranties) = $15,000 savings through improved warranty claims per year.
By improving how warranties are tracked and claimed, organizations can see quick and worthwhile savings with Collective Data’s fleet and asset management software.
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? Is there any upcoming PM on any pieces of equipment that will need those parts? When will they be coming in for the scheduled work?
These are all questions that are easily answered with Collective Data software. It gives you the tools to easily identify and track parts in better detail so you can maintain a tighter inventory.
In a conservative estimate, Collective Data fleet management software should help a fleet reduce spare or obsolete parts purchases by at least 10% after implementation vs manual methods. The math is simple for this calculation. To estimate potential savings, let’s assume the fleet has a current parts inventory value of $100,000.
$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 Returns
Collective Data software alerts 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 in place it will be much easier to manage and have to data to prove that it’s being done. Our experience shows that at least a 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.
$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. Want to see our fleet management software in action? Request a demo and we’ll show you how our software will make your job easier.
Download our free Return On Investment white paper to learn about other benefits you’ll see such as reduced downtime savings and labor productivity improvements.