15 Ways to Improve Your In-House Parts Room

October 2013, Government Fleet - Feature

by Thi Dao - Also by this author

At A Glance:

Some ways to improve the in-house parts room are:

  • Manage inventory wisely, and make sure obsolete parts don’t stay on the shelves
  • Train parts personnel and assign them other inventory control duties as well
  • Reconsider the way you purchase parts
  • If starting a new contract, detail exactly what you want.

Parts personnel also control other fleet inventory at the City of San Diego. Pictured are Stock Clerk Garry Illig (left) and Parts Supervisor Jim Degler. Photo courtesy of City of San Diego.
Parts personnel also control other fleet inventory at the City of San Diego. Pictured are Stock Clerk Garry Illig (left) and Parts Supervisor Jim Degler. Photo courtesy of City of San Diego.

The debate about which parts management method — in-house or outsourced — is more cost-effective and/or efficient is continually being fought. Many who have outsourced their parts rooms believe it’s the best move they ever made. Others haven’t had great experiences, and still others believe in-house staff, who don’t have to bring in profits, can do it better.

Kathy Beach, CAFS, fleet admin and parts supervisor for Arapahoe County, Colo., feels a sense of pride in the County’s parts room and its efficiency — she voluntarily took on the parts role in addition to her administrator role after the prior parts supervisor left on disability, overseeing $200,000 in inventory. She believes there isn’t savings in outsourcing, citing as an example a colleague who is now fighting to bring his parts room back in-house after outsourcing it. Only a vendor impropriety or employee theft should lead to parts outsourcing, Beach said.

Sam Lamerato, CPFP, fleet superintendent, City of Troy, Mich., has similar opinions about the parts room. He stresses that an efficient parts room is more cost-­effective than an outsourced one. Lamerato has compared his numbers with those of parts management companies, and the City’s prices are lower, partially because they’re buying from the same warehouses, he said. An additional factor to consider is staff time, but Lamerato said, “If you have a good parts inventory program, your staff time is minimal.”

Chris Hoffman, CAFM, manager of Transportation Services for Oklahoma State University (OSU), is in the unique position of having brought his parts room back in-house after outsourcing it for two years. The vendor couldn’t provide the specialty parts he needed for transit buses. However, Hoffman is not against the idea of outsourcing and may consider doing it again in the future, making sure the vendor will carry all the parts he needs. The OSU parts room has about $300,000 in inventory.

Finally, John Clements, deputy director, Fleet Services, City of San Diego, previously worked at the San Diego County fleet, which had an outsourced parts room. The City chose to keep its parts operation in-house during its managed competition process — there are now 13 parts rooms, large and small, and the City purchases about $7 million in parts each year. Clements, having now worked with both types of parts rooms, hopes to be able to implement a hybrid approach — a single-source parts provider with an in-house parts staff.

For those with in-house parts rooms, continually looking at ways to improve them never hurts. These four fleet professionals discuss some of their best practices and new initiatives for parts room management.

1. Purchase from a Single Supplier.

The City of San Diego is currently working on a request for proposal (RFP) for a single-source contract. Clements hopes this will eliminate the time (and cost) of having multiple standing contracts and having staff members shop for a part. While getting quotes from various local vendors may result in a less costly part, the time and effort it takes staff to obtain that small savings is not always worth it, he emphasized.

“Only writing one check and only dealing with one parts vendor for warranty claims” are other benefits, Clements added.

Clements said these contracts are also available from cooperative procurement organizations, such as the National Joint Powers Alliance (NJPA). However, it’s up to the public agency whether its departments can use the contracts. Purchase from Warehouse Suppliers & Specify Requirements in Contracts. At the City of Troy, Lamerato said purchasing parts from national warehouse suppliers has helped improve procurement. Not only does this allow the City to get more discounts, but it also cuts down on the number of purchase orders staff have to write.
The City has a number of open contracts for various parts. It awards one primary and two secondary suppliers for a period of three years, with the chance to renew after three more years. The City requires winning bidders to provide factory and technical training to fleet staff, buy back obsolete parts at current cost, and help City staff rebox and relabel shelves. Suppliers also can’t raise prices for six months. After that, they can do so only if the manufacturers have raised prices, and the City has the option to reject the price increase and go with its secondary supplier, Lamerato said. In addition, the contract specifies that the City will not pay for shipping or restocking fees.
“If we order a part and we find out it’s a wrong part, we can ship it back and they can’t charge us a 20% stocking fee,” Lamerato explained.

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