Sarasota County’s Outsourced Parts Room Expected to Save $180K Annually
November 14, 2011
Greg Morris, CEM, Operations and Maintenance fleet manager for the County, said outsoursing the parts room frees up county monies held in inventory and ensures quicker parts delivery.
SARASOTA, FL - Sarasota County, Fla., Operations and Maintenance (O&M) Fleet Services recently outsourced its parts room, which had more than $350,000 of inventory monthly with yearly purchases totaling more than $1 million. The move to NAPA Integrated Business Solutions (IBS) is projected to save the county $180,000 annually, according to Greg Morris, CEM, O&M fleet manager for the County.
NAPA IBS won the bid for parts management and started operation on Oct. 3. The company took responsibility for supplying parts for more than 1,500 vehicles and equipment. The assets maintained by Fleet Services consists of parts for more than 350 different makes and models, ranging from loaders, dump trucks, ambulances, fire trucks, sewer vacuum trucks, arm mowers, lift station pumps, cars, and trucks, to chain saws, jaws of life, and weed trimmers, Morris stated.
The County has three Operations and Maintenance repair shops each with its own parts room. Previously, each parts room was staffed by a parts specialist, totaling three employees. Morris explained that having one employee at each parts location did not provide the separation of duties the county desired, as one person was ordering, receiving, documenting, and issuing parts. Increasing the number of parts specialists to two at each location would greatly increase the overhead costs and as an internal fund, it could make fleet not competitive with outside vendors. Also, Morris said, "when one [parts] specialist was sick or on vacation, I would place a technician in the parts room to fill in. Removing a technician from the floor to accomplish parts specialists' duties reduces direct labor income and increases overhead, and at a higher price." In addition, having only one parts specialist meant oftentimes technicians would be sent out to get parts -- multiplying the cost of the part. Another disadvantage that Morris cited was that he was limited in the availability of vendors that he could use to purchase parts due to strict insurance policies needed for those doing business with the county.
When NAPA IBS transitioned into managing the county fleet parts rooms, it bought much of the inventory at the cost the county paid. The company also manages some parts fleet decided not to sell such as items that are hard to acquire, or rarely needed but a must for emergency assets. NAPA IBS will manage those parts and issue them at no cost to the county. Morris said the contract with the company guarantees an 80% fill rate the first time the technicians request the parts at the counter or issued within 24 hours. The previous parts fill rate was around 40-45%.
One of the three parts specialists had resigned more than a year and a half before, and Morris had a technician temporarily filling this position. The other two specialists were reassigned -- one stayed in fleet, and the other moved to the parts warehouse of another department.
Morris said NAPA IBS also has parts for heavy-duty equipment with contracts or agreements with many major manufacturers. The NAPA IBS contract includes a runner who delivers parts to the shops daily and makes parts runs for all three shops, which means Morris won't be sending his technicians out for parts or stock. What's more, he said NAPA has a big warehouse in Tampa, about 60 miles away, further reducing downtime due to long lead times in acquiring parts for heavy vehicles and equipment.
"What we're seeing with the NAPA IBS contract is we are procuring parts at a lower cost from NAPA IBS than local vendors we had contracts with." Morris said.
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