4 Ways We Improved Our Parts Room & Reduced Inventory by 29%

The City of Madison, Wisconsin, fleet operation keeps a parts inventory of $856,000, but it wasn’t always this low. Just four years ago, it was closer to $1.2 million, but inventory auditing and other efficiencies have allowed the operation to reduce its stock while improving parts availability.

Fleet Superintendent Mahanth Joishy, who joined the department in 2017, details how staff members did it.

1. Conduct a thorough inventory count. The Madison parts inventory hadn’t been counted in eight years, and the final count was off, with lots of parts that hadn’t been moved in three years.
2. Get rid of bench parts. Some mechanics, if they receive a pack of six parts, will use one and keep five at their bay, Joishy explained. While it might be more convenient for the technician, it messes up inventory counts, leading parts staff to buy more of the same item for the parts room. Joishy changed the policy so technicians couldn’t do this.
3. Find missing parts. In its initial audit, the team found a $40,000 stash of parts in a mezzanine in one of the garages. The only people who knew about this storage space had left. Most of it was usable parts, and staff members made sure the parts were in the software system and returned obsolete parts to the vendor for credit. This windfall caused the most significant change in parts inventory costs.
4. Track parts correctly and keep only what you need. Parts room staff conduct inventory counts every year, and high school apprentices often help so they can learn about inventory management, Joishy said. The goal is to reduce or eliminate inventory that hasn’t been used in three years, and an obsolescence report from the Faster software parts management module helps staff members identify these parts. As a mid-size city, Madison can get needed parts fairly quickly from a network of vendors in the city if it doesn’t have it in stock.
   
   “We track very closely how long it takes us to get parts to our mechanics on a daily basis, and it’s even better than before,” he said. The fleet operation how has five or fewer vehicles waiting for parts at the end of the day, down from more than 20, Joishy estimated.

Joishy said his next goal is to eliminate the parts counter entirely by allowing technicians to order parts directly from their tablets, which every technician has. This will allow technicians to save time (staying in their bay and getting parts quicker) and improve accountability (eliminating paperwork, and hopefully, reducing inputting errors).