Survey Shows The Industry’s Parts Management Practices

*Special fleet knowledge series sponsored by NAFA*

You know what they always say: If you want to find out, go ask. NAFA Fleet Management Association has always taken this to heart, not only in terms of gauging member expectations, but in understanding the whole of the fleet management industry. By asking questions of fleet professionals — the what, how, and why of their work — NAFA is able to respond and provide information accordingly. One of the most effective research methods is through surveys.

Researching Parts Management Practices

In late 2012, the Association was approached by Dr. A. Patricia Murrin, D.B.A., a supply chain specialist with an extensive background in supply chain management and demand forecasting; Dr. Murrin was researching today’s challenges and practices in spare parts management within the fleet maintenance industry. Seeing the value in such information, the Association distributed a Spare Parts Management survey to the membership; some of the results are highlighted below:

• Estimating needs: Seeking the root causes of spare parts needs — such as lifecycle of fleet assets, seasonality, and specific event impacts on repair needs —will improve parts forecasting.  In addition, by factoring in repair Bills of Material (BOMs) to estimate needs, fleet management can improve decision-making about which parts need to be regularly stockpiled and which do not.
• Classifying parts: Classifying parts according to criticality, usage rate, cost, and other fleet-appropriate criteria can also help distinguish between items that are most needed and those that are infrequently needed. Grouping parts in this way helps to prioritize management attention and set stocking policies.
• Defining policy: Defining a policy statement with written procedures for every inventory activity and limiting the authority to modify inventory parameters, such as min/max levels, ensures continuity and accuracy of information about usage rates and current stock levels.
• Controlling inventory: Drop-­shipping parts on a frequent basis to individual maintenance sites, either from a central distribution facility or by the vendors themselves, minimizes the need for excess stock at separate maintenance facilities. Vendors can also play a cooperative role in stocking and managing certain parts by means of vendor-managed inventory agreements.
• Barcoding parts: Barcoding parts upon receipt from vendors can enable accurate parts inventory and usage logging. A barcode system enables rapid recording of parts flow, showing when items come into the stock room and when they leave. Accurate inventory and usage data indicates how many of a particular item are left, whether it is time to reorder, or whether it is time to decrease back stock quantities. A barcode system does not replace the traditional physical inventory audit and cycle counting but complements them by saving time and improving information accuracy.

Feedback from the survey suggested that, by keeping the processes as uncomplicated and uncluttered as possible, individuals who are involved with overall compliance are able to make more accurate estimates of parts requirements. In addition, the clutter and confusion caused by data inaccuracies are reduced. In the words of a survey respondent, “Simple, people-based solutions involving a logical analysis of inventory, structure and governance (policies and procedures), and metrics can yield inventory reductions of 50% or more, without compromising maintenance service rates.”

Inventory Optimization Is a Team Effort

Spare parts planning requires more inputs, and inputs from more sources, than other inventory types. Dr. Murrin noted though, that “what all materials have in common (raw materials, components, spare parts, work-in-process, assemblies, finished goods) is that inventory planning and optimization are best accomplished through a sound foundation of policies and procedures, as well as a collaborative, team-based effort with a rich flow of information.”

That last statement confirms the larger point about the value of survey-based research within the fleet community. By offering this team-based channel for sharing successful practices, fleet organizations and the industry at large move forward by adopting best practices.

NAFA makes the information gathered from surveys available in several ways. You can find survey results regularly issued in the Association’s membership magazine, FLEETSolutions; in articles in the e-newsletter­­ NAFA­Connection; and online on both NAFA.org and FleetED.org. Log into your member account, use the search term “survey” to access, and a world of valuable data can be available to you.

About the Author

Donald Dunphy is the communications assistant for NAFA Fleet Management Association. He writes for and manages the NAFA­Connection e-newsletter and contributes to FLEETSolutions and I&E News.