Arsenault: Don't Over-Buy on Parts

Many maintenance shops buy more parts than necessary, in effect storing company cash on parts room shelves. Even when buying ahead, they sometimes pay too much, says Dave Reed, maintenance consultant for trucking maintenance software provider Arsenault Associates.

Reed, who has a 30-year background in vehicle maintenance, says if the shop manager needs a particular part 12 times a year, he is likely to buy 12 at a time.

“Let’s say it’s a $100 part,” Reed says. “If the manager buys 12 of them in January, that’s $1,200 out of the company’s cash flow that he just parked on a shelf. Multiply that $1,200 by dozens or hundreds of parts, and you’re looking at serious money.”

Managers should do some research, says Reed. If you use all 12 parts in the first three months and nothing thereafter, then you may want to buy six now and six more when you get down to one or two. The point is to avoid tying up that $1,200 in cash on a shelf.

Reed also warns against people offering a “good deal.” In one shop Reed visited recently, a salesman had sold the manager parts that came 12 in a box. The parts sold for $5 apiece, but the salesman offered a “good deal” – a whole case for $65, or $5 more than had he purchased the items individually.

Printer Friendly Version
Email This Story
RSS
Bookmark and Share

Managing The Shop: Related News

3/29/2011 – Arsenault: Don’t Over-Buy on Parts

Many maintenance shops buy more parts than necessary, in effect storing company cash on parts room shelves….
More

3/2/2011 – Have Maintenance Expertise, Will Travel

Some of the most well-known members of ATA’s Technology and Maintenance Council have become limited-time executives, spreading their expertise over a number of smaller truck fleets as they spend time with each client to help them get the most out of their maintenance operations….
More

JOIN OUR NEWSLETTER
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.