A productive inventory management system is the cornerstone of every fleet management system. Fleet managers need to handle many tasks every minute; fleet coordination and management must be done with utmost care.
Fleet managers need to check whether the fleet has dispatched on time and reach the destination on time; they must also keep their eyes on the next schedules, driver details, need to respond to emergencies, etc.
While dealing with these high-priority tasks, they may often forget about inventory management.
Inventory management is concerned about keeping track of spare parts and optimizing the available resources to improve the profit margin. Poor inventory management leads to money and time loss in several ways. It will also cause increased downtime, which may adversely affect the business and customer demands.
Let us see how a fleet management system can enhance inventory management.
Signs of poor inventory management
How do you find that you have a sound inventory management? Let us have a glance at some of the tell-tale signs that will help you to identify this:
- Loss of warranty details
- Unorganized storage space
- Wasting time for searching the right parts
- Increase in expense for buying a replacement and spare parts
- Increased downtime because of unavailability of parts
- Lack of inventory audit
- Storing replacement parts that are no longer required
- Failure to track asset movement
Impact of poor inventory management
When inventory management is adequately handled, it can reduce the downtime of your fleets. From the above points, we can analyze how each factor may contribute to the bigger picture. The crucial components of fleet management are an asset and stock management.
Increased vehicle downtime
When your vehicles lack spare parts, it increases vehicle downtime. You may need more time to buy the spare parts, and if the part is not available during the time, it will increase your vehicle’s downtime. Also, when your storage space is unorganized, and you have no idea whether you have the part in stock or not, you may spend more time searching it. So until you find the required part, your vehicle will remain idle. The longer your vehicle is out of the road, the more it will affect your business.
Inventory with useless and unwanted spare parts
Another issue concerned with poor inventory management is that your storage space is filled with spare parts that are useless or are no longer required. For instance, if you have received a spare part with some minor changes, but you no longer need that, it should be exchanged with the supplier immediately.
Storing this in the warehouse won’t benefit you in any way. Also, if you have the wrong-size spare parts, and you noticed this after months, you can’t exchange the item, and it is nothing but money wastage.
Unavailability of required parts
Poor inventory management lacks the availability of required spare parts in stock. If your vehicles need minor replacements like brakes, filters, etc., and you do not have these spare parts in stock, you need to wait until the parts to arrive. Thus, minor issues can also lead to increased downtime and affect the profit margin.
Loss of warranty details
It is required to keep track of the warranty period. Because your mechanics may be unaware of this and instead of claiming a warranty, they may get a new one. Thus, carelessness on the warranty period may cause you to lose a sum of your profit for buying new products.
Poor inventory management is all about unnecessary expenses. As we have seen earlier, you may end up sending your money on useless parts, unclaimed warranty, unavailability of components, etc. Also, the unavailability of spare parts may lead to increased vehicle downtime.
Loss of customer satisfaction
Poor inventory management will affect customer satisfaction. The downtime of the vehicle will cause delays or changes in the schedules. Sometimes, you could not send the vehicle booked by your customer and replace it with another one. These instances can create dissatisfaction in your customers and will reduce their trust in your firm.
How to optimize inventory management?
Organize your parts room
When your inventory is made easy to access, workshop mechanics can stay more productive. Arrange inventory of shelves and bins and mark each place using bright, bold labels, making it easier to identify each section.
Also, arrange the parts in the order they are bought so that the oldest ones are used first before their warranty expires.
This way of disciplined arrangement will make it easy for fleet managers to identify the parts that need to be refilled.
Make use of barcodes
When you buy a new product, use a barcode reader to read all the details of that product and update them in your database. This way, it makes it easier to access the availability, and if running out of stock, you can place an order for it.
Effective inventory management with Automax Fleet management software
Automax fleet management system comprises top-notch features required for an effective inventory management system. It is easy for you to customize our inventory management system based on your business requirements.