Reducing costs and maximizing efficiency are essential exercises for any business aiming to increase revenue and grow profitability. There are many traps and bad habits that companies often fall into that can cause unnecessary amounts of revenue to leak from the business. Organizations operating a fleet are particularly vulnerable to these pitfalls as they are responsible for the maintenance and general upkeep of their vehicles. This means that fleet managers are responsible for stocking spare parts and necessary tools. Collecting, logging and managing your inventory can be time-consuming and costly, leaving many potential gaps for insufficiency and increased overheads.

For most companies operating a fleet, the vehicles owned will be directly responsible for generating some of the overall revenue for the business. In many cases, they can also be one of the biggest costs. Regularly reviewing expenditure and streamlining inventory management is the only way to keep the operation lean.

Unfortunately, every vehicle runs the risk of breaking down or getting damaged at some point so it’s important for any company running a fleet to stock a sufficient selection of spare parts. Depending on your specific vehicles, these could include things such as spare tires, batteries and fluids. It’s essential to stock parts such as these in the event of an incident but you may be spending more time and money than you realize if your inventory management system is outdated or insufficient.

There are a number of ways you can streamline your inventory management system, thereby increasing efficiency and ultimately reducing costs. Many companies fail to implement effective parts management initiatives and often incur unnecessary costs and experience regular problems when it comes to purchasing, stocking and documenting parts. Try these tips to improve your inventory management system.

Inventory criteria

In order to build up a sizable and practical inventory of spare parts, it’s vital that you set out a strict series of criteria regarding your stock. There are many things to consider when building up an inventory. You need to identify which specific parts you need on hand and how many you require at any given time based on the specific needs of your fleet. If your company lacks a clear set of guidelines regarding the purchasing and stocking of parts in your inventory, it will result in an ad hoc approach which lacks any real consistency and misses cost efficiency opportunities. This can often result in insufficient stock levels of vital parts or an overflow of parts that aren’t needed which in turn ties up capital.

Regular inventory checks

It’s important to perform regular stock checks if you want to maintain a streamlined inventory which has the correct amount of necessary stock. Effective inventory maintenance is a vital part of reducing overall fleet costs. If left unchecked, your inventory may become out of balance and can increase fleet costs. If you have a number of parts in storage which have been periodically ordered but are going unused, you’re spending unnecessary amounts of money and running the risk of them becoming outdated and going to waste.

Inventory management software

Thanks to developments in software-based management systems, fleet operators can now run everything from a centralised program. By automating stock management processes you can save a lot of time and money. Fleet management software allows you to monitor stock levels, schedule automatic part orders, identify preferred suppliers and consolidate key documents to eliminate the need for physical paperwork.

Using a centralized computer software program to manage your inventory reduces the risk of human error and improves efficiency. All processes and stock related activities can be setup to run automatically, thereby reducing the risk of mistakes. For example, fleet management software can monitor stock levels and automatically order spare parts in time for them to be used. This means that only necessary parts will be ordered as and when they are needed, maximizing storage space and reducing costs.