Learning Zone

Parts inventory management best practices

By Ellen Sowerby
26 January 2021

Having the right parts on hand when needed is critical for any successful workshop

We share our five steps towards developing inventory management best practice


inventory manager holding 2 pieces of stock


Vehicle service, maintenance and repair (SMR) is a high cost expenditure for any fleet. However, foregoing such an importance part of fleet management leaves you potentially in breach of Road Transport Laws by not having fully roadworthy vehicles.

Key to managing these costs is through an effective parts inventory management plan. Such costs can account for a sizeable portion of any fleet maintenance management budget and have a significant impact on overall management and administrative expenses too.

Streamlining parts inventory management best practices can have a very positive effect on your fleet’s bottom line. With a few tried and tested best practices, inventory management can become a driving force in meeting overall cost objectives.

So, where do you begin?

Whether you have an inventory management structure already in place or are in the initial stages of development, these five best practices will set you on the right track.


Best Practice #1 – Stay organized

Ask yourself – do my technicians know where parts can be located?

Can frequently used parts be accessed quickly to keep workshop operations running smoothly?

If the answer is no, or perhaps a little vague, then don’t panic! Organizing parts so that fast-moving items, such as those used for service maintenance, can be fairly straight forward. Shelves and storage areas need to be arranged so that components for major system categories such as engines, brakes and electrics can be pulled at a moment’s notice, allowing technicians to meet repair deadlines and reduce unnecessary downtime.

Typically, workshops tend to devote too little time to proper stock planning. Making time to implement a proficient inventory management system creates an organized work environment that helps workshop managers accurately allocate time for jobs, thereby improving productivity across the entire business.


Best Practice #2 – Develop parts knowledge

There’s nothing more frustrating than having a vehicle interval service or repair delayed because the right parts are not on hand. The depth of your inventory and the way that it is managed are critical success factors in having the right parts available, when and where they are needed.

Similarly, having a high inventory of a particular part that is rarely needed is wasteful. An unnecessary expenditure has been made and and storage space is taken up that could have been utilized for faster moving parts.

Inventory control staff require a good working knowledge of vehicles and their parts requirements. Knowing that particular vehicles follow a parts replacement cycle allows for efficient inventory planning and control, and far more cost-effective purchasing practices. It also ensures that adequate stock is on hand, eliminating the need for more frequent and last-minute ordering.

Service data from telematics systems can provide you with the information that will enhance your inventory optimization plan, further reducing downtime from service.


Best Practice #3 – Integrate your management systems

In order to streamline your parts ordering, returns, billing and payment processes, it’s important to look at how your fleet management and other software systems are connected. Integration also ensures data accuracy and reduces demands on administrative, finance and other personnel, in some cases even cutting staffing needs.

Using fleet management software in conjunction with inventory management systems can help monitor and adjust stock based on usage and planned upcoming needs. Information on parts used can be seamlessly transferred from repair orders to a central system. Purchase orders can then be automatically issued when stock levels drop to a pre-determined quantity. Such automated inventory replenishment also minimizes time-consuming administrative tasks.

Integrated parts, asset and fleet management systems will become a valuable source of data on parts failures and items that are not lasting for their expected service life. Through asset service histories, you will see parts usage trends that can drive analyses between manufacturers and suppliers and lead to more informed purchasing decisions.



Best Practice #4 – Make vendors a resource

When parts inventory management involves your suppliers, it become much easier to meet your fleet’s stock needs and establish reordering parameters that help maintain adequate inventory. Their experience across multiple fleets can also help identify recommended maintenance schedules to prevent part failures and compare parts from different manufacturers.

With a wider view of the parts market, your suppliers can also determine which parts provide your operation with the best overall value. That knowledge and experience is the source of finding not just the lowest prices, but also the right parts at the lowest cost.

Increasingly, parts suppliers are making it possible to integrate their inventory and purchasing systems within your fleet and asset management solutions. That connection can be very effective for handling emergency parts orders and in tracking warranty coverage on replacement parts, streamlining the processing of claims.


Best Practice #5 – Utilize inventory management software

Needless to say, any process that becomes automated reduces the risk of human error, minimising chances of poor inventory management & improving efficiency.

Parts inventory management software, as part of a comprehensive fleet management solution, enables the most effective stock control and purchasing practices. Inventory levels can be monitored and adjusted remotely, based on usage and upcoming needs. Visibility of stoked parts is available to all workshop team members which is an asset in itself when determining advanced vehicle maintenance scheduling.

The ability to source and purchase parts and work orders through designated suppliers once stock levels fall below a set level reduces both administration time and costs.

Eliminating paper-based and manual inventory replenishment and parts allocation processes, fleet and asset management software streamlines administrative and management practices.

When a parts inventory management system is in place, your fleet’s shop and technician productivity can rise, boosting asset utilization by returning vehicles to service faster. Opportunities for improved asset utilization by returning vehicles to service faster. Opportunities for savings can also be found with information that can be used to develop parts budgets and to make more informed purchasing decisions that will ultimately lower operating and maintenance costs.

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