Heavy Duty Trucking

JUL 2014

The Fleet Business Authority

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46 HDT • JULY 2014 www.truckinginfo.com VENDOR MANAGED INVENTORY Once you have inventory, it has to be managed properly. Many suppliers are now offering to take that headache away from fleets by managing inventory for them. "Done correctly, [vendor managed inventory] takes excess work- ing capital out of the supply chain, making the supply of parts more reliable with less inventory and hence less capital," Bickford says. "It is essential that knowledgeable and experienced people manage the process and allow the system to do its work without unnecessary intervention." VMI improves the overall breadth, depth, and fill rates to end users by using daily demand to predict future demand and replenish sales on a more consistent timeline, Meritor's Bauer explains. Joe Laux, CEO at Wisconsin-based Freightliner dealer group River States Truck and Trailer, says another benefit of managed inventory is that it reduces obsolescence. "A dealer may run 5% to 10% obsolescence within a 12-month period, but fleets may have 50% obsolescence." Having your parts supplier manage inventory can help control obsolescence. John Wisdom, marketing technology manager, Paccar Parts, agrees. "The unfortunate thing that happens with a lot of the fleets is they become parts collectors because they buy a part and then it just sits on the shelf. That is money that is not being put to good use. "You have to know why you are buying it, and then a good inventory control system will help you see you really The old adage " if it seems too good to be true, it probably is" certainly applies to truck parts. According to Jane Clark, vice president member services for NationaLease, the conversation about counterfeit parts is starting to "bubble up again, probably because all the pressure on costs these days." The Federal Trade Commission indicates coun- terfeiting is a $12-billion-a-year problem for the automotive industry. To protect yourself from counterfeit parts, Clark says you need to take the time to look at things like parts packaging. She suggests asking questions such as: • Did the part come in a plain white package? • Does the company's logo look the way it should? • Does the part itself look like the original part? "They should take a minute to double-check these things. But they also need to be careful of where they are purchasing. Is it a reputable place that they have purchased legitimate parts from in the past?" She says the biggest problem is with parts that are replaced a lot. "Things like filters and brake parts tend to attract counterfeiters more so than specialty parts that don't get replaced as often. So put a special eye on those frequently replaced parts," she advises. Another red flag is the price of the part. "If it is an OEM part or a brand name part that is discounted way beyond what you normally can buy it for, it's best to avoid it," she says. "Saving a dollar or two on a part that is a bad part which you will have to replace several times, isn't going to save you money in the long run. You may be saving now, but you will be paying more later." Too good to be true Parts-Buying Practices Quality brake linings are tailored for specific applica- tions and have specific friction and wear character- istics. Your supplier should be able to tell you which material will work best for your applications. "A lot of the fleets … become parts collectors because they buy a part and then it just sits on the shelf." – John Wisdom, Paccar Parts don't necessarily have a need for that particular part, but maybe you have a need for other parts you should have in stock." VMI systems should not just be allowed to run on auto- pilot. Parts ordering plans need to be reviewed in context of what is happening with the fleet. "For example, if someone using VMI has a signifi- cant business win or loss, the algorithm will not know," Bickford says. "If there is exponential growth of a product for some reason, the system will not pick up on the step change in demand as quickly as demand grows. This is why you must have competent people at the supplier and the customer engaged in managing the process." Ted Rose, vice president of customer support at Vir- ginia-based Kenworth dealer Truck Enterprises Inc., says

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