Should The Parts Room Be Outsourced?

The "why" and "how" one organization decided to use a vendor for this function

After implementation of the fleet maintenance program, it was upgraded to include workstations for the technicians. The automated fueling system was also enhanced with the installation of fully automated devices in each vehicle.

Another proud achievement was the Fleet Department earning a Top 100 Best Fleets award – a program that recognizes and rewards peak performing public sector fleet operations in North America. We were number 15 when I retired.

Also implemented was an outcome-based budget – a budget system built on measurement of those key outcomes that are determined to be of most importance to a department.

For the Town of Greenwich’s Fleet Department, we measured the Fleet’s performance to projects and defined results and achievements to outcome measures and program statements. The evaluations of the results indicated areas where the Department was on target, while others were plus or minus original projections. This data was also useful in benchmarking.

Other successful projects were the purchase of hybrid vehicles, establishment of a car pool program, the long-awaited construction of a truck washing facility and compliance with environmental rules and regulations.

One area that required serious improvement was the operation of the parts room.

Q: Why did you decide to outsource the parts room function?

A: Of primary importance was having to do more with less and needing to maximize the available resources. The operation of the parts room had become burdensome and time-consuming.

The Fleet Department was already subletting some specific repairs and tasks/jobs that were performed more efficiently and effectively, like accidents repairs, towing, air conditioning work and alignments. This practice allowed the Department to be more cost effective.

I had been looking at alternatives for the parts room operation, and outsourcing the function looked to be a viable solution.

Among the challenges faced was that due to the bidding process for purchases mandated by Greenwich, and the different types and age of our vehicles and equipment, it became harder to obtain parts. There was more than $300,000 worth of parts in the parts room. Being a union facility, staffing was another issue.

Too many resources were being used, and vehicle downtime due to delays in obtaining parts had to be reduced. Plus, there were many other services that could be provided by a vendor and the parts room operation is not a core function.

Q: How did you justify and implement the project?

A: First, we had to define the issues and the objectives. Among these were:

  • Increase productivity in the parts room operation.
  • Increase parts-on-demand availability.
  • Reduce related parts downtime and establish parts on demand average.
  • Increase technician work hours to actual repair work and core functions.
  • Reduce paperwork.
  • Better monitor parts room activity.
  • Reduce administrative functions related to parts room activities.
  • Eliminate current inventory, physical inventory counts and variances.
  • Pay for parts as used.
  • Eliminate obsolete parts.

Then, we needed to develop an implementation plan and timeline. This encompassed:

  • Contacting other municipalities that had outsourced the parts room operation to learn from their experiences.
  • Listing pros and cons from input received and user departments, as well as addressing their concerns.
  • Identifying costs involved and projected savings.
  • Analyzing the time and cost needed to implement.
  • Preparing a Request for Proposal (a document needed to solicit bids from potential vendors) to include all contingencies and added services.
  • Defining network and non-network parts and markups.
  • Establishing parts on demand average that had to be achieved by vendor.
  • Coordinating with other Town departments.
  • Developing procedures and policies pertaining to parts outsourcing operation.

Q: How did you get buy-in from stakeholders?

A: Surprisingly, that part was easier than anticipated.

Once we learned about the areas of concern that were the most important to the stakeholders we were able to address them. These included:

  • Current physical inventory.
  • Cost during change over.
  • Cost projections versus actual costs.
  • Emergency coverage and staffing hours and personnel.
  • Current personnel in parts room.

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