Should The Parts Room Be Outsourced?

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


We detailed the implementation and timeline process and kept the employees, user departments and town officials informed on a regular basis.

Once the stakeholders were convinced the program objectives were being addressed and their concerns were being met, there was no resistance.

The current inventory placed under the vendor’s control was separated, procedures to measure costs were put in place, coverage and staffing was addressed and the current personnel involved with parts were transferred to another department. The outsource vendor and Fleet became partners in providing parts for the town’s vehicles

Q: Was the project successful? How did you monitor and measure the success of the project?

A: Once the vendor was selected, details – like insurance, entrance into the Fleet facility and hours and personnel – were addressed. We then prepared for the parts room physical inventory that would place the parts under the control of the vendor. The Request for Proposal (RFP) spelled out the inventory of network parts to be kept in stock.

After the first three months, a comparison was made to compare to the cost analysis, projected savings and increased productivity.

After six months, the parts-on-demand averages where calculated using a special calculating form devised specifically for this purpose. Each month, tabulations were made to insure that the vendor complied with the parts on demand average.

Outsourcing the parts room function was implemented in 1999. When I retired in 2009, the average monthly parts-on-demand and network and non-network parts exceeded the requirement by more than 2 percent. In the first year alone, more than 4,400 labor hours were redirected to our core functions and administrative paperwork was significantly reduced.

Q: Do you have any advice for those contemplating outsourcing the parts room function?

A: Times have changed. Now parts room outsourcing vendors are on approved vendor lists, eliminating the need to do extensive RFPs. This would have avoided many of the problems we encountered in 1999.

The most important recommendation I would offer is that you know the reasons you want to outsource the parts room. Clearly understand what your objectives are, as well as your expectations.

Perform an analysis to determine if outsourcing is the best way to go for your organization.

If it is, develop a detailed implementation plan and timeline for accomplishing the project and be certain to keep all stakeholders informed and involved. Knowing the results you expect, and how you will monitor the progress, is critical for the success of this project.

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