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Have spares pa later

9th April 1971, Page 74
9th April 1971
Page 74
Page 75
Page 74, 9th April 1971 — Have spares pa later
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Which of the following most accurately describes the problem?

by Tim Hoare

THE PROBLEM of spares, their control and availability probably engenders as much, and very often more, emotion among haulage operators than any other single transport factor and the advent of 0 licensing, with its emphasis on maintenance together with plating and testing, has done nothing to alleviate the situation.

In the past operators have had to decide whether to employ a large capital sum and space to accommodate every conceivable spare part that may, but in probability won't, be required or, alternatively, to keep a small stock of fast-moving items and to rely for the supply of other parts on the efficiency of the local vehicle distributor. This alternative has meant taking into account the additional expense of being prepared to hunt around for some of the more elusive items.

It seems that most operators are unable to justify the very heavy capital outlay needed for an elaborate stores and, indeed, the tendency now is toward establishing a small stores with a rapid line of supply available and to rely on a good knowledge of alternative sources of spares.

Apart from the calculated risk that less money should be spent in chasing for spares than maintaining a large, comprehensive stores, there is the added advantage that where there is fleet standardization, less risk is taken of being left with a large quantity of spares when a fleet change is made.

Imprest stock system is a comparatively new method of stock holding that may be the partial answer to a haulier's prayer. With this method the haulier's stock is on loan from the supplying distributor and payment for the material is made only after it is actually used.

Before seeing how successful the system works in practice I discussed the theory behind the operation with Mr D. Hammond, parts manager of Steels Commercials Ltd, of Bristol, the Leyland, Albion and Scammell distributor, and now part of the Lex Group. Steels have been working the system for five years and now have arrangements with a number of concerns including Heavy Transport of St Austell, Ameys of Oxford, and Ready Mixed Concrete (South Coast), of Southampton.

Steels are not alone in lending stock on a sale-or-return basis but the conditions that the company imposes for the scheme's successful operation are basically similar to those of other firms.

The first point that was emphasized to me was the need for the garage to be very careful over whom it should place stock with. The company wants the stock control system used by the operator to be compatible with its own and the degree of security of the parts on loan to be such that at least one full-time staff member is responsible for the operation of the stores.

Conventional stock records are all that are needed, the important requirement being the accuracy with which they are kept up to date.

The system is limited to fast-moving items because the distributor wants, naturally, as quick a return on the money invested in the imprest stock. In order to ensure that only moving stock is involved Steels reserve the right to withdraw back into their own stock any item that has not been used for 12 months.

Agreement When, initially, an agreement is reached with an operator the garage buys the stock to be covered by the scheme. But no physical change takes place, as the actual material remains with the operator. In addition, the stock that is considered by the garage to be too slow-moving to be bought back remains the property of the operator. Thereafter stock checks are carried out by the garage's personnel at intervals of about three months—any discrepancies are the financial responsibility of the operator.

After-sales service

Mr Hammond told me that there was no direct benefit to his parts department and the system was solely being offered as part of the after-sales service to the customer. Any advantage gained is on the supposition that an operator, relieved of some of the financial burden of keeping spares, is more likely to invest the money in something else (preferably new vehicles from Steels!).

For the garage a considerable amount of extra paperwork is involved. The only method of record keeping which is practicable is to have separate record cards for each customer who has parts on loan. This means that one item may have several stock cards relating to it. In addition, there is the expense, not usual for a parts department, of sending someone to carry out the periodic stock checks of its customers' stores.

In most cases so far it has been the operator who has approached Steels to ask for the system to be initiated and the list of interested hauliers is steadily increasing.

One of the first operators to have imprest stock was Ready Mixed Concrete (South Coast) Ltd and for the past five years all fast-moving items for Leyland and Albion vehicles have been obtained on loan from Steels; until a year ago from the Bristol garage but since last year from the more convenient branch at Southampton.

It may be argued that the situation of RMC is not typical in that the 80 vehicles operated from the Southampton depot are owned by the drivers on contract to RMC. But for all practical purposes the maintenance and parts problems remain the same; costing of individual repairs is probably more rigidly controlled than is usual and this serves to highlight any shortcomings in the system.

Stock ratio Mr L. Freeman is the transport office administrator and is responsible for the running of the stores. Some £600-worth of stock is on loan, he explained, out of a total of £.5000. The ratio of imprest to normally bought stock appears high because the total figure includes spares for the mixer-units, standard equipment on all the vehicles operated, as well as spares for vehicles other than Leyland and Albion.

In practice the system works very well. An order to the garage is made out for the replacement of a part used which is then progressed in the normal manner; payment is then made when the replacement part is supplied. To Mr Freeman's continued surprise the discount rates have not been adjusted since the beginning of the scheme. "When the replacement part is supplied" is the crux of the whole matter and the problem of spares availability, which is universal, is the cause of the only real difficulty for the Operator. Originals bought Owing to delay in the supply of a replacement part for stock on loan that has been used, and which can occasionally take several weeks, Mr Freeman has found that price increases in the intervening period mean that a higher price is being paid for the item that has been used than if it had been paid for at the time of its use. The ' important point to realize is that payment is being made for the original item and not the replacement part which is, in fact, being supplied on loan.

One other minor problem may occur when RMC opens two more service garages in the South Coast region. The idea is that these garages will be dependent on the main Southampton depot for spares, and material will be transferred to the two subsidiaries as stock. Steels may require that the material is returned temporarily to Southampton when its stock check is necessary.

RMC is not dependent on Steels and imprest stock for all its requirements and in the event of a part being unavailable from them it may be purchased from another source. It is for this reason that the garage insists that separate record cards are kept by the operator for the two stock types and it is also considered essential to keep the actual stocks separate. To help identification of the two stocks RMC uses a simple colour code system to show which of two similar parts is on loan and which is its own property. By having this code discrepancies are avoided if for example, a part is removed from the stores and later returned unused.

Stock check discrepancies, for which RMC is financially responsible, have been very few and limited to the odd oil seal and wheel nut. That RMC has been successful in keeping accurate stock records—and in security—is best shown by the fact that for the past three years an annual stock check has been considered sufficient by the garage.

Good planning of the stock on the part of Steels has also resulted in very few items being returned as a result of non-movement. The biggest single item was a gearbox unit —but this return has been no hardship because the policy now is to rebuild rather than to replace, with the necessary parts readily available from the imprest stock. In theory the right also exists for the garage to have returned to it any Item that may be required by another of its customers (after all, it belongs to the garage). In practice, however, this has only occurred once, when a particular type of clutch assembly was in short supply; with the agreement of RMC one was returned and sold to an operator with a vehicle off the road.

Mr Freeman told me that while appreciating the wish of the supplying garage to restrict the amount of money that is involved in imprest stock he would like to see a greater range of parts covered by the system; the regular reviews that are made of the situation with Steels may bring this about. Generally, however, the conscientious housekeeping required to make the system work successfully is considered well worth the extra money that is saved.


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