Fleet Master award winner for medium-sized fleets Sarasota County, Fla., outsourced its parts program and integrated hybrids into its fleet to cut costs and achieve other efficiencies.
“To reduce parts and labor costs, and to improve parts availability, we outsourced our parts to NAPA/IBS in October 2011 and found significant reduction in costs,” says Gregory Morris, CEM, fleet manager for Sarasota County. “I had experienced both in-house and outsourced parts operations; I wanted a fresh look from our staff to assist in reviewing parts store options to make the best decision for taxpayers.”
Sarasota County is one of three winners of the 2014 Fleet Masters Award (the U.S. Air Force and York County are the others). The award is presented each year byConstruction Equipment and the Association of Equipment Management Professionals (AEMP), and is judged on categories such as finance (financial management, acquisition, warranty and performance guarantees); information management (benchmarking, life-cycle costing, specifications and technology); policies (safety, employee training, environmental and human resources); and controls (outsourcing, parts management, preventive maintenance, and shop and facilities management).
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It worked. Sarasota County’s annual savings in outsourcing its parts operation is approximately $180,000.
NAPA’s IBS (Integrated Business Solutions) unit uses Sarasota County’s parts inventory rooms at three county facilities to provide parts for a wide range of vehicles and equipment—everything from chainsaws to wheel loaders and cars to fire trucks.
“We were managing an inventory with yearly purchases totaling more than $1 million,” Morris says. “NAPA/IBS took responsibility to supply parts for more than 1,600 vehicles and pieces of equipment. And the parts stores in our facilities are custom tailored to each shop operation.”
The parts are owned by NAPA/IBS until issued to a technician for county repair or maintenance.
“Our inventory investment is zero,” Morris says. “That was a major factor in the decision, along with the facts that there are no obsolete parts, no audits or inventory counts, and there’s no money tied up in stock.”
After setup, there was a 300- to 600-percent increase in on-hand inventory with no upfront cost to the county. The inventory increase reduced waiting times for parts and downtime for equipment and vehicles.
“Over 85 percent of the parts our technicians request are available at the time of the initial request,” Morris says.
In addition, Sarasota County was able to eliminate multiple contracts for parts, bulk oil, tires, and batteries. NAPA also uses local vendors for small engine parts, certain types of service requirements, and specialized repairs.
“By using NAPA staff, we also reduced payroll, achieved 100 percent parts window coverage without using any of our technicians, and now our technicians don’t have to wait for deliveries or leave the shop to pick up parts from vendors,” Morris says. “Technicians were driving to vendors to procure parts, which was a huge loss in wrench time. Also, technicians were sometimes taken off the floor to fill-in for parts specialists’ absences, leave and sick time.”
There are a number of accounting benefits, too. Parts leaving the stockroom are documented and invoiced, and any credits are issued immediately.
“Now we have one vendor, one detailed statement, and we write one check, simplifying the reconciliation of monthly purchases,” Morris says.
Morris also says the county receives far fewer invoices from its purchase cards, going from more than 800 invoices a month to 100.
Another measurement for parts outsourcing success has its roots in the county’s increased fill rate. “The NAPA/IPS contract performance measure requires they guarantee an 80-percent fill rate at our technician’s first request or a 95-percent fill rate within 24 hours,” Morris says. “Our previous parts fill rate was 40 to 45 percent. We’ve gained a direct labor productivity and vehicle availability increase of 5 percent.”
NAPA also gives the county access to certain vendor contacts that allow it to acquire service at reduced costs. They warranty all parts, as well.
“We work directly with them on any warranty claim,” Morris says.
Parts aren’t the only thing the county has outsourced. “We review what we do and how efficiently we can accomplish every aspect of all Fleet Service functions,” Morris explains.
“If we are not competitive in an area, we attempt to improve the way we accomplish the task. We accomplish ROIs prior to outsourcing services to ensure we are receiving the best value for those services. We found it more economical, with better service to customers, to outsource a number of activities,” he says.
After careful study, Sarasota County now outsources transmission work, towing, glass, hydraulic hoses, tires and tire repairs, upholstery work, lawn mower maintenance, marine engine repair, exhaust systems, and cleaning and detailing.
“We ensure overhead is held to a minimum and we continually look for ways to improve, but if it can be accomplished by an outside agency—faster, cheaper and with a high-quality repair—we outsource the service,” Morris says.
The county has also increased its use of hybrids to save additional money and reduce its dependency on fossil fuels. “Ninety-five percent of the vehicles in the administrative car pools are hybrid assets,” Morris says.
Morris says another type of hybrid has found its way into the county’s truck fleet. “Three of our bucket trucks are hybrids, as the boom operation doesn’t require 8-cylinder engines to be running, which consumed large amounts of fossil fuel just to power the boom,” Morris says.
Fuel savings have also resulted from the purchase of Red Dye diesel fuel, with $100,000 annually being passed back to customers, according to Morris. The county’s focus on fuel didn’t stop there. It has also added revenue from other sources while striving for cleaner fuel.
“We operate four fuel sites, and other cities and elected county agencies, such as the Sheriff, State Patrol, and fire districts, have come to us and asked if they could purchase our fuel,” Morris says. “They like our convenience, locations, pricing, constant reliable fuel supply, and access for contingency operations.
“We have added additional filtering at our four fuel sites to ensure contaminants do not enter the newer engines that have closer tolerances in the fuel systems,” Morris says. “We added additional fuel filters to each of our dispensers with a water restrictor in the filter to prevent water from being pumped into an asset. The primary filters are 30 microns, and the secondary filter at each dispenser is a 10 micron.”
Morris is carrying this practice out to work sites. “We are currently in the middle of a campaign to install these filters in our 50- to 100-gallon auxiliary tanks mounted in truck beds, which are used to fuel our field equipment.”