Recommended Best Practices for School Bus Parts Inventory Management

September 9, 2024

Even the smallest school transportation department that maintains its own vehicles as well as school district or company-owned equipment in-house must go through a considerable amount of operating cost to inventory the parts, lubricants and supplies necessary to keep the fleet in the safest operating condition.

In fact, a survey conducted by STN magazine a few years ago showed that annual expenditures for school bus fleet parts and shop supplies represent approximately half of the total vehicle maintenance costs for the average fleet. To ensure that school bus technicians always have the items they need on hand and that maintenance budgets are well spent, it’s critical to monitor and re-stock inventory of parts and supplies mindfully
by analyzing maintenance parts and supplies inventory best practices.

By effectively managing inventory, transportation leaders can have the right products in the right quantity on hand and avoid products being out of stock and operating funds being tied up in excess stock. Inventory is cash on the shelf and should be kept at a level not to exceed 10 percent of the annual maintenance parts cost, ideally keeping parts fresh by turning over inventory 10 times a year.

Inventory management is an operational part of the school bus maintenance facility that aims to always have the right product in the right quantity and at the right time. When done effectively, fleet operators reduce the costs of carrying excess inventory while maximizing vehicle uptime. Good inventory management can help track inventory in real time to streamline this process. By analyzing how the organization has historically used maintenance-related items, leaders can identify patterns that can update purchasing strategies moving forward. For instance, if you observe that your fleet installs batteries at an increased rate during the winter, get ahead of that need by stocking replacement batteries when the weather is still warm. Purchasing parts in anticipation of future needs is proactive maintenance inventory management.

Reliably having a well-stocked supply of parts, tires, oil and lubes on hand is an essential part of performing in-house maintenance. By following best practices and keeping a close eye on specific systems of measurement, fleets can optimize how their inventories are managed and restocked.

If you are looking to enhance the way your district/company manages inventory, try the following:

Leverage your vehicle maintenance recording system to add inventory management software to track stock levels automatically and to record part information for improved organization. Develop standardized storage procedures and reinforce those methods when training personnel.
Periodically review your inventory levels to ensure maintenance needs are being met to reduce downtime.
Review historical part utilization to stock high-demand parts and minimize overspending on rarely needed parts.
Log or record parts under warranty. This can be accomplished with paper documents, spreadsheets or inventory management software.
Whenever a part fails, fleet personnel can check their records to see if that part has an active warranty or not. Of course, this approach only works if warranty details are accurate and up to date, so whether you’re working with an inventory log or specialized software, make sure to audit your records on occasion to ensure data quality.
Use the FIFO approach (first in, first out). Parts and supplies should be used for repairs in the same chronological order as they were purchased or created. This is especially important for batteries, tires and lubes. The best way to apply FIFO in a parts and supply storeroom is to add new items from the back so the older products are at the front.
Identify low-turn stock. If you have stock that hasn’t been used at all in the last six to 12 months, it’s probably time to stop stocking that item. You might also consider different strategies for getting rid of that stock like a special discount or a dealer/distributor “buy-back” promotion since excess stock wastes both your space and money.
Establish relationships with preferred part vendors that offer inventory obsolescence buy-back/credit programs.
Reliably having a well-stocked supply of parts, tires, oil and lubes on hand is an essential part of performing in-house maintenance.
Know the amount of inventory for all items you have at a given time. If you have a large fleet and a lot of inventory, you might need one person who is responsible for it. Smaller fleets can designate a shop person responsible for ordering parts and supplies, processing all purchase orders, receiving deliveries, and making sure that everything coming in matches what was ordered.

Although the supply chain impact of COVID-19 are lessening, the most recent order backlog on new school buses equipment has created a potential need for school buses operating at districts/companies to extend replacement cycles. As a result, maintenance and inventory cost has been impacted by the decision to hang on and wait for things to improve.

In addition to those challenges, we can only assume what the impact that the many zero emission mandates on the horizon will have on the fleet replacement program that districts/companies have in place, especially those based on cost models using diesel or propane-powered school bus prices and not supported by cost offset grant funds. All this may result in school bus operators making decisions to further extend the life of school bus equipment, making inventory and parts management a higher priority than ever before.

The key issue relative to improving school bus parts inventory management is that district/company management directs the effort to manage cost by setting achievable goals via planning, organizing and formulating realistic budgets to meet fleet requirements.

Editor’s Note: As reprinted in the August 2024 issue of School Transportation News.

Robert Pudlewski is STN’s technical editor and a member of the National School Transportation Association Hall of Fame in recognition of his 40-plus year career as a school bus maintenance, technology and procurement expert.