In three years, Krapf Bus Companies has reduced its parts inventory by 35 percent with no impact on operations while at the same time increasing warranty capture to more than $10,000 a month.
Cheryl Bowers-Torres, who joined Krapf in November of 2008, helped the company achieve these results without a major investment in new technology. Instead, she drew on previously untapped capabilities in the Dossier maintenance software the company had been using for more than a decade.
According to Fleet Manager Brent Cumens, Krapf first implemented the fleet maintenance software from Arsenault Associates in 2001.
“You track PMs and build history, and about the time you think you’re using the software to its full advantage, someone like Cheryl comes along and takes it to a whole ‘nother level,” he said.
“I was hired as a supply chain manager, the procurement position, and I was to look at inventory,” said Bowers-Torres, Krapf’s director of procument and technology.
“All of our locations were purchasing from the local parts chain dealer,” Cumens said. “We paid different prices at different locations, even sometimes from the same vendor. We had automatic replenishment. The salesman would come in and say ‘I think you need ten of these oil filters this month.'”
The result was too much inventory.
“Now we have history. Now we have reviews on a consistent basis to insure that we are buying the stuff we need and that we are retiring product as we retire buses,” she said.
“When we procure a part, that’s when it’s created in the database if it hasn’t previously been utilized. We cut a purchase order, we send it via email to our supplier right out of Dossier so there’s no faxing, there’s no paper. The part comes in. We receive it, we barcode it and we put it away,” Bowers-Torres explained.
All Krapf shops now have network visibility into each others’ parts inventory.
“We share information and we transfer parts actively between locations,” Bowers-Torres said. “We’ve been able to reduce our inventory by about 35 percent. We keep our high-velocity items in stock so we’re not without bread-and-butter items,” she said.
At the same time, Krapf implemented a warranty recovery program.
“We went from no formalized warranty process to a process that allows us to measure on a monthly basis what we are recovering in parts and in labor,” said Cumens.
According to Bowers-Torres, existing warranty information was loaded into the software. Then when a new unit joined the fleet, each warrantable element was entered. Krapf began running a warranty report.
“The report tells us by business partner all of the transactions that occurred in-house that were warrant-able,” she said.
“If there’s a warranty for the body and a warranty for the chassis or whatever it may be, we set those up. We enter the time or the mileage parameters. When those items are entered into a work order, they show up in the warranty report,” Bowers-Torres explained.
Warranty replacement parts are entered as well.
“We track those warranty items internally to make sure the relevant parts go back to the suppliers. Then we track our credit,” he said.
Cumens said that Krapf is tracking from $10,000 to $15,000 a month in warranty recovery.
Krapf is a 69-year-old contract provider of school, route, and charter transportation based in Glenmoore, Pa., with a fleet of 2,800 vehicles at 16 locations in five Mid-Atlantic and Midwest states. Of that number, 2,550 are school vehicles; 1,285 are 48-72 passenger buses, 815 are 20-36 passenger buses, and 450 are for 10 or fewer passengers. In addition, Krapf operates 32 motor coaches, 150 public and/or senior buses, and 50 support vehicles.
