Improving Spare Parts Operations for Financial Growth

Individual report on case
study
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Table of Contents
Introduction......................................................................................................................................2
Company background and current spare part operations................................................................2
Developing on working plan for the three different locations and demonstrate the improvement
of their financial status.....................................................................................................................3
Space storage and inventory............................................................................................................4
Effective inventory management.....................................................................................................4
Spare part sales performance and tracking......................................................................................5
Risk assessment in spare parts management...................................................................................6
Warehouse environment and physical controls...............................................................................6
Cost of warehousing........................................................................................................................7
Quality control management............................................................................................................8
Effective project costing..................................................................................................................8
Recommendations............................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The paper aims to review several spare parts operations that are currently used by the selected
fleet organization located in New Zealand. The firm is located in three different locations within
the country, and due to the presence of improper inventory management the company faced huge
financial losses in the past three years. Keeping this in mind, the report will discuss the working
plan that must be developed by this selected fleet organization in order to improve their spare
part department as well as to enhance their financial status in the next three consecutive years. In
addition, the paper will provide information regarding the application of spare parts
management, planning, inventory control, quality control, tracking and risk assessment
management procedure that will be useful in developing the working plan for the selected fleet
organization. Moreover, all these features will also improve the financial status of the
organization and thus, their role will be further briefly discussed in this context. Furthermore, the
paper will also provide few recommendations for improving the current spare parts for the
business practices by the management of this fleet company.
Company background and current spare part operations
A medium sized fleet organization has been chosen for this context that consists of 300
employees to execute their business. Currently, the fleet organization has presence in three
different locations along with their headquarter that is present in the market of New Zealand and
they constitute a total number of 300 registered trucks, 30 forklifts and 90 light vehicles
(Trentesaux, Knothe, Branger & Fischer, 2015). Within the main center, 75 employees are
working together with 40 trucks, ten forklifts and 20 light vehicles whereas in the first centre the
firm consists of 25, ten light vehicles, five forklifts and 20 trucks.
Apart from this, in the third and fourth location, a total number of 30 to 40 employees are
working together. In the third centre, 20 number of trucks are present along with ten light
vehicles and 20 forklifts whereas in the fourth centre ten light vehicles are present along with
five forklifts and 30 trucks. Being a medium sized company, every center operates a maintenance
workshop for repairing and for maintaining the vehicles which is conducted by the spare parts
and vehicle servicing management team. At the start of their business, the firm has improved
their market growth, but recently the senior management team faced challenges in all three
locations for their spare part operations (Sheng & Prescott, 2016). The operations have created

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financial loses for the company, and thus, it is essential for them to develop appropriate working
skills that will be beneficial for them in minimizing their financial losses for the three upcoming
years.
After reviewing the case study, it is noticed that due to the presence of inappropriate spare part
operations, the fleet organizations faced challenges in their business, which had created a
negative impact on their business’s financial statement. The major role of the inventory
management of the spare part operations are to help the firm to optimize their business goals, but
from the scenario, it is seen that the current spare part operations of this fleet organization are not
well managed by this inventory management procedure. The current spare part framework has
possessed inefficient labours, with less storage space that increases the truck breakdown and
affects the logistic department of the company to fulfil their target (Wang, Lin, Huang, Huang &
Liao, 2017).
Due to this reason, unnecessary and excess downtime is occurring in their business procedure,
which increases their inefficiencies by making the project fail and stagnant. Besides this, the
current spare parts operations of this fleet organization faced problem due to the presence of
ineffective quality control management that does not implements an effective strategy for
reducing the risks of spare parts operations. In addition, the inventory management of this
company was not able to track the sales performance, and this is considered to be the major
cause of the financial loses of the business in the last three consecutive years (Sheng & Prescott,
2017). Hence, the presence of inappropriate procedure of spare parts management creates an
issue for the fleet company, which has increased it's financial loses in the chosen New Zealand
markets.
Developing on working plan for the three different locations and demonstrate the
improvement of their financial status
The case study reveals that the selected fleet organization faced challenges in its inventory
management procedure that have affected the spare parts department of the company. Due to
this, it is essential for the fleet manager to develop a strategic working plan that should help them
to reduce the issues of their spare part departments. The working plan should be made in such a
manner that it can provide appropriate knowledge on applying the spare parts procedure
including its management role, tracking and risk management, inventory controls and quality