Truck inventory best practices?

[Coppersmith]

I'm trying to formalize a system for inventorying service trucks with two purposes in mind: protect against theft or loss of inventory and tools; and keep the truck properly stocked.

I've seen some previous discussions of this and I'm really just looking for best practices based on what those here are doing, experiencing, or have researched. I'm trying to strike a balance between the cost of monitoring, the cost of losses, and the cost of not having a needed item on the truck. I'm also trying to decide what action (if any) I should take if I see take a truck's losses are significantly higher than average.

I think tool inventory is straight forward. There are a small number of expensive tools on the truck. I expect the tech to not steal or lose them. Tools will break and I expect the tech to tell me so they can be fixed or replaced. Every once in a while (how often?) we should count the tools and verify they are all present and in working order.

Bits, blades, and other expendables are not cheap and there are a small number on the truck. At minimum these need to be counted just to make sure they are in stock for when needed. Should they be monitored for loss or waste? I know electricians who use a fresh drill bit every day and throw away the partially used (but still serviceable) ones. Is it worth it to track that?

Material inventory is the hardest question. In the past I have just filled a service truck with inventory (mostly low value stuff, but it adds up) and sent a technician out into the field. If we have a big planned job like a service change, I will buy all the material and have it available for the tech to pickup at the shop. I also give the tech a credit card to buy whatever they need for their jobs. I monitor the purchases on the credit card basically looking for something odd that stands out.

I think we need to do a physical count (how often?) to make sure needed items are on the truck. I'm not sure it's cost effective to be concerned if some amount (how much?) goes missing. Perhaps we need to just worry about protecting the expensive items ($5 or more?).

Counting the truck is expensive in terms of labor hours. Somebody with a clipboard was to spend a couple of hours counting and entering data. Techs are notoriously bad at keeping track of items removed from and added to the truck. I could give them a barcode scanner and barcode everything but I would not trust the results. I have asked techs to keep a shopping list of items they are low on and it doesn't work well.

Perhaps the answer is to have a spare fully stocked truck available. On the designated inventory day, the tech brings his truck to the shop and swaps his truck for the spare. A lower cost employee can then spend whatever time is needed to fully inventory the truck head to toe, refill it, clean it, and get it ready for the next swap. A report can be generated detailing the inventory condition of the truck and a decision can be made if any disciplinary action needs to be performed.

As always, I'm looking forward to reading what the giant collective brain of this group has to say.

ETA: I had one tech who used my truck on weekends to do side jobs. I'm not sure if he was using my materials. I think he was using my tools and expendables. I had to make a surprise visit to his house to verify my suspicion. When the truck was not there on a non-work day, the truth came out. GPS tracking might have solved this.

ETA2: I had one tech who had a crash in the service truck and didn't tell me. I had to notice the damage on my own. He denied any knowledge of the damage. Truck swapping could check for this also.

 

[ramsy]

My Union shop days recalls JW's required to bring their own hand tools, but could certainly destroy more expensive shop equipment like dropping porta-bands from several stories, disappear benders, smash trucks, and such.

If not made mandatory, I'd provide incentive compensation for schmucks to use their own POV & insurance at work.

If your a shop owner, I'd say best practice is special education with signed legal contract that makes schmucks responsible for equipment loss above & beyond established norms set forth during training, and I'd publish poster-size examples of the Village Idiots who tested that policy.

 

[ramsy]

Perhaps the best practice of my 1-man shop is running with no inventory or truck stock.

Except for common incidentals, the phone screen determines what is picked up & delivered en-route. Special orders, not in stock today, are rarely part of my business, but when presented are easily managed by scheduling out, or letting clients pickup, or order themselves from Amazon, etc..

If I can manage the logistics of inventory pickup en-rout, and returns, so would any schmucks I hired.

 

[Chamuit]

I am having to figure this problem out myself for another division in the company I work for.

The techs have and use their own tools. So monitoring tool inventory is not going to be a problem.

I am somewhat unfamiliar with their product inventory but, with the help of the manager of that department, I think we will start with monitoring the basic parts inventory first, then move up. Hopefully, we can get to a digital product of some sort where they check off what they use on each job or call and can be restocked from that.

 

[ActionDave]

So you are considering spending tens of thousands of dollars on extra employees and trucks to keep track of tens of dollars worth of inventory?

I get it about the guy doing side work on the weekends and using your truck, that needs to stop, but everything else sounds like tripping over a dollar to pick up a wire nut.

 

[Coppersmith]

So you are considering spending tens of thousands of dollars on extra employees and trucks to keep track of tens of dollars worth of inventory?

More like spending $100's in labor to restock the truck and protect $1000's in tools and expensive parts. It costs $50-100 every time an emergency trip is made to the store for something that should be on the truck (including wirenuts).

 

[sameguy]

All trucks get stocked the same, when refill is needed if from shop stock a shop requ. Is filled infor stock removed for refill, any from elec. supply house needs paper work returned the day it was picked.
Now you need a stockmen at the shop, could do prefab too, pull orders for crews, run needed stuff to sites, also could be old guy part time.

 

[brantmacga]

For inventory, an easy thing to do is have all materials listed out on the back of the office copy of the invoice; ours have lines printed on the back for this. Good for inventory, good for job-costing.

This would be for service calls like replacing or adding devices, new circuits, etc.... The typical service call doesn’t use a lot of inventory.

For large service jobs, like the service change you mentioned, buy all the material for that job on a new order.

Fasteners, connectors, etc, I’ve always just had people keep an eye on their own stock and re-supply when needed. When job-costing on the back of the invoice, just use “miscellaneous” for these items. Your tech should have an idea of what a screw and a wirenut costs, and be able to assign a close dollar amount for them.

I think it’s more of a numbers game really; watch the material bills vs. labor and revenue and see if your margins are dipping. That’s a number you’ll have to figure out based on your own expenses. I’ve never really cared to track down to the penny where every dollar goes as long as the percentages are where they need to be.

As for tools; battery-operated tools on the service truck for me last 3-1/2 to 4 years; on the construction trucks it’s every two years. We usually have two of each sitting on the shelf and rotate them in when tools go off for repair.

Our largest local EC started a tool leasing program a couple of years ago with Hilti; every employee has to lease their own tools, and it comes directly out of their paycheck. Lots of complaints, but people aren’t leaving as far as I can tell. They also have a couple hundred employees so I’m sure it’s a lot more difficult and expensive for them to keep every truck stocked with tools.




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[nickelec]

That's ridiculous If my boss (when I had a boss) ever told me I needed to supply my own power tools I'd tell him I quit. When I did work for someone I always had my own screwgun but that's just because I wanted my own stuff. But every contractor I ever worked for always supplied power tools.

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[JoeyD74]

That's ridiculous If my boss (when I had a boss) ever told me I needed to supply my own power tools I'd tell him I quit. When I did work for someone I always had my own screwgun but that's just because I wanted my own stuff. But every contractor I ever worked for always supplied power tools.

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Id supply the van if I was getting paid enough from an employer. The tools , same deal as long as I’m making the wage I determined to cover everything.

 

[sameguy]

JD74, one word Liability.
If your going to do all that I would go 1099 and write a contract with my new "partner".

 

[Coppersmith]

Id supply the van if I was getting paid enough from an employer.

Before I became an electrician, I worked for a contractor to Airborne Express and then DHL, both major package delivery companies. The deal was we supplied our own vans. The contractor required the vans to be a certain minimum size, be mechanically fit, look fairly good, and for us to pay to have them painted and stickered with the company colors and logos. We were required to buy a particular insurance policy which protected the company from liability. We were responsible for all maintenance and fuel. If the van broke down we were required to rent a replacement while it was getting fixed.

If that doesn't sound crazy. it should. At first blush, the compensation sounded good. I worked with 30 guys who thought this was a good deal. I thought I was making about $12/hr after expenses. I probably wasn't taking all the real costs into account. If I were to recalculate it today, I suspect it would come out about minimum wage. The people who took this deal were all low-skilled (including me). Some of them had been to prison which limited their options. This seemed like a good deal only because there were few places to get a better one. Electricians are skilled labor so I'm not sure this deal would be as attractive to many.

It was a great deal for the employer but a poor one for the employees. Personally, my moral code does not allow me to screw my employees so I could never do this. I'm sure there are companies that do. I'm poorer cash-wise for it but richer in other ways.

 

[ramsy]

JD74, one word Liability.
If your going to do all that I would go 1099 and write a contract with my new "partner".

Using independent contractors, or partners has some issues:

Even without licensing, GL policies, or Workers-Comp/insurances, private owners of strip mall shops, along with renters, and residential property is a significant market that may lawfully affect repairs themselves. Such improvements may not always require licensing, nor always be compliant, but 1099's tend to expose it to the world.

A 1099 to Joe contractor tells Insurance adjusters who find hack jobs, or the 1099, they can demand proof of licensing/workers comp./insurances, and void claims that violate insurance policy/building code/license laws.

Your partner's business miles documented on Invoices & receipts will show % Qualifying Business Use, per IRS Form 4562 Part V, before Standard Mileage Rates for Business & Medical are claimed, which proves independent contractor status, but the need for commercial-liability insurance may follow a need for their own license, bonding, GL policy, Workers Comp, etc.. Give employees all that & they don't need you, or may take your customers with them when they leave.

 

[cowboyjwc]

You could just stock the truck the same, IE 10 receptacles, 10 switches, 10 1/2 EMT connectors, (you get the point) then you keep the stock in the shop. I'm not sure if they come to the shop every day, but the truck should always have that count on it. So if Monday you send them on a service call to replace a breaker, but on Tuesday they need to restock 5 receptacles, then you know something's going on. So basically they would "buy" the material from the shop filling out a form on what they needed to restock the truck.

Make sense?

 

[kwired]

You could just stock the truck the same, IE 10 receptacles, 10 switches, 10 1/2 EMT connectors, (you get the point) then you keep the stock in the shop. I'm not sure if they come to the shop every day, but the truck should always have that count on it. So if Monday you send them on a service call to replace a breaker, but on Tuesday they need to restock 5 receptacles, then you know something's going on. So basically they would "buy" the material from the shop filling out a form on what they needed to restock the truck.

Make sense?

To an extent. Maybe they convinced customer that those 5 receptacles needed replaced, an "upsell", which is good for the bottom line. Sales invoice/receipt should reflect this though.

 

[cowboyjwc]

To an extent. Maybe they convinced customer that those 5 receptacles needed replaced, an "upsell", which is good for the bottom line. Sales invoice/receipt should reflect this though.

Correct

 

[petersonra]

I think you should probably find some middle ground between trying to account for every penny and letting a lot of money out the door.

Some things should probably be expensed so they don't have to be counted and others need to be inventoried periodically, preferable not by the guy running the truck.

I would tend to expense things like small gauge wire, fasteners, and wire nuts. As long as there is not a crazy number of them being used to restock, I would not worry much about them.

I also think it is probably best to have the individual techs go to home depot or wherever you can get the best deal and buy the stuff themselves on your credit card rather than trying to keep a lot of stock in the shop.

In the end, you trust these guys with your most valuable asset - your customers. You can probably trust them with a few grand worth of electrical parts.

As far as tools go, hand tools should be on them. power tools on you.

Incidentally, bar coding your stock and the tools you supply can make inventory much quicker and more accurate.

 

[JoeyD74]

JD74, one word Liability.
If your going to do all that I would go 1099 and write a contract with my new "partner".

‘I’d have my lawyer look my deal over because of liability, your right about that.

 

[JoeyD74]

Before I became an electrician, I worked for a contractor to Airborne Express and then DHL, both major package delivery companies. The deal was we supplied our own vans. The contractor required the vans to be a certain minimum size, be mechanically fit, look fairly good, and for us to pay to have them painted and stickered with the company colors and logos. We were required to buy a particular insurance policy which protected the company from liability. We were responsible for all maintenance and fuel. If the van broke down we were required to rent a replacement while it was getting fixed.

If that doesn't sound crazy. it should. At first blush, the compensation sounded good. I worked with 30 guys who thought this was a good deal. I thought I was making about $12/hr after expenses. I probably wasn't taking all the real costs into account. If I were to recalculate it today, I suspect it would come out about minimum wage. The people who took this deal were all low-skilled (including me). Some of them had been to prison which limited their options. This seemed like a good deal only because there were few places to get a better one. Electricians are skilled labor so I'm not sure this deal would be as attractive to many.

It was a great deal for the employer but a poor one for the employees. Personally, my moral code does not allow me to screw my employees so I could never do this. I'm sure there are companies that do. I'm poorer cash-wise for it but richer in other ways.

It all comes down to your costs and profit you want out of it. As a younger guy you’d probably miss the true costs like you said and end up making shit money.

 

[lakecitieselectric]

I'm trying to formalize a system for inventorying service trucks with two purposes in mind: protect against theft or loss of inventory and tools; and keep the truck properly stocked.

I've seen some previous discussions of this and I'm really just looking for best practices based on what those here are doing, experiencing, or have researched. I'm trying to strike a balance between the cost of monitoring, the cost of losses, and the cost of not having a needed item on the truck. I'm also trying to decide what action (if any) I should take if I see take a truck's losses are significantly higher than average.

I think tool inventory is straight forward. There are a small number of expensive tools on the truck. I expect the tech to not steal or lose them. Tools will break and I expect the tech to tell me so they can be fixed or replaced. Every once in a while (how often?) we should count the tools and verify they are all present and in working order.

Bits, blades, and other expendables are not cheap and there are a small number on the truck. At minimum these need to be counted just to make sure they are in stock for when needed. Should they be monitored for loss or waste? I know electricians who use a fresh drill bit every day and throw away the partially used (but still serviceable) ones. Is it worth it to track that?

Material inventory is the hardest question. In the past I have just filled a service truck with inventory (mostly low value stuff, but it adds up) and sent a technician out into the field. If we have a big planned job like a service change, I will buy all the material and have it available for the tech to pickup at the shop. I also give the tech a credit card to buy whatever they need for their jobs. I monitor the purchases on the credit card basically looking for something odd that stands out.

I think we need to do a physical count (how often?) to make sure needed items are on the truck. I'm not sure it's cost effective to be concerned if some amount (how much?) goes missing. Perhaps we need to just worry about protecting the expensive items ($5 or more?).

Counting the truck is expensive in terms of labor hours. Somebody with a clipboard was to spend a couple of hours counting and entering data. Techs are notoriously bad at keeping track of items removed from and added to the truck. I could give them a barcode scanner and barcode everything but I would not trust the results. I have asked techs to keep a shopping list of items they are low on and it doesn't work well.

Perhaps the answer is to have a spare fully stocked truck available. On the designated inventory day, the tech brings his truck to the shop and swaps his truck for the spare. A lower cost employee can then spend whatever time is needed to fully inventory the truck head to toe, refill it, clean it, and get it ready for the next swap. A report can be generated detailing the inventory condition of the truck and a decision can be made if any disciplinary action needs to be performed.

As always, I'm looking forward to reading what the giant collective brain of this group has to say.

ETA: I had one tech who used my truck on weekends to do side jobs. I'm not sure if he was using my materials. I think he was using my tools and expendables. I had to make a surprise visit to his house to verify my suspicion. When the truck was not there on a non-work day, the truth came out. GPS tracking might have solved this.

ETA2: I had one tech who had a crash in the service truck and didn't tell me. I had to notice the damage on my own. He denied any knowledge of the damage. Truck swapping could check for this also.

I would like to see a list of what you guys keep on your trucks that do light commercial and residential.