Inventory Model

Ryder has maintained the following approach to inventory management that is practiced in more than 700 Ryder maintenance facilities resulting in substantially reduced costs of parts acquisition.

Establish Inventory Value

Careful consideration is given to the following items when establishing the amount of inventory to maintain while targeting a total dollar amount that does not exceed the average charge out of parts from inventory in a 90-day period: · Mix of fleet and parts · Hours of operation and the ability to access parts after hours · Size of the work force whose productivity may be jeopardized by waiting for parts · Customers dissatisfaction as a result of delays or Ryder's inability to complete necessary repairs.

Establish Appropriate Min/Max Levels

In an effort to establish the appropriate stocking levels that optimize inventory and performance consideration is given to repetitive parts necessary for the performance of preventive maintenance and the proximity and lead-time to the ordering facility. In addition, order history is maintained to adjust levels on a quarterly basis. Roles and responsibilities are also defined and documented to ensure consistent implementation of the agreed upon inventory model.

Planning Order Cycles

Weekly order cycles are developed to minimize reaction purchases leading to costly mistakes and to reduce convenience purchases from multiple supply points at higher prices. Weekly purchases have been found to reduce transactions affecting shop productivity and reduce costs associated with multiple handling and deliveries.

Opportunistic Purchases/Obsolescence

Maintenance facilities monitor overstock specials in an effort to capture savings through bulk purchases at reduced costs. Maintenance facilities also review and co-ordinate the returns of slow moving inventory at 6-month intervals.