Situation
A midwest-based crane company in business for nearly a decade had a paper process for managing all of their maintenance and inventory. They had one team member in charge of managing all parts purchases. There was no oversight or approval of purchases because the tracking and management on paper was already a time-consuming and tedious process without adding more steps. The inventory manager recorded purchase receipts, but they didn’t have a system to link the purchases to work orders or specific assets. The company realized that in order to gain an understanding of their total asset costs including maintenance, repair, and parts costs, they would need a better process.
Action Items
The crane company implemented Redlist’s Enterprise Asset Management (EAM) software to improve its workflow and reporting. They started by digitizing all of their maintenance and inventory tracking. This included attaching receipt submissions to the digital work orders so parts costs would be automatically associated with an asset and a specific maintenance issue. Within two years of using Redlist, the company had sufficient data to track its asset, maintenance, and inventory costs. The inventory manager analyzed the data and noticed that their parts spend was higher than expected. They reviewed all purchase orders and receipt submissions for parts and discovered some considerable discrepancies. The main issue they identified was that there were parts being added to work orders that were not compatible with the asset the work order was associated with.
Impact
Thanks to the data and easy reporting provided by Redlist, the inventory manager was able to review in detail two years’ worth of work orders, purchase orders, and receipts. They found that the employee in charge of purchasing parts was buying parts for their personal vehicle and buying many other parts for resale. In total, this employee fraudulently charged $131,000 of parts to different company-owned assets over two years. The company was able to submit the detailed records from their Redlist account to their insurance company and fully recovered the losses associated with the fraudulent charges. The employee was let go, of course, and they have had no issues with theft or overspending on parts since. The company now has the peace of mind that Redlist’s real-time data and auto-populated reports will ensure this won’t happen again. Book an EAM software demo today!
