Why its important to implement
Parts ordered before approval risk payment for unneeded parts if claim declined. Written approval should trigger immediate ordering and job scheduling.
Immediate Ordering Protocol
As soon as parts have been approved in writing, these should be order straight away, and when confirmed in stock the job then should be scheduled into the system.
Pre-Approval Ordering Risk
If the parts are ordered before approval and the insurance company declines the claim the business may have paid for parts not needed and perhaps not able to be returned.
Business Impact
Administration costs increase from wasted time. Parts manager efficiency affected. Cashflow impacted by non-returnable parts. Approval delays affect operations.
Profit
Administration cost - time wasted if continued - more staff hired – higher admin cost.
Profit
Administration cost - Parts manager time wasted if continued – unable to take care of role.
Profit
If any approval is delayed or denied.
Profit
If parts cannot be returned cashflow affected.
action steps
Implement no-order policy until written approval, establish ordering and scheduling SOPs, enforce policy with warnings.
Parts Ordering Policy Enforcement
Strong internal warnings if policy not followed once established.
Ordering and Scheduling SOP
A SOP set in place regarding orders and scheduling.
Parts Ordering Approval Policy
Implement a no order policy until final written approval is given.
Related tasks
Milestone:
07: Optimizing Parts Management & Storage