For companies that either do their own maintenance, or have a fleet of equipment, onsite parts inventory can be a good solution to some common problems. Onsite inventories can also lead to more problems, so it can be a bad idea as well. Let’s take a quick look at this potential solution.
Agreement Issues to Review
· Both parties need to clearly understand the terms.
· When does the sale occur?
· Time limit (must be purchased or returned within specified period).
· What is the freight policy?
· What is the return policy?
· Who holds responsibility for damage or loss while in customer’s possession?
· What are the Insurance implications?
· Exactly how and when is data exchanged? What data is exchanged?
· How are miscellaneous transactions processed?
o Cycle count adjustments,
o Customer Returns (does a return initiate a credit from the supplier?)