Serial Numbers - Real or Administrative

There are two ways to manage unit inventory with serial number, real or administrative. TAc on line fully support both alternatives. Some special features for using real serial numbers include:

  • Creating inventory records when assigning a unit
  • Pick list of available serial numbers
  • Serial number validation when  assigning or changing serial numbers
  • verification reports.
  • etc.

Administrative Serial Numbers

Administrative is a serial number that represents a single unit and you simply have one serial number for each unit. You then use the number as you would a real number, but there is no physical connection to the actual unit.  When you assign a administrative number to a customer your available units are reduced and assigned unit count increases.  So you have all the features of inventory control except the association with an actual physical unit does not exist. This works well with the annualized cost of a unit is low, e.g. lost or miss placed unit has small financial impact,  and that units of the same type are identical.    It is cheaper just to carry extra inventory to deal with peak usage then to try to manage inventory flow via serial numbers.

The cost to implement and manage real serial numbers is significant.  The annualized cost of a portable toilet is about $5.00/month. A unit costs $1200.00 and last 10 yrs or $120.00/year or $10.00/month. After tax this is about $5.00/month.  A driver in the field costs approximately $120.00/hr loaded cost.  or about $2.00/minute  If it takes the driver 1 minutes to record and report a service 4.3 times a month or $8.60 of costs just in tracking the actual number. This cost grows significantly when considering miss reporting, serial number management and implementation and time and effort  to back office and yard personnel  in record keeping and unit management.  

It takes management  direction and enforcement to stop the practice of  "Take any unit, they are all the same!"  

Real Serial Numbers

Real serial numbers makes sense when the unit is capitalized and when any repairs or maintenance work is done,  the unit tax basis is changed and additional depreciation is available. This typically applies to larger more expensive units with limited inventory so the availability is an issue that needs to be monitored e.g. like multi-unit trainers .  These units can cost $10,000  to $20,000 and need to be maintained and tracked.  In addition the typical usage period is longer and requires significantly longer time and effort to install, prepare, clean and manage. The 1 minutes it takes to record the serial number is only a small fraction of the total cost, making tracking the unit good business sense. 

Some other benefits of using real serial numbers are:

  • Imparts a sense of respect for equipment to employees thus lower repair and damage events
  • Ability to say to a customer what is the serial number of the unit that is not working making location and repair seem easier
  • Recovery on stolen units.

Overall we recommend using administrative serial numbers for general unit population and real serial numbers for high cost, lower inventory units e.g. trailers