Every now and then, step back and take stock of your inventory control and management performance.
Conventional and everyday things often can become inventory control concerns.
Undetected headaches can become big headaches. A practical scrutiny of your parts department operations and inventory control procedures can avert problems.
Answer the following questions I've developed to assist in a quick evaluation of operation and inventory control practices.
Answers will help you quickly assess your parts department's performance standards and help identify where procedures may be non-existent or performance might be open for improvement.
The questions are not quick solutions. Rather they are to initiate awareness about aspects of your parts operation you might unconsciously be overlooking.
Here they are:
- Do all parts department employees completely understand their responsibilities relative to the use of the inventory-control system?
- Are all responsible parts department employees adequately trained in the operation of the inventory-control system?
- Do all relevant parts department employees understand the basic concept of inventory control and the theory behind it?
- Do employees fully understand their responsibilities to report errors and discrepancies?
- Are inventory-control system errors corrected as soon as they are detected?
- Are the inventory-control tools (terminals, back-up inventory pads, etc.) conveniently and productively located within the department?
- Are there sufficient inventory-control tools to efficiently support the number of parts employees using them and adequately sustain the department's volume of business?
- Are suggested stock orders prepared by the inventory-control system without excessive changes or editing?
- Are management reports reviewed and acted upon at regular intervals?
- Does the parts department have a documented procedure for special-order handling?
- Are customers promptly notified upon receipt of their special orders?
- Are unclaimed or unsold special orders controlled and reviewed on a routine basis (preferably daily) to avoid accumulation?
- Do all relevant parts department employees understand the importance of lost sale recording and the effects of lost sales on inventory control?
- Are lost sales recorded?
- Are all emergency purchases recorded and sold through the inventory control system?
- Are moderately slow moving parts, very slow moving parts, and parts with no movement reviewed regularly?
- Is excess inventory reviewed regularly?
- Are return applications for all eligible parts made in a timely manner, according to manufacturer procedure, to avoid build up of obsolescence or missed return opportunities?
- Is full advantage taken of the obsolescence-return program offered by your manufacturer?
- Are inventory records updated regularly to reflect current and accurate bin locations, number changes and other pertinent manufacturer parts master record data?
- Does the inventory-control system provide the desired results?
- Are inventory-control system guides and setups (such as days' supply, phase-in and phase-out) evaluated periodically and modified as required?
- Is there periodic communication with inventory-control system representatives and vehicle manufacturer representatives to review system performance?
- Is all necessary inventory-control system training for all relevant parts department employees up to date?
If you answer “no” or “I don't know” to any of the questions listed here, then immediately investigate that aspect of the operation and take necessary steps to correct any deficiencies.
Gary Naples is a parts consultant to dealers and manufacturers. He's authored two books on parts management. He's at 570-824-1528/Gss83@aol.com.