There are a few signs of a poorly run parts inventory. The most obvious is one where you walk through and there is no organization and parts are not put away. But there are other cues – on paper. One cue: Negative On-Hand Quantities. If there are more than “a few” negative on-hand bin quantities, …
Prepaid Special Order parts has to be a Policy in the Parts Department. We’ll admit, there is push back from staff when implementing. But, the bigger problem isn’t the push back from staff. The bigger problem is sitting on real money, that doesn’t make money, and sits. The goal is to make money make money. …
This is what happens when we have to special order parts. How many of these special order parts that we order overnight are actually Active Parts Inventory that you should have had anyway? The job of the Parts Manager is to ensure this happens very little. If you are ordering more than a few …
Active inventory is the lifeblood of sales for parts department, for service department, and for your wholesale customers. It is the Active parts inventory you sell that generate profit. Yet, we see many dealers have upwards of 20% of their Active inventory not in stock, consistently. Don’t be scared to purchase parts which you sell, …
Depending on your dealership and your customer base, some Parts Manager’s opt to handle “phase-in” body shop parts inventory different than other active parts inventory. This is fine, especially if you are with an OEM who doesn’t take Body Parts back, but you still need to stock parts which have sales. You are weighing the …
We see some Parts Managers who are scared to order parts they sell as big parts, or they haven’t seen enough activity yet. Sometimes even if the value is “high” they won’t order parts for inventory. All of these reasons are usually backed by loose definitions. This is not how you manage an inventory. …
Do you want to know what your real fill rate is? Have someone sit with a paper at the parts back counter for ½ a day and count what shop orders get filled and which don’t. I assure you that no matter what the results are, you’ll be surprised (filters and oil don’t count). Did …
It’s common theme that Parts Managers “listen” to know when an Active parts item is now out of stock. Parts people will say something “if” it’s very obvious; a practice you should never count on. Some PM’s will run an “Out Of Stock” or “Stock Out” report, reporting parts that are Active Inventory but now …
In our practice, we see that many dealers don’t have upwards of 20% of their Active Inventory in stock, at any one time. Some of this might be because they are in between stock orders, but a portion of these parts are parts which the Parts Manager opts out to order entirely – even on …
How do you structure your wholesale parts pricing? The market dictates your pricing and cost to do business. Don’t get tied up thinking you need to do business with everyone. If you’re set up to handle high volume/low margin wholesale business, you’re aware of the financial impact & can still be profitable. If you aren’t, …