Best Practices on Parts and Accessories Inventories

Best Practices on Parts and Accessories Inventories
Date Created: 2009-03-26

Here are some best practices that can help your parts department improve efficiency and profits:

Test & Monitor Demands

Mike Nicholes, author of Advanced Inventory Management, advises strict monitoring of demand for parts through understanding and using computer system reports.  Having computers to place parts orders and pull parts numbers is one thing, but using the wealth of data through reports to manage wisely is something else.

Keeping an accurate handle on inventory turns in the parts department is critical to making sure you have the right parts on hand, eliminating overstocking items, and avoiding a costly build up of obsolete parts.   “If you don’t test demand for parts, you’re guessing . . . and guessing wastes money,” Nicholes said.

RV distributors are helping to take the guesswork out of parts ordering through custom computer programs that allow managers to replenish fast moving items, and “cycle out” slower moving parts.

Track “Lost Sales”

It takes discipline, but Nicholes says it’s a good idea to record every “lost sale” due to the part being out of stock.  “Post all of them . . . all the time, by everyone who deals with parts customers,” says Nicoles.  “A good lost sale tracking system helps tell you what to stock.”

Again, the penalty for relying on anecdotal “lost sales” input from employees is that you are speculating, which can lead to some expensive mistakes.

Track “Emergency Purchases ”

A measurement that can help parts department efficiency is tracking “emergency purchases.”  Nicholes says emergency purchases of the same item over and over produce less profit, tie up technicians, and reduce overall shop efficiency.