{"id":61880,"date":"2023-06-05T17:48:43","date_gmt":"2023-06-05T17:48:43","guid":{"rendered":"https:\/\/www.revolutionparts.com\/?p=61880"},"modified":"2023-06-13T04:32:48","modified_gmt":"2023-06-13T04:32:48","slug":"top-inventory-management-strategies-for-your-parts-department-to-maximize-profits","status":"publish","type":"post","link":"https:\/\/www.revolutionparts.com\/blog\/top-inventory-management-strategies-for-your-parts-department-to-maximize-profits\/","title":{"rendered":"Inventory Management Strategies to Boost Your Parts Department"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” header_2_font_size=”34px” global_colors_info=”{}”]Inventory mismanagement can be one of the most frustrating challenges in the parts department. When your auto parts inventory is backed up, sparse, or just plain wrong, that means more wait times for your customers. It takes longer to get parts ordered in time for scheduled services, and back-ordered parts can take weeks to get to the dealership. By then, you\u2019ve lost that customer.\u00a0<\/span><\/p>\n

Knowing the cause of your inventory problems is the first step toward solving them. The more difficult step is implementing the right processes to fix them. <\/span>
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The Most Common Inventory Hurdles<\/span><\/h2>\n

What do most parts managers cite as the dealership’s biggest inventory issues? Overstock of slow-selling parts, low to no stock of fast-selling parts, missing inventory, and mistagged inventory are the most common <\/span>inventory management<\/span><\/a> challenges to overcome.<\/span>
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Overstocked & Obsolete Parts<\/span><\/h3>\n

Nothing hurts your bottom line more than an abundance of parts that don\u2019t sell fast. Overstocked inventory can lead to a variety of problems behind the parts counter.<\/span><\/p>\n

First, it takes up space on the parts shelves that could be used to house more popular parts.\u00a0<\/span><\/p>\n

Second, it quickly contributes to your obsolescence rate, the percentage of <\/span>aging parts<\/span><\/a> that don\u2019t get sold.\u00a0<\/span><\/p>\n

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Third, it ties up cash that could be spent elsewhere to help drive revenue. Having dead stock that can’t be moved quickly is no help to you.<\/span><\/p>\n

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Understocked Parts<\/span><\/h3>\n

While overstocked parts hurt your bottom line, understocked parts hurt your customer retention. Without enough of the right parts on the shelves, ordering the parts your customers need takes longer. This drives customers away from your dealership to your competitors.\u00a0<\/span><\/p>\n

Understocked parts can also make it difficult to accurately predict what parts will need to be ordered in future sales cycles, as there\u2019s less product for you to pull data from. <\/span><\/p>\n

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Missing & Mistagged Inventory<\/span><\/h3>\n

The biggest headache for any parts department employee is missing and\/or mistagged inventory. It\u2019s one thing to have too much or too little inventory; it\u2019s another thing to have inventory that doesn\u2019t match your system data.\u00a0<\/span><\/p>\n

When inventory gets mistagged, your parts department scrambles to find it. It can also result in labeling those parts as missing, leading to over ordering parts, and the vicious cycle starts all over again.<\/span><\/p>\n

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Tips for Solving Inventory Challenges<\/span><\/h2>\n

If your parts department is experiencing one or all of these inventory issues, how do you go about fixing them? <\/span><\/p>\n

[\/et_pb_text][et_pb_blurb title=”Clean Up Your Tagging Processes” use_icon=”on” font_icon=”||fa||900″ icon_placement=”left” image_icon_width=”75px” content_max_width=”760px” _builder_version=”4.21.0″ _module_preset=”default” header_font=”|800|||||||” header_font_size=”26px” custom_margin=”43px||43px||false|false” animation=”off” custom_css_blurb_image=”padding-top:10px;||width:140px;||max-width:140px;” border_radii_image=”on|10px|10px|10px|10px” border_color_all_image=”#DB3126″ global_colors_info=”{}”]One of the best things you can do to help reduce inventory errors in the parts department is to clean up your tagging system.\u00a0<\/span><\/p>\n

However you or your DMS system tags parts, you need to be sure those tagging structures are followed properly. If they\u2019re not, your inventory will be in shambles when it comes time to look up a part for your customers.\u00a0<\/span><\/p>\n

Tag and track inventory with an effective inventory management software or related system to help you manage this problem easily.<\/span>
\n[\/et_pb_blurb][et_pb_blurb title=”Retake Stock” use_icon=”on” font_icon=”||fa||900″ icon_placement=”left” image_icon_width=”75px” content_max_width=”760px” _builder_version=”4.21.0″ _module_preset=”default” header_font=”|800|||||||” header_font_size=”26px” custom_margin=”43px||43px||false|false” animation=”off” custom_css_blurb_image=”padding-top:10px;||width:140px;||max-width:140px;” border_radii_image=”on|10px|10px|10px|10px” border_color_all_image=”#DB3126″ global_colors_info=”{}”]While it can be a hassle when your parts department is especially busy, it\u2019s important to take and retake stock of what you currently have. Stock auditing is crucial to keeping the parts department running smoothly.<\/span><\/p>\n

As a general rule of thumb, running through your inventory at the end of every week (or the end of every two weeks) is a good idea.<\/span><\/p>\n

That\u2019ll help you get a quick snapshot of what you have and need. You can then easily update your system with accurate information about your inventory levels should there be any gaps. <\/span>
\n[\/et_pb_blurb][et_pb_blurb title=”Forecast What You Can” use_icon=”on” font_icon=”||fa||900″ icon_placement=”left” image_icon_width=”75px” content_max_width=”760px” _builder_version=”4.21.0″ _module_preset=”default” header_font=”|800|||||||” header_font_size=”26px” custom_margin=”43px||43px||false|false” animation=”off” custom_css_blurb_image=”padding-top:10px;||width:140px;||max-width:140px;” border_radii_image=”on|10px|10px|10px|10px” border_color_all_image=”#DB3126″ global_colors_info=”{}”]Making data-driven decisions is key to keeping your inventory under control. What parts sell like hotcakes? What parts barely sell? When you can effectively forecast the inventory you need to acquire, you can help alleviate the over-ordering of parts that pile up on the shelves.\u00a0<\/span><\/p>\n

To properly forecast your future inventory needs, you need to identify:<\/b><\/p>\n