Year-end is when most parts departments dread the AWFUL, TERRIBLE and DIRTY task of completing a parts inventory count.
When I first entered the business, inventory count was mine and several of my co-workers’ reality. We had to spend hours after closing on Friday evening getting clipboards and ever-sharp pencils and start counting. Ohh, but the GOOD news was we received free pizza and cold beverages… not a very fair trade. But nonetheless, that is what we did. Count and count and count. We started again bright and early, in some cases, not even bright, but early on Saturday morning. We would look like we were preparing for turkey hunting by wearing camo and having dirt all over our hands and faces. We would then turn in our count sheets, and in some cases, we made silly mistakes just due to being tired of counting for hours.
Was that the best choice? Perhaps not, but that is how I was taught, so I continued that pattern for years. Once I became the parts manager, I decided that we needed to improve our accuracy, and the way I thought we could do that was to do DAILY parts counts. What a change that made in our accuracy and the health of our department. I learned that my counts were better, our shelves were cleaner, more organized, and our computer accuracy went WAY UP!
If you and your department are still dreading the once-a-year annual parts inventory, I feel for you. I truly do, and I must say, you need to break that cycle and learn to break that counting down into a daily discipline. Once you do, you will find that you count your inventory more like three times a year versus the dreaded one time a year, and your inventory accuracy will be much improved.
When I left the parts manager position and became a service manager, I still had an inventory to manage. Now it wasn’t the same but similar. As a parts manager, I wanted to sell as much of the inventory off the shelf each day as possible, which was no different than when I was a service manager. It was lost forever if I did not sell the technician inventory between 8:00 am and 8:30 am – no chance of getting it back to sell some seals from 8:00 am to 8:30 am, I could always sell them later. The pressure I put on myself and my service advisors to sell every minute of every hour, every day was incredible. That pressure was NOT EVEN CLOSE to the stress I had placed on myself or my parts team to sell our inventory. So, perhaps the service inventory having no shelf life is not the same, but similar. Still, the pressure we have and the urgency I placed upon myself to sell it was not even close to the same.
As our year-end closes out, I encourage the parts and service managers to ensure that the daily inventory processes align with what drives the utilization of those inventories to the highest levels. By performing daily parts counts, inventory health is improved. If I monitored technician productivity 2-3 times a day, not a week, but a day, I could drive technician productivity up and, therefore, increase the utilization of that inventory. As a service manager, you need to look at the jobs your technicians are working on and how much time was quoted versus how much time is left to complete the repairs. Knowing what each technician is working on will only maximize your inventory health.
Reach out! We have several tools to help decide what your daily processes should or could look like to increase the health and utilization of both parts and service inventories. But you decide if your inventories are the same, similar or not even close!
Article Written By Wayne Brozek
WAYNE BROZEK is a trainer with NAEDA’s Dealer Institute. Prior to starting his own consulting business, Wayne trained dealers all over the globe on ways to improve both their parts and/or service operations.
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