Running the Parts Department means controlling and managing diverse processes, people and tasks. The dealers that best manage their parts area the ones that continuously measure, correct, and improve.
We’ve found that many dealers that don’t follow these maxims and don’t work with a DMS that has features specially designed for the Parts Department have a higher ratio of dead parts inventory that can reach 20% to 35%. They also lose more parts sales due to disorganized warehouses and often resort to emergency purchases from their suppliers which are costly and sometimes totally unnecessary.
“Controlling and improving these practices allows you to reduce immobilized capital (which can be reinvested in other areas), increase sales (result of a policy for promoting parts with low turnover), and reduce delays when fulfilling parts requested by customers.”
How to clean up your parts inventory and reduce emergency purchases
Strategic purchases
The main cause of immobilized inventory is a purchasing process based on intuition instead of statistical information. A strategic purchasing process takes into account data such as sales rankings, demand volume, part popularity, and seasonality.
Autologica DMS has an order suggestion feature that, based on existing information (store inventory, latest transactions, pending orders, etc.), calculates and suggests the order you should place. This will allow you to have an ideal inventory to satisfy customer demand. At the same time, you will avoid unnecessary purchases that can increase your immobilized inventory.
Improved pending orders management
When ordering parts from suppliers, it can be difficult to determine who placed the order with the dealer if it is not properly registered. Inventory-bound orders or customer requests should be differentiated so as to avoid delays in fulfilling customer orders.
In order to solve this issue, your DMS must have two controls: it must tell the dealer what customer ordered the parts that have just arrived, and it must detect if there are old pending orders.
“A DMS with specific features and strategic reports for the parts department provide the Parts Manager with essential tools to make the right decisions that will lead to an ideal parts inventory, avoid lost sales, improve customer satisfaction, and obtain maximum profitability.”
