NATDA Magazine Sept/Oct 2016 - Page 72

3 TIPS TO KEEP YOUR PARTS DEPARTMENT RUNNING SMOOTHLY The parts department is one of the most complex parts of any dealership. There is the constant balance between having enough inventory on hand to meet the demands of both the service department and counter customers, but not having too much inventory that it just sits on a shelf tying up precious dollars. Establishing great processes in your parts department will help set up your dealership for success during season. 1. HAVING THE RIGHT INVENTORY ON HAND Your inventory integrity is all about having a process and a system in place to make sure that you have what you need when you need it. If a part is not where it’s supposed to be you’re wasting time, and bleeding money, just looking for it. With thousands of parts and maybe several hundred thousand dollars invested in your parts inventory, not being able to find what you need promptly means a system breakdown. Keep in mind that a well-run parts department has a well-run system. By having the right parts in the right place, your parts team won’t have to spend time sorting through a box of parts to hopefully find the one they are looking for, wasting your customer’s valuable time. The best way to make sure you can maintain the balance is by utilizing your business management software and using the information from the system to help manage the department. 2. PHASING INVENTORY IN &OUT Your “phase-in” point is the number of unique demands for a part before you consider making it a normal part of your stocking inventory. In most of the dealerships I consult with, we typically “phase-in” a part when we have received three demands for that part in a 90-day period of time. It is imperative that your parts team is documenting lost sales -- times when a part is requested but the customer leaves without the 72 part. These should always be factored into your “phase-in” point. Using your business management software, it is simple to run a report evaluating the demands and make a decision based upon the information. The “Phase-out” point is when your parts department will discontinue keeping a part in the stocking inventory because of the lack of demand. In most cases, when a part demand becomes less than three for a 12-month rolling period you would remove the part as a normal item in your inventory. 3. MAINTAINING RESTOCKING LEVELS Most business management systems are able to alert you when a part falls below a certain level of inventory. I can’t tell you how important it is to use this feature! As an example, if a mower blade is a bestseller the alert can be set to a minimum inventory of six blades and a maximum setting at eighteen blades. Once the level reaches six, your software will automatically let you know that it’s time to reorder so they don’t go out of stock. Making sure you have the right inventory and maintaining it at the correct levels will go a long way in reducing the number of both special and emergency orders you have to process on a daily basis. 800-480-0737 • NATDA Magazine