The Parts Department, despite being a highly profitable area, is not fully exploited by many dealers. Part I of this article presented solutions to obtain maximum benefits in this department through improved interactions with customers. This article will analyze ways to make the Parts Department more profitable through improvements in inventory management.
More efficient parts purchases
One of the main causes of lost sales is the lack of inventory. In many cases, the dealer’s warehouses have high levels of parts inventory but still can’t satisfy customer orders. This brings about two problems: more lost sales and a parts inventor that generates expenses and becomes obsolete.
The key is to have a parts inventory adjusted to what customers need
You can achieve this by analyzing key information and automated statistics of all customer sales and of your inventory composition. This will help the dealer makes parts purchases foreseeing the customer needs: the dealer easily knows which parts to order, and which parts are dead or have low activity and should be quickly sold.
Key #1: Autologica DMS has an “Order Suggestion” feature that analyzes all parts transactions. With this analysis, the Parts Manager will know what parts to purchase in order to have an inventory in accordance with their customers’ needs, and avoiding lost sales as well as obsolete parts and emergency purchases.
Better inventory control
Parts classification according to sales activity allows dealers to group parts based on the all transactions over the past months. This information is essential for the Parts Manager, since it allows them to:
- Know which parts are dead, so as to offer them with a discount.
- Plan promotions to sell parts that have low turnover.
- Detect parts that have low activity in one store, but may have high activity in another.
If you don’t have automatic reports of this type, you face the risk of filling your warehouse with parts that have low or medium activity, generating unnecessary expenses and a gradual decrease in value.
Key #2: The Parts Activity report provided by Autologica DMS allows you to know the status of each part. In addition, Autologica provides a report that suggests which dead or immobilized parts should be sent to a different warehouse where it will have a higher possibility of being sold.
These are some practices that help the Parts Department become more profitable by having ideal inventory levels adapted to customer demand.