Taking Stock of your Car Parts Inventory18 Feb, 2001 By: Ronelle Ingram imageSource
Taking Stock of your Car Parts Inventory
CAR STOCK INVENTORY these three words bring fear to the hearts and minds of field techs, service managers and owners. The annoying problem of the car inventory is always hovering in the background of all conscientious service professionals. Periodically, the car inventory issue raises its ugly head.
There is a fiscal need to find out exactly what dollar of parts and supplies are actually being carried by field techs. Hours or days of seemingly non-productive labor hours must be spent counting and verifying each field tech’s car stock inventory. No matter what type of company you run, the inventory issue can make or break the profitability of your business.
The inventory that rides around in the back of your tech’s vehicle is truly a ticking time bomb. How much is enough? What does each tech need to carry? How does heat and cold affect their inventory’s condition? How is it organized? Who is responsible for lost or broken items? How is it restocked? How and when can the tech return unwanted items? Does the tech keep their inventory when they go on vacation or to out of state training? Are manuals, parts lists and bulletins kept as part of the car stock? The list of inventory related questions go on and on.
Keep It On Record
It is vitally important that each tech has a computer generated (or written) parts and supply inventory list that is updated on a regular basis. Each service meeting is a convenient time. It is relatively easy to do rotational inventory. This requires that different sections of the inventory be checked on an ongoing basis. By doing a little bit all the time, the need for an enormous amount of time being necessary all at once is eliminated.
There is time during the regular workweek that can be designated for actually updating car stock inventory. The little bits of time left over time at the end of the workday can be specifically assigned as inventory upkeep time.
When the field tech calls in at 4:15 p.m. clearing his call, both of you realize there is not adequate time to travel to and complete another call. Rather than sending him home, assign the tech to update his car stock inventory until 5:00 p.m. It is perfectly all right if the tech disregards my request. I expect the tech to try to get a jump on the evening commute and start the evening drive home. It is perfectly OK.
The tech has just been allotted 45 minutes of company paid time to work on his inventory. It is my responsibility to keep an accurate record of the time that has been allotted for updating his car stock inventory. I use a 3 X 5 index card for each tech. I note the time off (4:15) and the date.
By keeping track of this previously thrown away time, by the end of the month, you will have given the tech eight full hours of time allotted to organizing and tabulating their car stock. When the time comes for a perfect inventory to be turned in, the company is not responsible for allotting any more time. The tech may have to work all day Saturday to get his car stock straightened out. You owe them nothing more. You have already provided the needed time during their regular working hours to finish the task.
Inventorying Saves Money
A fiscal miracle usually happens after techs update their car stock inventory. When techs count and record the parts they are carrying, they usually decide they don’t need about 25% of the parts they are issued. Car stock inventory will decrease in direct ratio to the frequency it is monitored. The more often a tech is required to count their inventory, the fewer parts they will carry.
I allow each tech to establish his or her own car stock inventory. There are many variables that go into establishing an appropriate level of parts and supplies that are carried. How far away is their working territory? How many models of equipment are being serviced? What level of technical expertise does each car stock have to support? What size vehicle does the tech drive? What effects will heat or cold have on the carried supplies and parts? Is the tech neat and organized or messy and unorganized? Does your service depart have a location for parts drop, parts driver or arrange for UPS home delivery of needed parts? Is there a problem with excessive breakage or theft? These are a few of the variables that must be considered when establishing the level of parts to be carried.
Wasted Time =Wasted Money
Some dealerships minimize the cost and hassle of maintaining car stocks by having their techs come into the office each morning to pick up needed parts. I firmly believe that NO car stock inventory is extremely expensive, much more expensive than even a $10,000 car stock.
Calculate the cost of wasted time each morning for the tech to come into the office, have a cup of coffee, share a few friendly words with other office staff, have an additional conversation with other techs in the parking lot before leaving to drive to their first call. Using conservative numbers of a half-hour wasted each time the tech comes into the office, and an additional half-hour to drive to the first call of the morning. Using realistic numbers of one-hour daily of non-productive time and these daily trips to the office cost over $14,500 per tech, per year. (5 hours times 45 weeks, [allowing for training, vacations, and holidays] times $65.00 [cost of the labor hour of a tech making $15.00 per hour] equals more than $14,500 per tech.) Wasted labor hours can never be recouped. Unused parts, in a car stock inventory, continue to maintain its value.
Updated Inventory For Cost Effectiveness
A continually updated inventory is vital to effectively completing service calls. Most computerized dispatch software programs have a built-in inventory system. It is much more effective to look into your computer files to see which tech currently has a needed part, than to randomly send the next available tech who may or may not have the part.
As natural attrition occurs, the machine population will shift from older analog equipment to newer digital models. It is imperative to reevaluate the levels of part purchases and the type of parts that are carried in the warehouse and car stock inventory.
An accurate inventory allows the tech that has diagnosed a specific problem that requires part immediate information on that part being in their car stock. They can quickly check their updated car stock inventory (which is conveniently stored in their tool case). This eliminates the time consuming and frustrating search of their vehicle to try to find the needed part. This type of efficiency enhances the level of service that can be delivered to your customers. It will greatly shorten the turn around time required on calls waiting for parts installations. It will increase your customer’s level of satisfaction.
One of the greatest ongoing costs to all dealerships is the inventory of parts that are necessary to deal with the daily servicing of equipment. Depending on the size of your operation, hundreds, thousands or even millions of dollars are invested in an attempt to have the correct part in the right place in a timely manner. This simple concept has been the nemesis of thousands of service managers. The delicate balancing of time, monetary resources, storage and the availability of needed parts will be simplified by carefully monitoring car stock inventory.