Your Automotive Dealership Should Conduct a Mid-Year Inventory Review
An important Automotive Dealership task for any department managing automotive parts is conducting annual inventories. These records ensure your inventory has been accurately recorded at both the end of each year and during tax filing season.
Regular inventory takes can assist your management, identify problem areas and uncover ways to boost efficiency. Here are four reasons why taking a mid-year inventory is beneficial for any organization.
#1 – Cost Savings
A mid-year inventory count can identify problems in your inventory management system that could reduce shrinkage. It also highlights patterns which might be hard to spot after one year of transactions. With this data, you can forecast trends and boost turnover – thus reducing obsolescence and overordering.
While conducting multiple inventory counts annually can improve your records’ accuracy, there is no need to count parts again at the end. Doing so can result in additional savings for you.
Auto dealers typically count their inventory at the end of a fiscal year, making inventory management companies an especially sought-after service. Inventory management firms will often provide discounts and extra time during mid-year between fiscal years.
#2 – Increase Profitability
No matter the season, a physical count will help boost profitability. Making sure all parts are accurately accounted for, assigned values accurately and the parts department working efficiently and effectively will increase both employer productivity and that of your business. Ensuring that both counts match up accurately can boost both employee morale as well as the productivity of everyone within the organization.
#3 – Enhancing customer service
Customers often experience frustration when their vehicle repairs are delayed. You may have encountered a situation in which your customer’s car wasn’t fixed by an agreed upon date.
Due to an error of judgment, you believed all parts were in stock but later discovered one was missing. This could have been lost, misplaced or used for another job. Being able to resolve these issues will give customers confidence and remove any worries about physical inventory from your mind.
#4 – Dispose of parts before they become obsolete
By reviewing your inventory and records periodically throughout the year, you can identify trends in sales that could indicate obsolescence. Doing so gives you an opportunity to sell parts before there is demand.
This could involve increasing sales through marketing and promotion, reopening other shops or service centers and reaching out to them to determine if additional supply is needed.
Additional Resource:
https://www.oreillyauto.com/
https://www.denso.com/global/en/business/products-and-services/mobility/parts-accessories/
https://fred.stlouisfed.org/series/PCU44134413
