Create a better inventory system for automotive parts

By DavidPage

Create a better inventory system for automotive parts

The new year is a automotive parts great time to review the year before and to start over to optimize your business. Everyone is eager to see 2020 as a year of disruption and upheaval.

It’s crucial to maximize revenue and minimize costs in times of slowdowns or shut downs. Dealerships can achieve this by better managing their inventory.

The scenario is well-known

You try to grab a part for work orders and it’s not there. It’s not there. You look through the bins and between the shelves.

Perhaps you didn’t get the correct amount for your previous order. Maybe the part was not recorded on a previous order. There are many reasons parts can go missing. However, the bottom line isn’t just the cost of missing inventory but also the time it takes to find the part and any potential customer service issues.

Effective inventory management practices are essential to maximize profit and avoid your team spending time trying to figure out why.

These are five to get you started.


Your inventory should be divided into groups according to frequency and cost. A minimum of three groups is required. The first group will contain items that you use often and have more of. These inventory items are usually less expensive. This second group includes items that are essential to your parts department, but have a higher cost and/or slower turnover. The last group will contain items that fall between these two groups, those with a low turnover and moderate cost.


Do not skimp on data. Although it may seem time-consuming to enter all fields for every product you have in stock, taking the time to do so will help you save time and effort over the long term. Include the following:


  • Information about barcodes
  • Supplier
  • Lots of numbers
  • Country of origin
  • Cost


To reconcile your inventory records with your physical inventory, you should do an annual count. Weekly and monthly inventories should be done for items that move fast or have frequent errors at the end of the year. This will allow you to identify parts that have not been recorded or missing inventory, and help you source any discrepancies as soon as possible.

Internal theft can be deterred by regular oversight.


Everybody has had to deal with a supplier who underperforms. Deliveries are late, orders are incorrect or you are constantly being asked to fix problems with your monthly payments and bills. You don’t need to deal with this. Don’t waste your time trying to find bad vendors. Instead, talk with them and/or find a better one. Find a backup you can use in an emergency.


You should have a consistent process for each touchpoint of your inventory process. Consider receiving, counter-sales, returns, and requests from the service department. Also, ensure that your team follows these processes. Problems can arise even if there are minor differences between staff members.

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