Written By: Christy Rickard, Implementation and Training, on Oct 10, 2018
Inventory control is crucial to any warehouse, retailer, or maintenance shop. It is important to carefully streamline your inventory because too much or too little can affect your bottom line. The amount of inventory purchased should be your usage. Here are a few tips on how to achieve a healthy inventory turn rate:
You can accomplish this by running regular (and accurate) physical inventory counts. If your inventory is up-to-date, you can better understand your parts on-hand. Plus, real-time insight into your inventory helps you to make purchasing decisions that are proactive rather than reactive.
Set up reports that validate that you are purchasing the correct inventory in the correct quantity, so you stock what is needed and nothing more or less. There are a few metrics you can begin monitoring to ensure you are accomplishing this:
Work with suppliers to reduce delivery times so items can be purchased more frequently as needed. By reducing delivery times, you can order in smaller quantities on a more frequent basis. For example, if the supplier offers same-day delivery, you can order in the morning for work to be done in the afternoon. When placing the order, make sure you have a better idea of what inventory you need to order. If it takes the supplier a week to deliver an order, you may need to order in larger quantities and may want to order more since you may not know today what you will need in three days.
If you do run low on stock (i.e., you fall below your min/max level), contact your preferred supplier. Depending on your relationship, it may be possible to negotiate a more urgent replenishment with the salesperson at the front line at the dealership.
You can read more about this in our article, How to Save Money by Reducing Slow Moving Parts. You’ll need to start with analytics to identify slow-moving inventory on time (i.e., not after years of non-use).
These tools can help you identify proper reorder points and forecast inventory demand, helping you to predict what to order and when to order it: