If You Have Auto Service Operations Training, Here's How to Implement Effective Parts Management
As long as we’re driving cars, there will always be a demand for replacement parts, and auto shops must be prepared to meet this demand as best they can. Parts management can be a tricky thing to get right, but investing the time and energy into improving this system is important for any professional in the auto service industry. With the right management system in place, auto parts can contribute significantly to the profitability of auto shops and dealerships.
If you’re entering the auto industry, here’s what you should know about auto parts management.
Those in Auto Service Programs Should Know the Basics of Effective Parts Management
A parts management system is a way of managing a shop’s inventory of auto parts and controlling the process by which they pass through the shop. For auto shops, it’s important to avoid delays within this system in order to improve customer satisfaction and drive profits. When it comes to parts management, the first thing an auto shop needs to consider is its parts policy. A parts policy outlines which vendors are the best to make deals with, and what those vendors are expected to provide. Next, auto shops will need to develop a process for ordering parts. This involves identifying which parts are needed, and ensuring that these parts are accurate and will fit the vehicle in question.
Those with auto service operations training will also need to develop an invoicing process that’s profitable. Auto parts can be an important source of revenue for auto shops, and an innovative invoicing process will ensure that shops are taking advantage of the opportunity to make a profit margin on the parts they’re using. With the right management of these steps, an auto shop’s parts control process can be both efficient and profitable.
Auto Shops Must Develop a Practical Inventory of Parts
A good inventory of parts is essential in maintaining the efficiency of a parts management system, and can increase profitability. Auto repair shops should attempt to have the necessary parts to perform most repairs in their inventory, as ordering a part only when it is needed for a specific repair can be both time consuming and costly. Inventory management can be improved by conducting daily evaluations to determine which parts are in stock, and comparing inventory with the demands an auto shop is facing. Some parts are more commonly used than others, and developing a system for determining which parts need to be kept on the shelves will save time and money.
Another important aspect of inventory management is avoiding obtaining parts that are obsolete. Auto shops should conduct regular audits of their inventory to determine which parts they are not using, and adjust their parts policy accordingly. Car parts are always changing, and it’s important to be aware of which parts are no longer in use in order to make the necessary inventory adjustments. By accurately tracking which parts are becoming obsolete, auto shops have a greater chance of making a profit on the parts they purchase.
Creating a Profitable Invoicing Process
Part of an effective parts management system is determining how to make a margin on the profits purchased in sold. In order to increase profitability, it’s important to identify which vendors are best for obtaining certain parts. Auto shops will mainly be dealing with two different kinds of parts: OEM parts and aftermarket parts. OEM parts are made by a vehicle’s manufacturer to fit a certain model, while aftermarket parts are manufactured by another company and produced at a greater volume to fit the needs of many different vehicles. Auto shops may choose to buy parts in bulk from aftermarket suppliers, saving money on parts that are used often in repairs. Some OEM parts may be stored in inventory if they’re used routinely, but auto shops may need to order these parts when the demand arises.
Determining the best vendors to buy specific parts from, and in what quantities, helps auto shops to create profitable margins for the selling of parts. Parts purchasers will be more knowledgeable about the market, increasing the likelihood of obtaining parts at a discount, and securing deals with parts vendors. A system of profitability can take time to develop, but as graduates of auto service programs may know, it’s well worth the investment.
Communication is Essential
Communication is crucial for a smooth and efficient parts management system. Technicians handle repairs and determine what parts need replacing, and therefore, communication between technicians and inventory specialists within an automotive shop is essential in developing a functioning system of parts management.
Technicians must be working closely with inventory specialists to communicate information about which parts are used frequently, which parts they’re not using as often, and which parts must be specially ordered. An efficient system of communication ensures that time isn’t wasted, and keeps each member of the process informed and able to make the necessary updates.
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