Time for a Tune Up: Upgrading Your Auto Parts Inventory Management Process
Is parts inventory management a hassle for your shop? Are you having trouble growing your parts margin? Make it easy and grow your margins with the right methods and tools.
Is parts inventory management a hassle for your shop? Are you having trouble growing your parts margin? Make it easy and grow your margins with the right methods and tools.
It can be easy to get overwhelmed while trying to keep up with all the parts your shop needs without the right parts management system, especially in an industry as fast paced as ours.
Inventory can include items like oil, tools, and large equipment. It also includes stock items, or parts which are sold to the customer during the course of repairs, such as gaskets and timing belts. Inventory management and parts management go hand in hand, but outside of labor profits, the profit a shop brings in ultimately comes from parts markup at the point of sale. Consequently, there’s very little room for error in managing parts.
Simply put, mismanaged parts means money left on the table and unhappy customers—a combination no shop owner or automotive team wants to experience.
A functional auto parts inventory management system is essential to growing your profit margins while maintaining fruitful customer relationships. A good parts inventory management system should let you know what parts you have in stock and how many you have; track what sells and what sits on the shelf longer than it should; and help you plan for growth. With the right parts inventory management system, your shop can go from disorganized to a well-oiled machine generating more and more profit.
Auto parts inventory management can be conducted in one of several ways, ranging from pen and paper to advanced software. What matters most is finding a system that works for you and keeps up with your needs.
Many shops still use handwritten records. The pen and paper method is preferred by some shops because it requires very little training and can be completed offline. Pen and paper records may seem inexpensive at first, but costs add up quickly if you factor in the extra time needed to keep the records in order. But the disadvantages of such ephemeral record keeping are becoming increasingly difficult to ignore in an era where computers offer a path to a paper-free workplace.
Paper records are easily destroyed, lost, and damaged, and creating copies is a time consuming task in and of itself. Think about the last time you saw a card catalog in your local library. How long ago was it? Probably at least twenty years ago. And there’s a good reason. Even one misplaced card could make finding a book impossible for weeks or even months. Enough lost, damaged, or disordered cards could cause a ripple effect leaving the system next-to-useless for patrons.
Now think of your shop shelves as comprising a library of their own. Think of the headlamps, the windshield wipers, the compressors, and all the other parts as items within that library and how much they shuffle around as they are sold on jobs and replenished by your parts ordering team. Wouldn’t it be easier to track such items with a database?
Spreadsheets are essentially very simplistic databases, and understandably, plenty of shops have been using spreadsheets for decades. Programs like Excel are a clear upgrade from a humble, physically maintained records system. And with the advent of laptops, spreadsheets make it easy to set up a workstation anywhere in the shop and start typing out what you need. But ultimately, spreadsheets aren’t built with auto parts inventory management in mind or with auto workers in mind. It can be difficult to set up your own spreadsheet system, too, and there’s always the risk of human error or simply losing spreadsheets stored on a personal computer.
Even worse, spreadsheets can take considerable time and training to truly master. To the untrained eye, spreadsheets can just look like a bunch of arbitrary numbers, and it can be tough to find the information you need. If you have a service advisor who needs to know if something is in stock at a moment’s notice, are you confident they will be able to navigate a 500+ item sheet to find one part in a timely fashion?
Shop management software can be automated and comes with pre-created templates and tables ready for the user to fill in. With auto parts inventory management software, shop writers don’t have to invent their own templates as they would with a spreadsheet records system, and the software does much of the record keeping for them. Shop management systems like Tekmetric have portals specifically dedicated to parts inventory management.
If your old parts management system has your shop stuttering like a rusted out pickup running on empty, systems like Tekmetric may be the perfect solution to get your team on track. Our system includes an intuitive auto parts inventory management system built for teams just like yours. It’s cloud based so you can access it anywhere in the world, from any computer with an internet connection.
Aside from any number of other project management tasks, our shop management management software lets you put together and track your parts orders, store information about vendors, monitor parts sales performance over time, and even put together and save special parts lists for jobs your shop completes on a regular basis.
Auto parts inventory management is all about setting the right pace when tracking your inventory. Your auto parts inventory management system should match the operational pace of your shop, and the system shouldn’t be so complex or time consuming that it takes time away from hours better spent repairing cars.
Maybe your team conducts a yearly deep dive into its inventory but only supplements this with brief monthly bookkeeping reviews and weekly maintenance checks. Or maybe your shop moves enough stock that staying on top of auto parts inventory management requires fastidious, day-to-day monitoring. In the former scenario, it is easy for stock problems to creep up on shop owners without anyone noticing for some time. For shops carrying more parts and conducting more frequent monitoring, the greatest challenge may be sorting a massive volume of parts.
Whether you run a shop that sells a lot of stock parts or makes more profit on labor, the one consistent way to gain control over the pace of parts inventory management is to use a program like Tekmetric. A shop management software worth its salt centralizes information about what you have on your shelves and lets you update records fast.
So what are some indicators that your auto parts inventory management could use a tune up? And when should you start looking into shop management systems like Tekmetric? Here are some indicators to look out for:
It is easy to overestimate the demand for a specific part, especially if you are ordering parts between seasons, ordering specialty parts, or still using pen and paper or a spreadsheet to calculate your inventory. Whatever the cause, it is important to remember that every part has a carrying cost. You can think of “carrying cost” as the storage cost for a part. Every part that sits on a shelf and occupies space that better selling products could take up costs your business money.
If you’re constantly running out of supplies, your auto parts inventory management system is failing. Good parts management requires staying ahead of the curve to anticipate the needs of your shop. If you are always running out of parts and having to order them before you can complete a job, jobs will take longer, you may wind up paying extra for parts, and you may lose your customers’ trust.
If inventory management has become a dreaded task at your shop simply because it takes so long to complete, it is time to upgrade your methods. Inventory management must be a smooth process if you want the rest of your shop to operate smoothly. If regular check ups on your auto parts inventory are taking too long, it is probably a sign of a larger underlying problem—disorganization.
Most of us in the industry have had a moment where we’ve gone to look for a part and couldn’t find it. But when losing parts becomes a regular occurrence, it’s time to ask yourself what’s going on.
Clean, accurate, centralized auto parts inventory management records are pivotal to day-to-day functionality for your shop. Inaccuracy costs money. Without a clear view of what you have in stock at any given point, it becomes difficult to keep margins in check.
Imagine that one of your best customers just brought in their family’s SUV for new brake pads. You check your system, see that it says you have the right brake pads in stock, quote a price to the customer, and give them an estimate for when they can come back to pick up their SUV. One of your technicians goes to the back of the shop to pick up the parts theyy need for the job and can’t find them. In fact, no one can find them even though they are listed in your inventory. Worse still, when you go to order the parts, the price is more than what you quoted the customer and the part won’t arrive until tomorrow. Now your job will be delayed and you’ll lose money on the part. You could potentially even lose credibility with the customer.
Aside from keeping guests happy and sustaining your parts margin, accuracy can also help you be strategic with your business. Keeping meticulous track of what you buy, store, and sell at your shop makes it easier to spot trends over time, predict when you will need to buy particular parts, and gives you an idea of how much to invest in new parts at a given time. Accuracy makes success and growth possible.
So what approach should you take to ensure that your auto parts inventory management system is accurate?
For starters, you’ll need one place for everything. You shouldn’t have to look through every single shelf just for one part, right? In the same way, you shouldn’t have to look all over the shop for your records. Centralizing your auto parts inventory management allows you to manage an otherwise unwieldy task. Centralized records also help eliminate redundancy and the chances of a double-purchase.
Building on this idea of a centralized location for your inventory records, a system like Tekmetric can help you build a one-stop-shop for information about auto parts. With the Tekmetric shop management system, your team will have access to dedicated parts management tools and inventory management technology that will put your shop on the fast track to growing your GP$.
Everyone has that secret to success that got them where they are today, but building on that success with continuous growth may sometimes seem impossible. Most shops reach a parts margins plateau at some point and struggle to reach higher sales goals. Fortunately, when you need an extra fuel injection to get back on track, we’ve got your back with our own tricks and tips.
As you reshape your parts inventory management plan with Tekmetric, we encourage you to try out a few of our favorite success strategies:
Jot down data about OEM sales programs in the notes section of each card and update these regularly. You can sort by vendor on the Inventory Board, and then click through parts you are monitoring to the vendor card itself.
You can break through profit plateaus by monitoring trends, whether by season, price points, or vendor.
According to IHL Services, Amazon pulls in over a fifth of the company’s North American retail revenue simply because brick and mortar stores cannot keep the shelves stocked ahead of demand as accurately as their online rivals. Even though you may not be in direct competition with online retailers, you can still learn a thing or two from Amazon about staying ahead of other stores. Let’s say you notice A/C components are selling better in the summer. It makes more sense to rev up your stock in late spring in preparation and then run specials at the end of summer to clear out any leftover stock.
Don’t just let items sit on the shelves if they aren’t selling. Most OEMs have a return policy, and in some cases it may be best to simply collect a refund so you can clear space and put money back into parts that are in demand. You should know the return deadlines and expiration dates of everything you have in stock, and tracking these will help you take action when a deadline for returns or expiration approaches.
Tekmetric is a powerful tracking and planning tool. As you work to rethink the way you conduct auto parts inventory management, Tekmetric will help you every step of the way. And the more information you add to your shop management system, the better results you will see. Tekmetric can help you with other aspects of inventory management as well, such as tracking tools, equipment, and oil.
Think about the most frequent job orders your shop completes on a daily or weekly basis: fluid flushes, alignments, tire replacements, air filter replacements, and more. It can be difficult to keep everything you need for these jobs in stock with such frequent rotation of parts.
Assembling a new parts order list from memory each time you need one can be especially tedious, too. But let’s face it, while the basic jobs of an automotive repair shop may not be the most glamorous, they’re the bread and butter of most shops and are what keeps the lights on. Those basic jobs are also what your customers rely on the most to keep their cars getting from point A to point B. A good reputation in the industry is built often on tire rotations, battery drops, transmission repairs, and A/C repairs.
Putting together parts orders and tracking individual parts for less frequent jobs comes with its own challenges. Let’s say you have to reassemble an engine on a type of exotic car you haven’t worked on in several months or even a year. Now, suddenly, your team has to put together a parts list for the job in a rush against the clock. You will need to remember where you purchased the parts last time, how much you spent, and how to get in touch with your vendors.
But what if you could put together lists for each job your shop completes as a kind of library of work so that when the job arises again, you can see exactly what you need to buy, where to buy it, and how much you’re looking at spending to get the job finished?
With Tekmetric’s Canned Jobs Board, you can do exactly that. The Canned Jobs Board pulls from inventory to see what parts you already have on hand and what parts you may need to purchase. You can also set a parts markup on inventory items that are added to canned jobs to lock in your parts margin on those parts. This addition to your parts management strategy will cut out all the guesswork and streamline jobs. Stop spending more time sorting through parts to figure out what you need for the job than you spend actually repairing the vehicle.
In Tekmetric, you can view and sort canned jobs by:
Just as with the Inventory Board, our Canned Jobs Board also lets you click through to individual job cards, search for specific jobs, apply filters, add and delete canned jobs, and download your canned jobs list to use offline, in presentations, or in print.
Make the Switch: Upgrade to Tekmetric
You can’t run a shop without the right parts and tools, and in today’s automotive industry, Tekmetric is one of the best shop management tools at your disposal. If you want a shop management system that grows with your team, we’re here for you. Our crack team of coders and engineers are always innovating to bring you new features and integrations to make your life easier.
Whether you need to track down a stray steering column or make a decision about how much to invest in A/C repair parts for the summer, Tekmetric is your go-to system for gaining a better understanding of how parts move through your shop.
Beyond a substantial selection of inventory tools, Tekmetric also offers users access to key performance indicators, including Close Ratio, Average Repair Orders, Car Count, Gross Profit Percent, Profit Margins, Labor Hours, and Mechanic Labor Efficiency.
Want to improve customer trust? Our one-of-a-kind software also lets you manage customer trust and relationships. Set up customer profiles and history, send emails and text messages directly from your account, send estimates to customers for approval, and collect mobile payments all from your Tekmetric account.
Get ready to energize your team. Tekmetric lets you overhaul the way your team manages task division with labor guides, scheduling calendars, and a variety of communications tools. Now your service advisors, shop owners, mechanics, and shop foreman can all communicate in real time wherever they are in the shop.
Need to work from home or on the road? Want to check in just to make sure the shop is doing well while you’re on vacation? Log in from anywhere to see the latest updates and get in touch with your team.
You can access and use Tekmetric on most internet connected digital devices as well. Whether you’re connecting by computer, tablet, or your phone, enjoy easy access to your digital office from anywhere. Hop on to Tekmetric from your home’s WiFi, your cellular hotspot, or any other connection.
Need help with any aspect of the Tekmetric program? Our experienced service team is here to walk you through any problems and help you make the most of your user experience.
Help your team take control of parts management around the shop with a powerful cloud-based software that improves team communication and tracking. Plan ahead, strategize, save time, and streamline processes for your team. Never again feel left in the dark about the parts you need or have in stock. Continuously grow your part margins and achieve more with Tekmetric.