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Steve Hall

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Does Your DMS Match Your Actual Parts Counts?

Fotolia_36189691_XSHave you ever had this happen?  … A service advisor contacts your parts department to see if you have a specific part in stock. You check the computer system and it shows that you have it. A price is given, “Yes, we have it in stock” is told to the advisor.

The advisor proceeds to sell the job to the customer; the information is relayed to the technician who then comes to the parts counter to get the part. Your counter person goes to pick the part from the shelf, only to find the spot on the shelf is empty!

What happens now? You either have to pick the part up from another dealership, possibly hold the vehicle over while the part is ordered, or have the customer return at a later date. None of which are good end-results.

What caused this to happen and what can be done about it? If you believe that you “can’t sell what you can’t find” then you need to have systems in place to make sure that you can “find it.” Let’s look at a few basic rules for a parts department:

  1. Every part must have a “home.” A bin location must be assigned to every part that you have in stock. Even if you are cramped for space, you must designate a space for every part in your system that has an on hand quantity. This includes special ordered parts.
  2. Each bin or location should have a designated number for identification. Does the numbering system make sense? Can a new counterperson or stocker locate the appropriate bin quickly and efficiently?
  3. Each bin should be arranged in alpha numeric order. Shelves should have parts tags for each part that is stocked in it. This makes for easier, faster and more accurate stock replenishment.
  4. If space allows, leave the top and bottom shelves empty. This will allow space for growth within specific bins. You will need this as you add additional part numbers into your stock.
  5. Perform I-bin counts. Individual bin or “I-bin” counts should be a daily discipline within your department.

Items one through four are pretty basic, but I would like to expand more on item five. Parts managers should be aware of this term, whether they apply it or not. General managers or owners may not have been exposed to it, so let me explain how and why to perform these counts.

I-bin counts are used to check the accuracy of your DMS parts system vs. the actual on-hand quantity.  Ideally, they should be set up the following way:

First, make a spreadsheet listing each of your parts bins number. Have additional columns for the date the bin was counted and a column for who counted it. You should have one more column noting that there were, or were not, discrepancies found and adjustments to on-hand quantities.

Each day, the parts manager should print off and have on hand quantity or inventory sheet for the bins that need to be counted. Ideally, you should count enough bins so that you “look” at your complete inventory every 30-45 days. In most parts departments, this only a few bins a day.

Once the sheets are printed, the count should happen quickly. The reason for this is, if any parts are pulled after the sheets are printed you will show a discrepancy and have to research it before any potential adjustments are made. Normally it only takes a few minutes to count a bin, with the obvious exclusions of high-density drawers. In those cases, you may want to count a couple of drawers a day to break it into bite-size chunks.

After the count is completed, if you find any discrepancies, research them appropriately and if the count truly is wrong, make the adjustment in your system. At times you will have positive adjustments as well as negative adjustments. After you are finished with the bin, including the necessary research and adjustments, you should retain the count sheets for future reference.

On a side note, it is a good idea to have different people do counts periodically. Though we don’t like to think that any theft would happen within our store, it can happen. Having a variety of people doing bin counts will make it harder to cover up. As a general manager, be willing to go back and perform some counts yourself; it can be an eye-opening experience.

By doing the perpetual count and check, you will get to see how accurate your DMS and actual on-hand inventory really are. You might just find that the “missing” part in our example above was just stocked in the wrong location!

If you are interested in continued training for your parts manager, be sure and check out the upcoming NCM Institute Principles of Parts Management I and II courses that are launching this fall.

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About the author

Steve Hall

Steve Hall

Steve Hall is a full-time instructor for the NCM Institute and is responsible for the development of its Fixed Operations training curriculum, with an emphasis in express service management, collision management and parts and accessory management. For more than 25 years, Steve’s experiences have encompassed almost every aspect of the retail automotive service, parts and body shop business. He was an equity partner in two dealerships and has held management positions in all areas of auto dealership Fixed Operations, including Service and Parts Director and Vice President of Fixed Operations over 19 stores.

Permanent link to this article: http://blog.ncm20.com/2013/06/does-your-dms-match-your-actual-parts-counts/

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