Minimizing Idle Stock and Best Practices
If you're facing challenges with idle stock accumulating on your shelves, there's a tailored strategy to mitigate the growth of idle and obsolete inventory, especially pertinent to General Motors Non RIM guaranteed inventory, though adaptable for others as well.
Start by inspecting your daily parts orders. Pay particular attention to high-value items ordered for warranty purposes and closely inspect orders placed by technicians, especially those involving multiple parts. Additionally, make it a habit to review large wholesale orders regularly. Utilize the Open SOR Report by Advisor to plan for customers' returns for repairs, which is provided daily. Moreover, consider engaging your Business Development Center (BDC) to actively schedule return repairs with customers, ensuring a more streamlined follow-up process.
A critical step in managing your inventory is ensuring that all Customer Pay Parts on Counter Tickets and Repair Orders are prepaid. Incorporate a weekly routine of running the RPD (Report Prepaid Parts) to monitor these transactions. Also, it's essential to meticulously review any high-value returns from customers or technicians that are not protected under "RIM" to assess their eligibility for return under CSO-Code 11.
Monthly return routines play a vital role as well. This involves ensuring the return of RIM guaranteed items, organizing and sending back CSO accrual returns, and managing the build-up and purge of monthly accrual parts. Prior to purging, submit obsolete parts to Parts Brokers for a more efficient inventory clearance.
Determining the "Purge Value" needed each month is also crucial. This requires analyzing the average monthly value of technical obsolescence and the average monthly CSO accrual earned. Such analysis aids in calculating the necessary accrual to either reduce or maintain the obsolete inventory value at a manageable level.
Lastly, it's important to manage wholesale customer returns effectively. This involves reviewing accounts with high return percentages and identifying customers who may be taking advantage of return policies. By delving into PDA in CDK, under Monthly Reports and Report #7, you can access a credit ranking report that helps in this assessment. For those found to have return percentages exceeding 10%, consider reducing their discounts or imposing a restocking fee as deterrents.
Combining all these strategies and maintaining a consistent routine of daily reviews and monthly returns will significantly help in identifying and rectifying the root causes of idle inventory accumulation. This proactive approach is key to minimizing the expansion of obsolete parts and enhancing inventory management.
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