In the past few years I have worked for one dealership in the Pacific Northwest. I have been very blessed to have an owner who has afforded me the opportunity to step outside my Parts Manager job description and be involve in asset purchasing (additional dealerships), complete financial statement disclosure, access to all relative prompts in Reynolds and Reynolds for accounting, safety and hazmat policies and training and orientation just to name a few. I have learn a great deal and can decipher a financial statement involving most manufacturers. I have been with my current employer since 1998 with a three year absence.
I have been a Parts Manager for several manufacturers: Volkswagen, Subaru, Chevrolet, Nissan, and Toyota.
It has been my experience that a lot of Dealer Principals may not always understand the parts business and how much it can effect the bottom line of the total dealership. Obsolescence can be a big hit to the bottom line of a dealership.
What is Obsolescence? In a nutshell, it is any part in your inventory over 12 months with no sale. You have had this part on the shelf for more than a year and no one has purchased any of them. Less than 10% of your total inventory value should be represented by these items. Thus, a $200,000 inventory should have no more that $20,000 in this group of aged items. Ideally you would have less that 5% of your total inventory value in the group and there should be a plan for disposal of these items.
Do you know the value of your obsolete items verses your total inventory dollar value? It maybe time to look at your Parts Managers end of the month report.
If you want to know more I have references available and I will gladly look at one end of the month report and tell you what I see for FREE. I will be working on a flat rate fee when I start to travel. Please feel free to leave a comment on the blog. My phone number is 253-561-3698. My email address is HaveTrailerWillTravel9@gmail.com